GEX (Gamma Exposure) measures the total dollar value of stock that options market makers must buy or sell to stay delta-neutral for every 1% move in the underlying asset. A positive GEX reading means dealers are long gamma — they act as a stabilizing force, selling into rallies and buying dips. A negative GEX reading means dealers are short gamma — they amplify moves, buying rallies and selling dips. SpotGamma coined the term GEX and built the first platform to calculate and publish it systematically. Understanding GEX tells you what kind of market you are in before it happens.

What GEX Actually Measures

The concept sounds technical but the meaning is direct. Every options market maker runs a delta-neutral book. When a trader buys a call, the dealer sells it and immediately hedges by buying shares in the underlying — a quantity determined by the option's delta. As the stock moves, that delta changes. The rate of change in delta per dollar move in the underlying is gamma. Dealers must continuously re-hedge as gamma shifts — and that re-hedging creates real buying and selling pressure in the stock market itself.

GEX converts all of that activity into a single dollar figure. If the S&P 500 has a GEX of +$5 billion, it means that for every 1% move in the index, dealers need to transact approximately $5 billion in stock to maintain their hedges. That is not a theoretical number. It shows up as actual order flow, and it has a measurable effect on price action and realized volatility.

That dollar figure is the signal. A large positive GEX number means enormous stabilizing force. A negative GEX number means that same force is working in the opposite direction — accelerating moves rather than damping them.

How GEX Is Calculated

We calculate GEX as:

GEX = Gamma × Open Interest × Contract Multiplier × Spot Price²

For each options contract in the market, we take its gamma (the sensitivity of delta to a $1 move in the underlying), multiply it by the total open interest (number of contracts outstanding), multiply by 100 (the standard contract multiplier), and multiply by the spot price squared to express the result in dollar terms. We then sum this across every strike and expiration for the underlying.

The sign convention matters: call options contribute positive GEX (dealers who sold calls are long gamma and buy dips, sell rallies). Put options contribute negative GEX (dealers who sold puts are also long gamma in aggregate, but put gamma creates the opposite directional hedging dynamic). The net of all calls and puts gives the aggregate dealer gamma position — what we report as Net GEX.

This calculation runs across millions of contracts. The reason SpotGamma built dedicated infrastructure for it is that doing it correctly — with accurate open interest data, intraday spot prices, and real-time model inputs — is non-trivial. When someone quotes a GEX number, the quality of the underlying data and calculation methodology matters enormously.

Positive GEX vs. Negative GEX: The Two Market Regimes

Positive GEX — The Stabilizing Regime

When net GEX is positive, dealers are net long gamma across the options market. Their hedging behavior is mechanically counter-trend: as the market rises, their deltas increase, so they sell stock to rebalance. As the market falls, their deltas decrease, so they buy stock to rebalance. This is the definition of a stabilizing feedback loop.

In a high positive GEX environment, you typically see:

• Compressed realized volatility — dealer flow absorbs intraday swings
• Range-bound price action — the market grinds within a band, struggling to sustain large directional moves
• Mean-reverting behavior — breakout attempts often fail and snap back
• Lower VIX — implied volatility tends to compress alongside realized volatility

These environments favor premium-selling options strategies: covered calls, cash-secured puts, iron condors, and calendar spreads. The market cooperates with theta decay when GEX is strongly positive.

Negative GEX — The Amplifying Regime

When net GEX is negative, dealers are net short gamma. Their hedging flips to pro-trend: as the market rises, their short gamma position forces them to buy more stock. As the market falls, they must sell more stock. This is the destabilizing feedback loop.

In a negative GEX environment, you typically see:

• Expanded realized volatility — dealer flow accelerates moves rather than damping them
• Trending or explosive price action — moves sustain and extend further than fundamentals alone would predict
• Whipsaw and gap risk — intraday reversals can be sharp and violent
• VIX spikes — implied volatility rises with realized volatility

These environments favor directional positioning and long premium strategies: long calls, long puts, straddles, strangles, or simply staying in cash and waiting for the regime to shift. Selling premium into a negative GEX regime is fighting the structural flow.

GEX by Strike: The Full Profile

The single net GEX number is useful, but the strike-level breakdown is where GEX becomes a precision tool. Not all strikes contribute equally — some concentrations of open interest create massive gamma at specific price levels. Those levels act as structural anchors in the market, distinct from any technical chart pattern.

The key strike-level GEX metrics we track:

• Call Wall — the strike with the highest concentration of call gamma. This is a ceiling. As the market approaches this strike, dealer hedging pressure increases dramatically (they sell stock to rebalance their long call gamma), creating strong resistance. Breakouts above the Call Wall are rare and often signal a regime shift.
• Put Wall — the strike with the highest concentration of put gamma. This is a floor. As the market falls toward this strike, dealer put-hedging creates buying pressure, creating structural support. A break below the Put Wall is a meaningful signal.
• Net GEX — the aggregate of all call and put gamma across all strikes and expirations. This is the summary number — positive or negative — that tells you the overall dealer positioning regime.
• Gamma Flip — the price level at which net GEX transitions from positive to negative (or vice versa). Above the Gamma Flip, dealers are stabilizing. Below it, dealers are amplifying. The Gamma Flip is one of the most important levels we publish — it defines which regime you are in at any given price.
• Volatility Trigger — a related concept: the price level at which dealer hedging activity shifts in a way that affects implied volatility. Below the Volatility Trigger, volatility tends to rise. Above it, volatility tends to compress.

GEX and Market Regimes: Reading the Environment

The practical skill in GEX analysis is learning to read the overall level and shape of the GEX profile — not just whether it is positive or negative, but by how much, and where the key strike concentrations sit relative to current price.

High positive GEX (market well above Gamma Flip): Maximum stabilization. The market is pinned. Expect slow, grinding price action with limited range. Options premium is likely to decay rapidly. This is the environment for theta strategies.

Low positive GEX (market near Gamma Flip): Transition zone. Dealer stabilization is weak. The market is sensitive to catalysts. A moderate selloff can push the market into negative GEX territory, triggering a volatility regime shift. This is the most dangerous zone for complacent premium sellers.

Negative GEX (market below Gamma Flip): Amplification regime. Expect volatile, trending price action. Moves are larger, faster, and more sustained than they appear. Do not fade the trend mechanically. Options premium is expensive for a reason — realized volatility is elevated.

Watching GEX shift from positive to negative — particularly as large options expirations roll off and open interest resets — is one of the most reliable leading indicators of volatility regime changes available to market participants.

How Traders Use GEX in Practice

Identifying Structural Support and Resistance

The Call Wall and Put Wall are not chart levels. They emerge from actual dealer positioning — real hedging flows that will execute in the market whether or not any trader notices them on a price chart. When the S&P 500 approaches the Call Wall on a GEX profile, that resistance has a quantifiable dollar amount of selling pressure behind it. This makes GEX-derived levels fundamentally different from, and often more durable than, traditional technical support and resistance.

Anticipating Volatility Regime Shifts

Watching GEX trend toward zero — and then watching it cross into negative territory, particularly as major expirations approach — gives traders advance warning of volatility expansion. The transition from positive to negative GEX often precedes VIX spikes by hours to days. Monthly OpEx (options expiration) events matter here: as large open interest positions expire, the dealer hedge that was suppressing volatility is removed, and the market can move more freely.

Options Strategy Selection

GEX provides a rational framework for choosing which options strategies to deploy:

• High positive GEX → sell premium (covered calls, cash-secured puts, short strangles, iron condors). The environment structurally supports theta decay.
• Near or below Gamma Flip → reduce short premium exposure. Increase long gamma or go directional.
• Deep negative GEX → buy directional options or use long straddles/strangles to capture the amplified realized volatility against elevated but justified implied volatility.

SpotGamma's GEX Tools in Equity Hub

SpotGamma's Equity Hub is the most complete GEX analytics platform available. Every metric in Equity Hub is derived from our proprietary GEX calculations, updated throughout the trading day. Key tools:

• Net GEX — the aggregate dealer gamma position in dollar terms. Positive or negative, large or small — the single number that tells you the regime.
• Call Wall — the highest gamma call strike. Published daily for SPX, SPY, QQQ, and major single-stock underlyings. Acts as dynamic resistance.
• Put Wall — the highest gamma put strike. Acts as dynamic support.
• Gamma Flip — the transition price from stabilizing to amplifying dealer behavior. Updated intraday. The most important single level we publish.
• Volatility Trigger — the price level where realized and implied volatility dynamics shift. Below this level, expect elevated vol; above it, expect compression.
• Gamma Heatmap — a visual representation of GEX by strike and expiration across the full options chain. Identifies where gamma is concentrated and how it will evolve as expiration approaches and price moves.
• GEX by Expiration — breaks down net GEX contribution by each expiration date, showing which expirations are driving the current regime and when that gamma will roll off.

HIRO (our real-time delta flow indicator) complements GEX by tracking actual options delta flow as it happens intraday — showing whether the flow is net long or short gamma in real time, giving traders a live window into how dealer positioning is evolving during the trading session.

GEX for Indices vs. Single Stocks

GEX is most powerful — and most widely cited — for index underlyings. SPX and SPY have the largest options markets in the world, with trillions of dollars in open interest. The aggregate GEX for the S&P 500 reflects dealer positioning that is large enough relative to market cap to have a measurable, systematic effect on realized volatility and price action. This is why SPX GEX is the primary regime indicator we track.

QQQ GEX matters for the Nasdaq and tech-heavy portfolios. It often diverges from SPX GEX in interesting ways — particularly during earnings seasons when single-stock options in AAPL, NVDA, TSLA, AMZN, and META accumulate significant open interest.

For single stocks, GEX is most meaningful for names with large, liquid options markets. AAPL, TSLA, NVDA, AMZN, META, and a handful of others have options open interest large enough relative to their float that dealer hedging creates measurable price effects. The Call Wall for TSLA, for example, can act as a ceiling for days or weeks during high-GEX periods. For smaller-cap names with thin options markets, GEX is less predictive — the raw dollar flows are not large enough to move the stock systematically.

The rule of thumb: the larger the options market relative to market cap and average daily volume, the more reliable GEX signals will be for that underlying.

Frequently Asked Questions

Who invented GEX?

SpotGamma coined the term GEX (Gamma Exposure) and developed the methodology for calculating and publishing it systematically. Before SpotGamma, dealer gamma positioning was discussed conceptually in academic literature and by quantitative analysts at banks, but it was not calculated, visualized, and made available to traders as a daily analytical tool. SpotGamma built the first platform to do that — and the GEX framework and terminology we developed have since become standard vocabulary across options markets.

What does negative GEX mean?

Negative GEX means that options market makers are net short gamma in aggregate — they have sold more options than they have bought (on a gamma-adjusted basis), putting them in a position where their hedging flows amplify price moves rather than damping them. In a negative GEX environment, dealers buy as the market rallies and sell as the market falls, adding fuel to moves in either direction. This is why negative GEX periods tend to produce higher realized volatility, larger intraday ranges, and more sustained trending behavior.

How often does GEX update?

SpotGamma calculates GEX using intraday options data and updates key metrics — including Net GEX, Call Wall, Put Wall, Gamma Flip, and Volatility Trigger — throughout the trading day in Equity Hub. The most significant changes occur overnight as new open interest data from the prior day's trading is incorporated into the morning calculation. GEX can shift meaningfully after large options expirations (particularly monthly OpEx), after large single-day moves in the underlying, and after significant changes in implied volatility.

What is Net GEX?

Net GEX is the sum of all call gamma exposure minus all put gamma exposure across every strike and expiration for a given underlying. It is the single number that tells you the aggregate dealer positioning regime. A positive Net GEX means dealers are collectively long gamma (stabilizing). A negative Net GEX means dealers are collectively short gamma (amplifying). We express it in dollar terms — the estimated dollar value of stock that dealers must transact per 1% move in the underlying.

What is the Gamma Flip?

The Gamma Flip is the price level at which net dealer gamma exposure transitions from positive to negative, or from negative to positive. Above the Gamma Flip, dealers are long gamma — their hedging stabilizes the market. Below it, dealers are short gamma — their hedging amplifies the market. The Gamma Flip is one of the most important levels we publish daily in Equity Hub because it defines which volatility regime the market is in at any given price. When the market is trading near the Gamma Flip, it is in the most sensitive zone — a small move can shift the entire dealer hedging dynamic.

Is GEX useful for predicting market direction?

GEX is not a directional predictor — it does not tell you whether the market will go up or down. It tells you how the market is likely to behave once it moves: whether moves will be absorbed and mean-revert (positive GEX) or sustain and accelerate (negative GEX). Think of GEX as a measure of market structure and volatility regime, not a buy or sell signal. Traders use it to calibrate strategy selection, size options premium risk, and identify key structural price levels — not to forecast direction.

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Explore SpotGamma's live GEX data, Call Wall, Put Wall, and Gamma Flip in Equity Hub — the tools that originated GEX analysis. → Equity Hub

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This article is for educational purposes only and does not constitute financial or investment advice. Options trading involves significant risk of loss. GEX data reflects calculated dealer positioning estimates based on available options market data and model assumptions — it is an analytical framework, not a guarantee of market behavior.