Dear All,
If I have a short option position which is in danger of going ITM how do I counter the negative gamma which will keep increasing by adjusting with further otm buys and otm shorts to become neutral?
I understand that being neutral will be a fix temporarily but if the underlying keeps on moving (like a 600 pt adverse move in a week last year) my negative gamma exposure will kill me.I may have to end up shorting 10 options or so which I cant (no margin/capital for that)...
Any suggestions how to tackle this without buying ITM options or buying back shorted options...I hate to buy -ve theta...
If I have a short option position which is in danger of going ITM how do I counter the negative gamma which will keep increasing by adjusting with further otm buys and otm shorts to become neutral?
I understand that being neutral will be a fix temporarily but if the underlying keeps on moving (like a 600 pt adverse move in a week last year) my negative gamma exposure will kill me.I may have to end up shorting 10 options or so which I cant (no margin/capital for that)...
Any suggestions how to tackle this without buying ITM options or buying back shorted options...I hate to buy -ve theta...