Having trouble understanding this. Most of the gurus recommend it and boast about how much money they have made doing this..
From what I read, you buy/sell to bring delta of the overall trade to zero. that just confuses me.. can someone please answer the questions i have regarding this
Does that mean we ignore the time value of the options and let the options expire worthless if the overall delta is set at zero?
How exactly do you make a profit when you continuously selling/buying options/stocks? How do you know you are making a profit?
Do you ever close out the entire trade or you just go on forever?
If done properly what returns can we expect from delta neutral trading? 5%? 10%? 20%!?!?! :P
Is there a book you would recommend I can read to learn about this type of trading?