Continous hedging as a rachet device to lock-in profits

That I can't believe! Because there are also many other options sellers who as well do hedging, but who are not any MMs...

 

It won't be any "truer" if you repeat it endlessly...

 

I used to be market maker, I have know tons of market makers, how many market makers do you know ... yes there were the ones that didn't hedge properly ... they almost all blew up ...

 

Hey cvds16, FYI: nobody questions that MMs are hedging (or trying to ), but it is not only them who hedge...

 

if you want to trade vol you got to hedge of course ... but that's a game way above your level

 

I think in the above paper also Gamma hedging was explained... I'll take another look at it...

 

Never underestimate botpro! botpro can master them all, it's not rocket science, man! At least not for botpro...
Btw, have I told you already? Rocket science is not very complicated...

 

Ok, here is some more info about Gamma, this time from the said other paper:
http://faculty.baruch.cuny.edu/lwu/9797/EMSFLec5BSmodel.pdf
"
Gamma is high for near-the-money options.
High gamma implies high variation in delta, and hence more frequent rebalancing
to maintain low delta exposure.
"
Ok, everything that helps to reduce the number of rebalancings is of course good...

 

look up gamma-scalping on google ... that might make you somewhat wizer ... gamma-hedging is not a term I am familiar with ... unless you mean that market makers want a balanced portfolio of their Greeks ...

 

That's very simplistic thinking in this context ...