What is Gamma in Options trading?

GAMMA is a crucial concept in options trading that often gets overlooked

It measures the rate of change in an option's DELTA in relation to changes in the stock’s price

Let’s dive into it

$NVDA

A brief thread 🧵 👇👇👇 Quick note about Gamma in Options trading:

✅ Selling options = gamma negative

✅ Buying options = gamma positive

For every $1 move in stock price the DELTA moves by the amount of GAMMA

In simple terms:

✅ Gamma measures how quickly delta changes

Some folks think that only they know how to run the “OTM LEAPS and sell OTM short calls” diagonal spreads

😂😂

You don’t need a $5,000 course for that

Here it is for FREE 😂👇👇

Example: $AMZN ✅ Buy an OTM $AMZN LEAPS Call for cheap

✅ 12/17/27 $300c

✅ Premium Paid: $2,243

You don’t have to spend hours and hours to generate cash flow

You can make 2-3 trades in a MONTH using $10,000 to generate $200 monthly

That’s an annual return of 24% before compounding

How?

By selling options

A thread with some example trades🧵

👇

$ASTS $OSCR $SOUN ✅ Sell a $ASTS Put

- 10/24 $42p

✅ Premium: $116

Collateral used: $4,200

Hey traders!

🚨Let’s dive into selling options using Delta as your guide

I target Delta 0.15-0.25 for high-probability trades...

But I tweak based on Bollinger Bands, RSI, & MACD

Want to know how to use Delta to sell options like a pro? Let’s break it down! 👇👇 First up: What’s Delta? 🤔

In simple terms

Delta shows how much an option’s price moves when the stock moves $1

Calls have positive Delta (0 to 1)

Puts negative (-1 to 0)

It tells you roughly the odds the option ends ITM

Delta 0.20? ~20% chance it’s ITM at expiration📷

The Power of Trading Stock Options

$200 to $500 a month while using $10,000 in capital

Let me show you my 5 favorite ways to do this with some examples

👇👇👇 You can simultaneously manage risk while also generating a good income stream

And once you learn it and master it…you can scale it

Here are my 5 favorite strategies:

Options Trading becomes much easier if you are working with a decent amount of capital

Why?

You can turn a losing trade into a winning one

Here's how 👇👇 I sold an $AMD Put Credit Spread on March 26

- 4/4 $104/107

- Used $300 of collateral

✅Credit: $59

- MAX LOSS: $241

But...

Then the Tariff news happened...

And $AMD cratered...

Just like most other stocks

How I use delta for my options trades?

I make a variety of different trades

Different stocks and different scenarios

The delta I use is different for each of these trades

A thread 🧵 👇👇

You will definitely wanna BOOKMARK it

$NVDA $AMZN $TSLA $MSTR $SPY $QQQ What is Delta in Options Trading?

Delta is a risk metric in options trading

It measures the sensitivity of an option's price to changes in the underlying stock

Example:

$NVDA put👇👇👇

You don’t have to spend hours and hours to generate cash flow

You can make 2-3 trades in a MONTH using $10,000 to generate $200 monthly

That’s an annual return of 24% before compounding

How?

By selling options

A thread with some example trades🧵 👇

$HOOD $HIMS $SOFI ✅ Sell a $HOOD Put

- 6/13 $45p

✅ Premium: $99

A thread 🧵 about how I managed a $TSLA Covered Call the last couple of weeks

It’s a thread about rollover

But not the kind that you traditionally think about

On 4/25 I sold this Covered Call:

- 5/2 $315
- 2 contracts

✅ Premium: $236 🔥

$TSLA was at $280 at the time 👇👇 On 5/2 $TSLA stock was around $288-300

So I rolled up the call to the following week

Went $15 higher on strike now

- 5/9 $330

✅ Premium: $228

🔥🔥

Got about the same premium

But allowed me to select a $15 higher strike

🚨 $HOOD trade idea 🚨

Buy a deep in-the-money LEAPS Call

✅ 1/15/27

✅ Premium to pay: $2,913

✅ Delta: 0.89

But…

That’s not all

You pair this trade with a few other trades

A thread 🧵 👇👇👇 You sell a short call a month out in expiration

$HOOD

✅ 6/6 $60c

✅ Premium: $85

You keep selling low delta calls to earn premium

But…

You gotta make sure you don’t allow the short call to get called away 👍

A Covered Call strategy isn’t a “one size fits all” strategy

There are various different ways to sell Covered Calls

Let’s dive in 👇👇

$NVDA $TSLA $AMZN $QQQ $SPY

A thread 🧵 ✅ Selling on Long Term Holds

On the occasional times that I sell Covered Calls on my long term shares…

I look to sell at a delta 0.15 or lower

My goal is to make some extra income

And not lose my shares

I do this very occasionally after share prices have jumped

Option Selling helps me generate $1000s per week in cash flow

My sweet spot for selling options is Delta 0.15 to 0.25

Let's talk about the benefits of selling options with a delta of 0.15 to 0.25

👇👇👇 What’s delta?

Delta measures the sensitivity of an option's price to changes in the price of the stock

Options with a delta of 0.15 to 0.25 are slightly out-of-the-money (OTM)

Meaning the strike price is above (for calls) or below (for puts) the current stock price

A thread 🧵 on the Put/Call ratio

The Put/Call ratio is a popular indicator used in options trading

It’s used to gauge market sentiment and potential price direction

Let’s dive in 👇👇 The Put/Call ratio is a key options trading indicator

It’s simple ✅

Total put options divided by total call options

It shows market sentiment and can hint at price direction

Let’s break it down 👇👇

How I use delta for my options trades?

Different stocks and different scenarios

I make a variety of different trades

The delta I use is different for each of these trades

A thread 🧵 👇

You will definitely wanna BOOKMARK it

$NVDA $AMZN $TSLA $SPY $QQQ What is Delta in Options Trading?

Delta is a risk metric in options trading

It measures the sensitivity of an option's price to changes in the underlying stock

Example:

$TSLA put 👇👇👇

🔥 The Importance of Open Interest in Options Trading 🔥

Open interest is a measure of market activity

So what does little or no Open Interest vs high Open Interest mean?

A thread 🧵👇👇 Little or no Open Interest?

That means there are no opening positions or nearly all the positions have been closed

High Open Interest?

That means there are many contracts still open

Many open contracts mean market participants will be watching that market closely

How I use delta for my options trades?

I make a variety of different trades

Different stocks and different scenarios

The delta I use is different for each of these trades

A thread 🧵 👇👇

You will definitely wanna BOOKMARK it

$NVDA $AMZN $TSLA $MSTR $SPY $QQQ What is Delta in Options Trading?

Delta is a risk metric in options trading

It measures the sensitivity of an option's price to changes in the underlying stock

Example:

$NVDA put 👇👇👇

What is Theta in Options Trading?

Theta measures the rate of decline in an option's value with the passage of time

Time decay

A brief thread 🧵👇👇 Theta...

Also known as time decay is a critical factor in option pricing and a key tool for option sellers

Let's dive into how savvy traders leverage theta to their advantage

👇👇

Top 8 mistakes beginner options traders make

And how to avoid them:

Thread 🧵 Options have great benefits

You can cut losses, protect your gains and control big chunks of stocks with a relatively smaller amount

But…

You can also quickly lose more money than you invested with options

🚨 $GOOGL trade idea 🚨

Buy a deep in-the-money LEAPS Call

✅ 12/18/26 $130c

✅ Premium to pay: $62

✅ Delta: 0.86

But…

That’s not all

You pair this trade with a few other trades

A thread 🧵 👇👇👇 You sell a short call a month out in expiration

$GOOGL

✅ 1/10/25 $190c

✅ Premium: $81

You keep selling low delta calls to earn premium

But…

You gotta make sure you don’t allow the short call to get called away 👍

A Covered Call strategy isn’t a “one size fits all” strategy

There are various different ways to sell Covered Calls

Let’s dive in 👇👇

A thread 🧵 ✅ Selling on Long Term Holds

On the occasional times that I sell Covered Calls on my long term shares…

I look to sell at a delta 0.15 or lower

My goal is to make some extra income

And not lose my shares

I do this very occasionally after share prices have jumped

A Covered Call strategy isn’t a “one size fits all” strategy

There are various different ways to sell Covered Calls

Let’s dive in 👇👇

A thread 🧵 ✅ Selling on Long Term Holds

On the occasional times that I sell Covered Calls on my long term shares…

I look to sell at a delta 0.15 or lower

My goal is to make some extra income

And not lose my shares

I do this very occasionally after share prices have jumped