Concept Library — free for everyone
GEX — Gamma Exposure
What is GEX?
Gamma Exposure (GEX) estimates how much market makers must re-hedge when the index moves. It is computed from the gamma of every option on the board, weighted by how many contracts are open at each strike.
You don't need the math to use it. What matters is the sign:
Positive GEX — the market is dampened
When dealers are net long gamma, their hedging works against the move:
- Price rises → dealers sell into it.
- Price falls → dealers buy the dip.
The result is a stable, mean-reverting market. Moves stall, ranges hold, and price tends to get pinned near big strikes. Breakout trades struggle in this environment; fading extremes works better.
Negative GEX — the market is amplified
When dealers are net short gamma, their hedging works with the move:
- Price rises → dealers must buy, pushing it higher.
- Price falls → dealers must sell, pushing it lower.
This is squeeze-and-cascade territory: trends extend, moves are fast and vertical, and support/resistance levels break more easily. Momentum trades work; fading is dangerous.
The Flip Level
Somewhere between the put-heavy strikes below and the call-heavy strikes above, total gamma crosses zero. That price is the flip level — arguably the most important level of the 0DTE session:
- Above the flip → positive-gamma behavior (stability, reversion).
- Below the flip → negative-gamma behavior (volatility, trends).
The character of the market changes when the flip is crossed. Many traders use it as a regime line: same chart, completely different playbook on each side.
GEX walls
The strikes holding the board's most extreme gamma act as walls:
- Call wall — the strike with the largest positive (call-side) gamma, usually above spot. Dealer hedging sells into rallies as price approaches it, so moves tend to slow, stall, or pin there. It is the market's natural ceiling — until it breaks, at which point it often becomes an acceleration point.
- Put wall — the strike with the heaviest put-side gamma concentration, usually below spot. It marks where downside hedging pressure is deepest and often acts as the day's floor — but in a negative-gamma market it is a zone of maximum volatility, not calm support.
If price trades through a wall, don't assume the old role holds — a broken wall frequently flips from barrier to magnet or fuel.
Trading the overshoot
When price pokes above the call wall, start looking for a reversal back to the wall: dealer selling is heaviest right there, and the option structure above it is thin — extensions are statistically hard to sustain. The mirror setup exists below the put wall, but treat it as lower quality: down there the market is in negative-gamma territory, where moves amplify instead of dampen.
Two conditions before fading an overshoot: it must still be a range day (price inside the expected move — on trend days reversion logic is off), and the wall must still be standing — walls migrate intraday, and fading a level that has rebuilt elsewhere is fading air.
Walls are not guarantees — they are zones where mechanical resistance to movement concentrates. When a wall breaks in a negative-GEX environment, the move often accelerates, because the force that was containing price is gone.
How you'll see it on the platform
The dashboards show net GEX, the flip level, and the call/put walls in real time, plus how concentrated gamma is across strikes — concentrated boards pin, dispersed boards trend. The Signal Engine combines GEX with DEX to classify the day's regime automatically — see Market Regimes.
Next: DEX — Delta Exposure, the directional half of the regime picture.