What is ?Gamma Scalping??
Gamma Scalping is the practice of buying and selling stock (or underlying future) in order to reduce unwanted directional risk in a position. The process begins with a position that has a delta of zero, like a straddle or strangle, but has a relatively high level of gamma. Normally the position that one has gains includes positive deltas on the upside and negative deltas on the downside.
In essence, the trader attempts to maintain a ?Delta neutral? position.
To read more about Gamma Scalping, check these out:?
Option Block 314: Late-Night Gamma Scalping