Continous hedging as a rachet device to lock-in profits

I am confident that you will figure this out.

 

My latest research results with selling Call options with basic dynamic delta hedging:
1) One makes a profit only if Sx < S0. Sx=S0 means break-even.
2) The profit is even linear: the maximum is at Sx <= K; then it is the full credit.
3) If Sx > S0 then one makes a loss.
4) Volatility changes seem to have zero effect on the result.

(S0=initial spot, Sx=spot at expiration, K=strike)

Hmm. aren't some spread options not better, and much easier, than the above delta hedging construct?

 

Hedging is not really a necessary tool in trading. Rather, it is useful in short term and longer term trading.

 

Here's how to lock in profits---------Close the position