Hello...I'd like to know how the strike that maximizes Gamma is practically used, as I'm facing it first time.Assuming I want to go long an ATM straddle, in general one leg will be OTM and the other ITM.Objective is to profit on either underlying movements or iVol increase or both.Does it make sense to buy the strike that maximizes Gamma, although it may not be the closest to ATM?(and then minimizing/zeroing Delta, of course)When that does not make sense?Thanks a bunch in advance!---------------------------------Editing/Adding: as is well known, Gamma may not be max for the strike closest to ATM. Given S, Gamma is max for the strike K = S exp((r-q + 0.5 sigma^2)T)

In general Gamma is biggest for ATM options, which makes sense if you take a look and at the graph of Delta.I suppose that you want to "play" your Delta ie make money as the underlying moves by Delta hedging your position. If this is the case the best way to do it, in my opinion, would be by buying a strange, as it is cheaper, and you spread your Gamma.

another way to do the skew (OTM/ITM) trade is by financing with a butterfly spread....

look at the "Know Your Weapons" paper by Collector

Daveangel, I was exactly looking into that but I did not pay enough attention to two lines that explain the strike for max GammaP. It's there and all clear now. Thanks.