Guide
What is GEX (gamma exposure)?
Gamma exposure – GEX – estimates how much option dealers have to buy or sell the underlying to stay hedged as the price moves. Because dealers are some of the largest participants in index options, their hedging leaves footprints you can see in the price.
Why dealer hedging moves the market
A dealer who sells you an option usually hedges the direction risk by trading the underlying. How much they have to adjust as price moves is set by the option's gamma. Add that up over every strike and expiry and you get the market's gamma exposure.
- Positive gamma: dealers buy dips and sell rips to stay hedged. That tends to slow moves down and pin price.
- Negative gamma: dealers sell into weakness and buy into strength. That tends to speed moves up.
The levels on the chart
- Zero gamma (gamma flip)
- The price where total gamma exposure changes sign – the boundary between the calm and the volatile regime.
- Major positive (call wall)
- The strike with the largest positive gamma. Price often slows down or stalls here.
- Major negative (put wall)
- The strike with the largest negative gamma. Often support – and a trigger for faster moves if it breaks.
- By volume vs by open interest
- Open interest is published once a day before the open and describes positions carried overnight. Volume-based GEX uses today's trading and reacts during the session – for 0DTE it's usually the one to watch.
How traders use it
- Pick the regime: above zero gamma, fade the edges; below it, respect momentum.
- Mark the walls as likely reaction zones for entries, targets and stops.
- Watch the flow: when the walls move or max change lights up a strike, positioning is shifting.
GEX is context, not a signal on its own. Combine it with your own price action and risk management.