Intermediate · Smart money · 6 lessons · about 24 min

GEX & Dealer Positioning

Why dealer hedging pins price at some levels and accelerates it through others.

  1. 01What dealers hedgeMarket makers take the other side of most customer options trades. Holding those options exposes them to moves in the underlying.
  2. 02Positive vs. negative gammaNegative amplifies. In a positive GEX regime, dealer hedging opposes price moves. Rallies meet dealer selling.
  3. 03The gamma flipThe gamma flip is the price level where total dealer gamma crosses from positive to negative. Above it, dealers dampen moves.
  4. 04Call & put wallsA call wall is the strike where estimated dealer call gamma is highest. Dealers are assumed long those calls, so as price rises…
  5. 05Why price pinsAs a major expiration approaches, large open interest at specific strikes creates intense dealer hedging pressure.
  6. 06Reading the GEX mapA GEX map shows estimated dealer gamma exposure at each strike. The tallest positive bar is the likely resistance level.

Educational content only. Not financial advice.