Define the Term “Gamma Scalping” and How It Utilizes High-Gamma Options.
Gamma scalping is an active trading strategy where a trader attempts to profit from the rapid changes in an option's Delta (high Gamma). The trader maintains a Delta-neutral position by continuously buying or selling the underlying asset as the price moves.
They profit by buying the underlying asset when the Delta decreases and selling when the Delta increases, capturing small, frequent gains.