Options Intrinsic Value – How To Trade Options Video 36

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Hello, tradeologists. Today, we opened up with a much higher market. It’s July 30, and we are Day 3 into our Gamma Scalping trades. Since we are slightly long Delta at the open, we have a profit of about $1700.

I’ll show you AVP. AVP closed yesterday at about $37.50, and it opened today at about $43. It’s up almost $5. It’s an absolutely tremendous run here. Now, we have a dilemma. What we can do is, we can either take our profits here, at a couple of thousand dollars on this trade, or we can wait, and maybe even sell some additional shares short, in case it falls back down, to capture our profits.

We have a dilemma here. It’s a good dilemma. We’re up $2100 on the trade. I have some decision-making to do here. We’re long 386 Deltas. I can sell another 380 shares short, to lock in these profits, or we can let this run. I’m going to do a little bit of analysis, and a little bit of thinking on this, and I’ll do an update for you as the day progresses.

At this point, I guess I decided to take my profits. We have a couple of thousand dollars of profit in here. We have $2300 right now. Actually, because of the put – the put is actually worth 2 cents. We can leave those open. If the market does trade down again, we should be able to get some additional profits from that.

I’m just watching the charts here. If it continues to move up, the more it moves up, the more money I make. I’m just going to keep an eye on that for a little while. It’s really on a tear here. I have to think about how long that’s actually going to last. I’m going to go ahead and put my sell order in here. This is a huge run-up. It’s hard for me to believe that’s going to continue, and there are plenty of opportunities out there for Gamma Scalping.

It looks like it’s slowing down. I’m going to put my orders in.

As far as the trade itself goes, it was a very successful trade. We had $2400 in profits on that. We had it for 3 days. That’s with taking a totally neutral position. We bought both the calls and the puts. Now, I have a free put, here. In case it trades back down, I might be able to get a little bit of money out of that.

It’s a very successful trade. Let’s take a look at Adobe, ADBE. It looks like we’re down a little bit on Adobe today, so I think what we’ll do is just take a look at this. It’s not really moving too much. I like to see Adobe move a little bit more. Hopefully it does. The stock is at 41.05 right now. We’re still in a fairly Delta-neutral position. I’m going to be looking for some additional candidates here, for another Gamma trading situation.

We still have 16 days left in the August expiration. There are plenty of opportunities out there. I’m going to be scrolling through my watch list. I have a couple of other lists here that I can use to identify some additional Gamma scalping opportunities.

So far, 3 days into the trade, we’ve made a $2400 profit. I’m happy with that. I’ll update you during the day, as we continue. If we find additional candidates for Gamma scalping, I will certainly let you know in these updates.

Stay tuned.

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