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Gamma Exposure (GEX)

GEX quantifies the dollar value of stock that options market makers must buy or sell to stay delta-neutral for every 1% move in the underlying.

Why it matters

Market makers sell options to retail traders and hedge their exposure by trading the underlying stock. When they hold net long gamma (positive GEX), they buy dips and sell rallies — a stabilizing force. When they hold net short gamma (negative GEX), they sell dips and buy rallies — amplifying moves.

Positive GEX → mean-reverting environment. Negative GEX → trending, momentum environment.

Reading the GEX chart

The bar chart shows net GEX by strike price. Green bars indicate strikes where dealers are net long gamma (stabilizing). Red bars indicate net short gamma (destabilizing).

• Call Wall: The strike with the highest positive GEX — acts as a ceiling where dealer selling pressure increases.
• Put Wall: The strike with the most negative GEX — acts as a floor where dealer buying pressure increases.
• Gamma Flip: The strike where net GEX crosses zero. Below this level, momentum tends to amplify.
• OI Walls (amber flags): Strikes with statistically significant open interest concentration — often coincide with GEX levels.

Using it intraday

GEX levels are not price magnets — they are zones where dealer hedging creates predictable pressure. When price approaches a large positive GEX strike, dealer selling acts as resistance. When price breaks below the Gamma Flip into negative GEX territory, expect momentum to accelerate.

Combine GEX with Hedge Pressure (flow direction) and Vol Regime (whether vol is suppressed or elevated) for a fuller picture before trading into a level.