Glossary

Gamma exposure (GEX)

Gamma exposure (GEX) estimates how much options dealers must buy or sell in the underlying asset to stay hedged when the price moves.

Gamma measures how fast an option delta changes when the price of the underlying asset changes. Dealers who sell options hold hedges in the underlying asset. When the price moves, they must adjust the hedge. Gamma exposure (GEX) adds up this effect over all open option contracts.

The usual reading splits the result into two cases. With positive dealer gamma, hedging trades go against the price move and tend to damp volatility. With negative dealer gamma, hedging trades go with the price move and can amplify it. The sign of the total is the key output.

GEX is a model output, not a measured fact. Public data shows open interest by strike, but it does not show which side dealers hold. Providers must assume the positions of dealers. Different assumptions give different results. Use GEX as context for volatility, not as a forecast of direction.