# Gamma exposure and gamma squeezes

Canonical: https://halfonadouble.com/learn/gamma-exposure
Data through: 2026-10-02 close
Publisher: Half on a Double

## Gamma, in one paragraph

An option's delta is how much its price moves per dollar move in the
underlying. Gamma is how fast that delta changes. A market maker who has
sold an option must hold a position in the stock equal to the option's
delta to be hedged; because gamma changes the delta as the stock moves, the
hedge has to be adjusted constantly. Those adjustments are real buying and
selling in the underlying, and across a large chain they are big.

## Gamma exposure (GEX)

Gamma exposure aggregates that effect for a whole chain. The common
definition is

    GEX = Σ gamma × open interest × 100 × spot

summed over contracts, with calls counted positive and puts negative (the
convention assumes dealers are long the calls customers sold and short the
puts customers bought, which is a simplification). The sign tells you how
hedging behaves:

- **Positive (long) gamma**: dealers sell into rallies and buy dips. Moves
  are damped; the stock tends to mean-revert intraday.
- **Negative (short) gamma**: dealers buy into rallies and sell dips.
  Moves are amplified.

The **gamma flip** or **zero-gamma level** is the price where aggregate
gamma changes sign. Above it the market is usually in the damped regime,
below it in the amplified one, which is why the level is watched as a line
between calm and volatile trading. **Call walls** and **put walls** are the
strikes with the largest positive and negative gamma, often cited as
resistance and support.

## Gamma squeeze

A gamma squeeze is the amplified regime run to an extreme: heavy call
buying forces dealers to buy stock to hedge, the stock rises, the calls'
deltas rise, dealers buy more, and so on. It ends when the buying stops or
the calls are sold, at which point the hedges unwind just as fast. The
GameStop episode in early 2021 is the usual example.

## How this relates to the levels on this site

This site computes two related prices from the same summed-greeks idea:
[gamma max](/learn/gamma-max), the underlying price where the chain's
summed gamma is largest (the peak of the exposure curve, not its zero), and
the gamma neutral price, where the summed gamma is zero, which is the same
idea as the gamma flip. Both use every expiry and the implied volatility of
each contract. Ticker pages publish net GEX, confirmed GEX flip, and the call
and put wall strikes. The [GEX extremes screen](/screens/gex-extremes)
normalizes exposure to 100,000 open contracts before comparing tickers. These
are model outputs under the stated sign convention, not observations of actual
dealer positions or guarantees of support, resistance, damping or amplification.

## Related

[Gamma max](/learn/gamma-max) · [Open interest](/learn/open-interest) · [Methodology](/methodology)