With puts and calls there 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 works best in crazy markets unlike the standard option income strategies such as the iron condor, the calendar spread, credit spread, etc.

This strategy is initially set up to profit no matter what the market winds up doing. The set up for this trade can profit regardless of what the stock or index being used winds up doing – if it moves up, a gain is made – If it moves down, a gain is made – and then, when a profit has been realized, the trader can immediately lock in that profit and ‘re-set’ the position so that it will profit again regardless what happens from that point forward.

When gamma scalping – the trader doesn’t care which way the market will be heading. We just want it to move. If the market goes up – that’s great. If it goes down – that’s great too. The underlying just needs to move.

After a predetermined profit has been realized from a move in either direction, a quick adjustment is made to the trade to lock that profit in forever – and, this same adjustment re sets the position to kick out even more gains no matter what the stock being used ends up doing, even if it just moves right back to the same spot it started from when the trade was first put on. 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 eliminates this. Wether the market heads up or falls down – we don’t care – either way we can make money. And if the underlying continues the move – or heads back to where it started from – MORE profits 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 stress free and profitable – using puts and calls trading in this way is fun too.

Hear more about butterfly spread option trading . go visit Ted Nino’s site where you can find out all about how to trade covered puts and calls strategy for consistent monthly cashflow.

Tagged with:

Filed under: Currency Trading

Like this post? Subscribe to my RSS feed and get loads more!