u/PandaOk4050

Do you guys know of any clever ways to short gamma without having to sell options?

We've all been there. You do your thing. Some trades work, some don't. We all end up holding baggage.

With a little more upfront capital and some clever thinking, you can now keep the baggage.

This will pertain to long scalping and to some degree, momementum guys.

If you spend a little money upfront, you can buy an ITM put a few weeks out. Then proceed to daytrade as usual. Your baggage is now your hedge to the put.

This allows you to scalp more aggressively with market orders and larger sizes. Because now our baggage is actually lowering the DCA of our hedge.

Im not going to get into the really nuanced stuff of managing a position like this, but the goal is to scalp and build towards delta neutral for close to the breakeven point of the option contract.

This is a longterm play that is supplementary to your short term play. If the price skyrockets in either direction, close both positions and chuckle to the bank.

If price stays stagnant you will still profit from either your hedge (you built for ass cheap) or the intrinsic value of the contract.

That's ontop of your normal scalps.

Ive been having good success using options data to draw comparisons to my main charts.

You have to understand a bit about how people make markets in options trading. Options can be super risky, so to mitigate risk, they hedge their position.

If you SELL calls, your delta is negative. To hedge you gotta SELL puts or BUY underlying stocks. If no one is BUYING puts, you have to BUY stock instead.

So when I see a stock that has a ton of open call interest(for 30 days), little put interest, I know the option market makers have been buying stock.

I then check the stock on a daily time frame, for 30 days. If the price has done nothing but drop for the last month, despite having a bunch of buyers, I know for sure selling preassure is WAY higher. This is a perfect candidate to short over a longer time frame.

Im basically using widely available information to tell if trends will continue or reverse. ​

What Ive learned is sometimes, you can't sell at ask. It finally clicked whats going on.

When bid and ask are above VWAP, this means the ask price is MM shorting and they are covering near bid. To long scalp this, you must buy below bid and sell at bid.

When bid ask is below VWAP, this means bid prices are what MM's are buying for and then selling at ask. To Long scalp this, you buy just above bid, sell below ask.

MM's are obligated to facilitate the ask at all times. If demand comes in and they dont have stock to sell, they short them. They only buy product below VWAP and borrow when above VWAP.

Ive quickly learned, if you daytrade, the only way to win, is buying at the right price.

The last thing you want to do is get product from a market maker. So we buy in the same range as them.

I find this range with really small limit orders around the bid. We want to find the price if we get product, can we insta sell it for min profit within a minute or two?

If you put in a limit order just above bid and it fills really fast, this is usually not good. Just try selling it for min profit.

You will quickly find the range where you can sell product for profit. Now we find out how much profit we can squeeze. Buy a couple more. Sell some at min profit and try selling the rest a little above.

If your hangover is getting sold, you now have a range you can buy and sell for.

Once you find their price range you start scaling up. An example today.

IMCC

If I could get product for .2208 I had no problems selling for .2219 - .2265. I test the ranges fist. Then after I knew i was good I would buy 500 contracts at .2208, sell in lots of 50 between .2219 - .2260

The bid/ask was at .2201 - .2399. Nothing was selling at .2275- .2398

They were baiting people to instafill around .2250 and sell back to them at .2201 when they cant sell at ask.

Man. I tried so many strategies. I finally nailed down something that works. The biggest mistake I made was zeroing in on a couple stocks.

We mostly trade stocks and sectors we like for whatever reason. This is the biggest reason we don't make hardly any money.

The secret is using OCO and taking tons of small bets scattered across all different sectors.

I wager 2% of my portfolio on each trade. And instead of focusing on 1 stock, buy 50 different stocks. Set OCO where you have a stop at 2 - 3% and a limit or trail above 6%. Set them till until cancelled and watch the magic.

This doesnt work with fractional shares. So I just do small caps. Thats why a 6% raise is very do-able.

Some stop out, some make 10+%. It really stretches your money and you ain't sitting there waiting for setups or quenching your asshole when you have the potatoes.

Edit : After some fine tuning to stop and limit sell, I found that setting the stop loss around 8% and having limit sell around 0.5 - 2% is the sweet spot. Gives you wiggle room.

I had many small winners and surprisingly not many stops. Cost basis today of 35 positions = 131.25. 21 closed. 2 stopped out. 6 i could sell for profit 6 are still in the air.

out for 132.75.

The only orders filling are bad entries. Big money pullverizing the shorts today. Gotta wait for the flushes to go long.

Hopefully ya'll had some inventory to sell off today. Be careful.

I usually scalp during the day. But today I wanted to try and build a position over time. A stock I trade alot has been in the 1.25 range the past couple days.

Today during NY open, it tanked down to .80 cents, bounced back up to .95 and went sideways between .90 and .95 for the next 3 hours.

I spent all morning buying 5 shares at a time when prices dropped below .92.

I soon had 100 shares with dca around .91.

The stock then went up to around 1.05 and I dumped them. Definitely way different than scalping, but I kinda like it.

I like keeping my Daytrading seperate from all my other positions. Since doing this my Daytrading has become better. Here are some of the pros.

1. You start everyday at zero. When I had a single portfolio, my longterm investments would skew my mental. Even though I hadn't made a single trade that day my portfolio would either be down or up.

2. Simplicity. You dont have to filter out all the noise. All the positions in your portfolio are fresh and finding them is simple. Adjusting positions is something you need to do on the fly. No more searching through 30 different positions.

So it might not be a strategy that makes a bunch of money, but keeping investments seperate saves so much time daytrading.

I never hear much banter about Entry Size. I want to help new traders not blow up. So this is a good lesson.

I compare entry size to spicing food. Once you overspice something, its impossible to fix.

Same thing goes with entry size. If your initial entry is less than 1% of your portfolio you give yourself options.

You can exit the trade if price goes sideways. If the price temporary takes a shit, because our sizing is so small, you can easily dca down a bit and still profit when things rebound.

The point is if you scale up your entries without proper capital you can't DCA down. Make your entries really small and you can DCA down with small investments on the way down.

Holy shit. Level 2 is awesome for scalping sideways periods! Where has this been my whole life? Its so cool skipping the que line making a buy, then insta selling.

Get third or second in que on the buy. Then get second or third on the sell. I know for sure this would fail on a volatile day, but when ranges are compressed for the day its money.

Anyone else use Level 2 for quick turnarounds?​

I recently stopped using S&R lines.

To understand my thoughts I must go into my back story a bit.

I am a programmer, I build bots for a game online. In this game you buy in-game supplies from an exchange.

One bot in particular, it would buy supplies at dynamic prices. The price was determined by a formula.

Im not a crook, but I realized if I really wanted, I could slowly bleed my customers of all their in-game gold by clever manipulation.

Which leads me to support and resistance lines. The smart money can easily determine where retail are setting these lines. And they have the capital to manipulate prices on a short time scale.

Here recently I started using anti-support and resistance lines. Meaning I would put in buy orders way way under the floor. And shorts way way above the ceiling.

My orders usually dont fill, but when they do, its a jackpot. I got sick of being on the wrong side of liquidity sweeps when using normal S&R lines.

Support and resistance lines make people all warm and fuzzy. Like some sort of safety net. The point is, support and resistance lines are used against you and are broken all the time.

Just food for thought.

I generally dont have problems with Fidelity. But man their buggy computer app royally screwed me today on two trades.

If you set the limit price and do anything to the interface, it switches the price to current price which is so stupid.

So I basically marketed out of two trades that were super juicy. Stuff like that is demoralizing. Atleast market the computer app as beta.

I see alot of misconceptions about VWAP. I use it to see if inventory is long or short. If price is below VWAP for an extended period, inventory is getting long. The opposite means inventory is getting short.

So what happens when inventory is long for too long? The people trapped long liquidate, price moves closer to VWAP then inventory shifts short (price trades above VWAP).

This cycle happens all the time throughout the day. So how do we trade this? We take from VWAP and either go long or short.

We wait for price to be close to VWAP and start making the trade. If inventory just came from being long and is breaking above VWAP we take from VWAP and sell to market going shifting short.

So if we going from long inventory to short, when price reaches vwap we want to go long because the market isnt long anymore.

We place out trades when we near VWAP and distribute to the market. If we coming from inventory long, we go long when price reaches VWAP. If market is coming from short we go short at VWAP.

I found an interesting stock today. Over the past several weeks this stock has a new 13G on file every day or two.

After a ton of research the investors are converting debt to equity. When these guys get shares the price temporary dumps because they selling as fast as possible.

So I have layered buy orders in place to where the more it dumps, the more I buy. Hoping for a quick flip. The prices have been recovering after the dumps.

Yolo!!!

edit: Forgot to mention. I put this on because of another late 13G today.

I see tons of misinformation and bad guidance on this reddit. So I want to help people get better at trading.

In every trade there is a winner and a loser. And this is true in every trade. Someone is losing value while someone gains value.

How do we use this to make money? Imagine tom has a guitar he is willing to sell to you for 300 dollars. You dont play guitar, so you call a pawn shop and find out they'll pay 500 cash for it.

You buy it from tom for 300 and sell it to the pawnshop for 500. You just made 200 bucks being the middle man.

If you want to be a good trader, dont be tom or the pawnshop. We just funnel money from buyer to seller or seller to buyer.

This is the mindset of a pure trader. We dont care what the pawnshop or what tom is willing to pay a week or a day from now. We just see an opportunity to funnel money from one party to another and take whats leftover.

edit : as the middleman, we dont carry inventory. The pawn shop is value investors. They hold inventory for weeks and sell for higher. Tom is the retail fish stuck in a bad trade seeking liquidity.

Market makers do the same exact thing as the middleman. They dont sit on inventory, the get it and move it as fast as possible.