yeah......i wish i could be david copperfield and to scalp gamma,when mu position SLOWLY DECAYS.......i would be the richest man in the world...... spind,when you get more "familiar" with options,you will realize the relationship between gamma and theta...... i will try to explain it to u in a manner,that i hope you will understand it: gamma and theta are like red and black in las vegas......if u bet on one,and it show the other.......u lose.... ofcourse,there are ways in option world,where u can build a position,where u might structure to some level positive gamma and positive theta,into a delta neutral position.....but not with 100% -you might go out of the frame of the position,before it bleeds enough......(ask somebody to explain u what bleed means )......... and this kind of structured strategies are the best at risk/reward ratio........and u might find how to build such a thing.......when u r grown enough
Whoa, little fella, settle down. Gamma scalping, hedging, flattening deltas-all of these phrases describe the same intention for your position, at least in the context we're discussing. As for the rest of your post, I'm not sure of the point you're trying to make.
on paper or in a real money account after taking all all fees, the value of your time and risks? and is profitable/ "not a lot" like $600 a month or 50 cents?
how about 70% for a month between oct. and nov expiration on december straddle @ 1080 ,with protection 50 points out-put calendars nov/dec @ 1030,and call calendars at 1130...on SPX????? even with just straddle and using only the underline to scalp ,would be very difficult NOT TO MAKE MONEY SPX moved from 1100,down to 1040,than back to 1100........IV rose from 20,to 32,and than back to 24
well,i was lucky....i know when to contribute a gain to luck,and when to reality...... before last month, usually between 5%-20% a month.but 5 -20% are a lot,considering the low risk taking...
Interesting. Could you guys discuss your trade parameters in more detail: - What are the criteria to enter a trade? - What are your criteria to exit the trade? For instance, if you've returned 10% of the total margin requirement. (I'm assuming that you would never put this trade on if you didn't have PM or risk margining) If the vols have moved to your expected place? If you're like me you probably hold the bugger as long as reasonable, but that's an important management idea as well. - What are your experiences when all goes wrong? What's your max loss point when you leave the trade. What type of protection do you enter the trade with? I see that one of you uses calendars, probably at the edge of one or two standard deviations. Does any one just buy long units way OTM for extreme movement protection. If vols explode or move hard against you, have you been more successful waiting it out or do you have a max loss and stick to it? Anyhow, I think these specific ideas will give us a fruitful exchange. Thanks, RedEye
I start out small enough to be able to add continually to the position when it moves against me. The additional long wingstrikes are the key to this type of trading. Even moves in spot as severe as we saw in Sep-Oct 08 are manageable because the downside wingstrikes benefit from a change in gamma and vega that benefit your position.