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Using The Greeks To Steer Your Positions

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The option greeks can be used to help ‘steer’ your options positions towards profits. This is also known as ‘Trading By The Numbers’ – or ‘Trading By The Greeks’.

Basically, every option has greek ‘numbers’ associated with where it is currently trading at – and when you start to combine positions together – all of these numbers begin to accumulate together in an ‘overall’ option trading position. And those option traders who understand how options work and how the greeks can effect their positions – they are able to actually start to manage these larger and more complex positions simply by reading the various numbers – or the accumulated ‘numbered’ position – of all the greeks – from each of the options that are in the overall position.

Using these ‘greek numbers’ they can then make adjustments and tweaks to help keep their overall position in the best possible combined set up – and ‘steer’ the overall position in the direction they wish it to go.

Many option traders are put off by the greeks – as they first appear to be too complicated to really understand – however, just spending a short amount of time learning how they work and how to properly read an option greek position can help to improve an options traders overall game dramatically.

Using Option Greeks to Gamma Scalp

A reliable option strategy to cashflow the market during volatile times is Gamma Scalping. This strategy works best in crazy markets unlike the standard option income strategies such as the iron condor, the calendar spread, credit spread, etc. Gamma Scalping is a great alternative for option traders to utilize when volatility reaches levels that make those other option strategies too risky – with the use of option greeks this strategy can deliver the goods as well, producing comparable income if not more.

One way to think of gamma scalping is to compare it to day trading – where the trader is looking to capture profits from quick little moves – however the difference here is that due to this strategy set up – most of the risk that is normally associated with day trading has been removed. 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. 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.

If you have ever put on a directional trade, actually started to make a profit, then watch your stock promptly turn around and head right back to where it started from erasing your gains, gamma scalping is a strategy you should look into.

Gamma Scalping eliminates this. When profits are realized – gamma scalping allows you to capture them forever. And if the underlying continues the move – or heads back to where it started from – MORE profits continue.

During wild crazy times, especially like the extremely volatile markets we are currently experiencing in the markets, with help from the option greeks - Gamma Trading should be considered a ‘must have’ method for option traders to learn how to use correctly.

And along with being profitable – it’s actually quite an enjoyable way to trade too.

Welcome To Option Greeks dot net

Welcome to our Option Greeks Website. Here we will explore how to use the option greeks to generate profits