Gamma exposure (GEX)

What it is

Gamma exposure (GEX) is an estimate of the dollar gamma that options dealers carry at each strike, built from open interest. Dealers hedge to stay delta-neutral, so their gamma decides which way they have to trade as price moves. The usual convention assumes dealers are long the calls and short the puts that customers hold. It is a model of positioning, since nobody outside the dealers sees their real book.

Positive vs negative GEX

Positive GEX (net long gamma): Market makers buy dips and sell rips. Price tends to mean-revert and get pinned near high-GEX strikes. Realized volatility compresses.

Negative GEX (net short gamma): Market makers are forced to buy into strength and sell into weakness, amplifying moves. The market can trend hard with thin air pockets because there is no stabilizing force from hedging.

The gamma flip

The price level where aggregate GEX flips from positive to negative is called the gamma flip point. Below it, the market is in an amplifying regime; above it, a stabilizing one. Watch the flip level as a potential inflection point, not a support/resistance in the traditional sense.

Practical use

GEX levels show where large concentrations of open interest create structural friction. Price often consolidates or reverses near a high-GEX strike because the hedging flows at that level create two-way activity. GEX is not a prediction tool, it is a map of where mechanical forces are concentrated.