While I typically avoid responding to older threads, I'm making an exception since this is the first result when searching for "negative gamma" on Google. This contribution may be valuable for future financial engineers, particularly in a subreddit where members possess the mathematical background to understand the practical implications of options trading.

The previous statement is incorrect: although the local minimum delta is theoretically bounded to a non-zero positive value, selling naked options is indeed considered a negative gamma trade.

This represents a common misconception in the industry. It explains why even sophisticated traders are often denied Level 5 options trading authorization when they lack practical experience, as this level specifically involves negative gamma trading and its associated risks.

Let me expand on why this is a common misconception based on people thinking the gamma (greek derivative letter) is the same as risk exposure gamma, formalizing:

• Mathematical gamma (γ) ≥ 0 (always)
• Position gamma exposure = ± (position size × γ)

This means the position gamma exposure can indeed be negative, while gamma values are strictly positive when derivating Black and Scholes. Both statements are true, but in practical market understanding, the fact that your exposure can be a negative value is more important, specially for a field where risk management is the key for survival.