Amico, I think you've missed the point of this article... I don't need to read it fully to appreciate your unfortunate misunderstanding. The article discusses a setting where a bank (i.e. a market-maker) collects a premium for selling an option. This premium explicitly includes bid/offer and the purpose of dynamic hedging described is to retain as much of this bid/offer as possible with as little risk as possible. Now lemme ask you, are you a bank? Are you in a position to charge the mkt bid/offer? If not, everything that other posters have previously told you applies. You cannot be short gamma and make money by hedging, especially if you incur transaction costs.
When studying hedging literature, then one might wonder why they prefer PnL=0 ;-) That is excluding the credit one already gets upfront when selling options. Ie. the profit is the credit, and the goal of hedging is not to make any loss, because otherwise that would mean a portion loss from the credit... Hedging normally means buying on everage about half of the stock. Ie. it binds much capital. I just wonder whether one can also hedge with additional options only, instead of buying the stock.
you obviously don't have a clue whatsoever what you are talking about ... read up on option models and how they work ... you seem to act like you have invented one of your own ... hedging in options is mainly for option market makers or for volatility traders ... doubt you are either one of them ...
Just think I am a market maker, a bank, or an equivalent professional, or even retail, trader... Then your statement don't apply... That simple is it... Proof: do you think say a non-financial company XYZ is a market maker or a bank, when it needs to sell options? No, it is not. Ergo: that company will use hedging as well!... So, your argumentation that hedging can be used only by market makers is pure nonsense!... Q.E.D.
botpro you clearly have no clue what you are talking about when it comes to options ... I rest my case ...