Many option income traders think that when markets are volatile they need to stay out of the game. Not so. Enter Gamma Trading. Here is a little known option trading strategy that can provide consistent profits from markets that seem too wild and choppy to use the usual strategies like iron condors, calendars, and credit spreads.
This strategy is initially set up to profit no matter what the market winds up doing. If the stock or index being used immediately goes up or down, a gain should be realized either way. Then, using the gamma scalping adjustment technique, the trader can lock in those gains, capturing the profit, and then immediately 're set' the trade to once again make a profit no matter what the stock or index being used winds up doing.
When gamma scalping - the trader doesn't care which way the market will be heading. The trade is set up to profit either way. Up or down - its all good. And the bigger the moves, the better.
Then, when a move has occurred and a profit has been realized in the position, using an easy to follow set of rules, the trader can perform an adjustment that immediately lock in that profit while setting up the position to profit again no matter what the underlying winds up doing. And this can be done over and over again - continually scalping profits out of the trade.
One of the most frustrating things to directional traders is when a trade actually goes in their direction, making them profit, only to immediately revers and go the other way, wiping out their gains, and perhaps even then dipping lower putting them into losses. Gamma Scalping is a strategy that can erase that frustration because it immediately locks in those realized gains while repositioning itself to once again be profitable if the underlying instrument moves either way.
Once a gain is showing on the trade - through gamma scalping you can lock that in. And once again, the method used to lock that profit in, positions the trade back to it's starting point - where if the underlying continues moving in the same direction - or stops and returns back to where it came from - MORE profits can continue.
For option income traders who are struggling in these especially volatile times trying to use the standard income trades like condors, credit spreads, and calendars, Gamma Trading is a good method to learn and consider using and adding to their collection of other option strategies.
And along with being profitable - it's actually quite an enjoyable way to trade too.
This strategy is initially set up to profit no matter what the market winds up doing. If the stock or index being used immediately goes up or down, a gain should be realized either way. Then, using the gamma scalping adjustment technique, the trader can lock in those gains, capturing the profit, and then immediately 're set' the trade to once again make a profit no matter what the stock or index being used winds up doing.
When gamma scalping - the trader doesn't care which way the market will be heading. The trade is set up to profit either way. Up or down - its all good. And the bigger the moves, the better.
Then, when a move has occurred and a profit has been realized in the position, using an easy to follow set of rules, the trader can perform an adjustment that immediately lock in that profit while setting up the position to profit again no matter what the underlying winds up doing. And this can be done over and over again - continually scalping profits out of the trade.
One of the most frustrating things to directional traders is when a trade actually goes in their direction, making them profit, only to immediately revers and go the other way, wiping out their gains, and perhaps even then dipping lower putting them into losses. Gamma Scalping is a strategy that can erase that frustration because it immediately locks in those realized gains while repositioning itself to once again be profitable if the underlying instrument moves either way.
Once a gain is showing on the trade - through gamma scalping you can lock that in. And once again, the method used to lock that profit in, positions the trade back to it's starting point - where if the underlying continues moving in the same direction - or stops and returns back to where it came from - MORE profits can continue.
For option income traders who are struggling in these especially volatile times trying to use the standard income trades like condors, credit spreads, and calendars, Gamma Trading is a good method to learn and consider using and adding to their collection of other option strategies.
And along with being profitable - it's actually quite an enjoyable way to trade too.
About the Author:
Learn more about gamma scalping. Stop by Ted Nino's site where you can find out all about how to trade the iron condor strategy for consistent monthly cashflow.
