What is gamma exposure (GEX)?

Gamma exposure, usually shortened to GEX, is an estimate of how much stock options market makers have to buy or sell to stay hedged as the underlying price moves. It is computed from the gamma of every listed option and the open interest at each strike, netted by strike and summed across the chain. Traders watch it because the hedging it describes is mechanical: when dealers are long gamma their hedging leans against price moves, and when they are short gamma it leans into them.

This page explains the metric as GEXStream computes it: the formula, the three strike levels that come out of it, what a positive or negative reading means, and how to read the chart. The compact reference for every metric is on the docs page.

Gamma, and why dealers care

An option's delta says how much its price moves for a one dollar move in the underlying; gamma says how fast that delta changes. A market maker who sells options earns the spread, not the direction, so the desk holds the book delta-neutral with shares, and gamma is what keeps breaking that neutrality. Long gamma means selling shares into a rally and buying them into a dip, which leans against the move. Short gamma means buying into a rally and selling into a dip, which adds to it. Summed across every dealer on a liquid name, that hedging is a real flow in the stock, and gamma exposure is the attempt to measure it from public data. The docs page walks through a worked example.

How gamma exposure is computed

GEXStream computes GEX from the live options chain in four steps, and the docs state the same four lines:

• GEX = Γ × OI × 100 for one contract: its gamma, times its open interest, times the 100 shares a contract controls.
• G(K) = Call GEX − Put GEX at one strike K: calls are netted against puts strike by strike.
• Net GEX = Σ G(K): the signed total for the whole chain, one number.
• GEX Ratio = Σ positive G(K) / Σ |G(K)|: the share of total absolute gamma sitting on the strikes that came out positive. It always falls between 0 and 1, with 0.5 as the neutral point.

The sign convention is the standard one, and it rests on an assumption. Calls count as positive dealer gamma and puts as negative because, on balance, customers sell calls against stock and buy puts for protection, leaving dealers long the calls and short the puts. That describes the typical book, not any dealer's actual position; where the flow runs the other way, a strike's sign can be wrong even though its size is right. The options tape and the net flow metrics show which side the day's trading is actually on.

Gamma depends on implied volatility, time to expiration and distance from the current price, so GEX is not a fixed number for the day: GEXStream recomputes it every second during the session. Open interest, the other input, is settled once a night by the clearing house and does not change intraday. The exposure chart shows strikes within 15 percent of the current price, which covers the gamma that can matter for the session; open interest walls are drawn out to 20 percent.

The three GEX levels: max, zero and min gamma

Three strikes fall out of the per-strike series, and they are the levels traders plot beside price.

• Max gamma is the strike with the largest positive G(K): the heaviest concentration of dealer long gamma, where hedging most strongly leans against price. Price tends to pin near it, especially into expiration.
• Min gamma is the strike with the most negative G(K): the heaviest concentration of dealer short gamma, where hedging most strongly leans into price. Moves through it tend to extend.
• Zero gamma, also called the gamma flip, is the price at which the per-strike series crosses from negative to positive. GEXStream looks for it between the min and max gamma strikes and interpolates between the two listed strikes on either side of the crossing, so the level is a price, not necessarily a listed strike. When the series crosses zero more than once, the steepest crossing is used, because that is the one that most changes the hedging regime; if there is no crossing, the midpoint of the min and max strikes stands in.

Max and min gamma read as a magnet and an accelerant; zero gamma reads as the session's pivot, with dealer hedging dampening above it and amplifying below it. On the dashboard the levels follow whichever expirations you have selected. On the Intraday page and in the screener they are computed on the nearest listed expiration, where most of the day's gamma sits, and the Intraday chart draws them through the session beside price.

Positive and negative gamma regimes

The GEX Ratio turns the whole chain into one reading on a fixed scale. Above 0.5 the positive strikes carry most of the gamma: dealers are net long, they sell rallies and buy dips, and intraday ranges tend to compress. Below 0.5 the negative strikes dominate: dealers are net short, hedging adds to each move, and ranges tend to expand. Because the ratio is a share rather than an amount, 0.4 means the same thing on a small-cap stock as on SPX, which is what makes it a usable screening threshold across the whole market.

Net GEX carries the size the ratio leaves out: a ratio of 0.7 on a thin chain is a weaker statement than 0.6 on a chain carrying many times the gamma, so read the ratio for the regime and Net GEX for how much hedging is behind it. Regimes also shift on a calendar. A large share of open interest expires on the monthly and weekly dates, and the strikes that held the market in place drop out of the chain with it, which is one reason volatility clusters around expiration. The history charts keep Net GEX and the GEX Ratio hourly for weeks at a time.

Reading a GEX chart

A GEX chart lays strikes out on one axis and G(K) on the other: positive bars where call gamma outweighs put gamma, negative bars the reverse. Look for the largest bar on each side (max and min gamma), the point where the bars change sign (zero gamma), and where the current price sits relative to all three. Price above a wall of positive gamma with zero gamma well below is a dampened tape; price below zero gamma with the big negative bars close by is one that can run. Open interest walls add a second dimension: a strike with large open interest and large positive gamma is the strongest kind of level, while a large open interest strike far out of the money with little gamma is mostly a record of where positions were opened.

GEX by volume, and the heatmap

Open interest tells you about positions built up over days and weeks, and nothing about today. vGEX applies the same math to the session's traded volume, vGEX = Γ × Volume × 100, netted by strike the same way. When it agrees with GEX, the day's trading is reinforcing the installed structure; when it diverges, a level is being repriced before open interest catches up overnight. A single expiration is also one slice: the heatmaps lay out strike against expiration, so you can see whether a wall sits in this week's contracts or is spread across the next quarter.

What gamma exposure does not tell you

• It is not a forecast of direction. It describes how hedging will respond to a move, not which way the move will go.
• Its sign rests on the dealer-position convention above. Where customers are net long calls or net short puts, a strike's sign is inverted.
• Open interest is yesterday's. Positions opened today show up in volume, and so in vGEX, but not in GEX until the next session.
• Dealers are not the only hedgers, and not every option is hedged in the underlying. GEX measures the part of the book that public data can see.
• A level is only as strong as the gamma behind it. Check Net GEX, not just the ratio, before treating a reading as decisive.

Where to see it on GEXStream

The dashboard shows GEX by strike for one ticker, redrawn every second, with the three levels and the open interest walls. The Intraday page charts the levels through the session, the heatmaps add the expiration axis, the Pulse screener ranks S&P 500 stocks, ETFs and indices by GEX Ratio and Net GEX, and alerts email you when a reading crosses a threshold or a z-score band. Which plans include each is stated on the feature pages.