If you've spent any time in options trading communities, you've probably heard the term GEX — Gamma Exposure. It's one of the most powerful concepts in modern market structure analysis, and understanding it can fundamentally change how you read price action.
The Short Version
GEX measures the total gamma that options market makers (dealers) hold at each strike price. When dealers hold a lot of gamma, they're forced to hedge by buying or selling the underlying stock — and this hedging creates predictable support and resistance levels.
Key Insight
GEX doesn't predict direction. It predicts how the market will behave at specific price levels — whether it will bounce, consolidate, or accelerate through.
How Market Makers Create GEX
When you buy an option, a market maker takes the other side. They don't want directional risk, so they hedge by trading the underlying stock. The amount they need to hedge changes as the stock price moves — this is gamma.
Positive gamma (when dealers are long gamma): Dealers buy dips and sell rallies. This creates a dampening effect — the market tends to stay range-bound and mean-revert.
Negative gamma (when dealers are short gamma): Dealers sell dips and buy rallies. This creates an amplifying effect — moves accelerate, and you see bigger swings and potential cascades.
Key GEX Levels Every Trader Should Know
Zero Gamma (Gamma Flip)
The strike price where net dealer gamma flips from positive to negative. Above this level, dealers dampen moves. Below it, they amplify them. This is arguably the most important GEX level.
Call Wall
The strike with the highest positive gamma from call options. Acts as a strong resistance level because dealers sell into rallies as price approaches.
Put Wall
The strike with the highest negative gamma from put options. Acts as a support level, though it can accelerate selling if broken.
Total GEX
The sum of all gamma across all strikes. When total GEX is high and positive, expect low volatility and mean-reversion. When it's negative, expect elevated volatility and trending moves.
Dealer Positioning
Whether dealers are net long or short gamma overall. This is the single biggest factor in determining market regime — low-vol grind vs. high-vol swings.
How to Use GEX in Your Trading
GEX is most useful as a regime filter — it tells you what kind of market you're in before you pick a strategy:
- High positive GEX → Sell premium. The market is pinned and will mean-revert. Iron condors and credit spreads thrive.
- Negative GEX → Buy protection or trade momentum. Moves will be amplified. Directional plays and debit spreads work better.
- Near the gamma flip → Be cautious. This is the transition zone where regime can shift quickly.
- Approaching the call wall → Resistance likely. Consider taking profits on longs or entering short-term bearish positions.
- Breaking below the put wall → Acceleration risk. Dealers will sell into the decline, potentially triggering a cascade.
GEX and 0DTE
The explosion of 0DTE (zero days to expiration) options has made GEX more important than ever. Same-day options have extremely high gamma — small price moves cause massive hedging flows. On heavy 0DTE days, intraday GEX levels shift rapidly, creating short-lived but powerful support and resistance zones.
This is why real-time GEX analysis matters. Static end-of-day GEX snapshots miss the intraday dynamics that 0DTE options create.
Where GEX Data Comes From
GEX is calculated from open interest (OI) data across all option strikes and expirations. The formula multiplies each option's gamma by its open interest and the contract multiplier (100 shares for equity options). Calls contribute positive gamma and puts contribute negative gamma from the dealer's perspective.
The challenge is getting accurate, real-time OI data and computing the Greeks for every strike. This requires a professional data feed (like Interactive Brokers) and significant computation.
See GEX In Action
OPEX Trader calculates real-time GEX across all strikes and expirations, with dealer positioning analysis, gamma flip detection, and AI-powered regime classification.