What is gamma in options?
Gamma measures how fast an option's delta changes as the stock price moves. For market makers who are short options, gamma creates a hedging problem: when the stock rises, their short call delta grows more negative, requiring them to buy shares to maintain delta neutrality. When the stock falls, they must sell shares. This forced buying and selling amplifies or dampens moves depending on overall positioning.
Gamma Exposure (GEX) explained
GEX aggregates the total gamma across all strikes and expirations for a given stock. Positive GEX means market makers are net long gamma — they buy dips and sell rips, dampening volatility. Negative GEX means they are short gamma — they chase moves, amplifying volatility. Understanding which regime you are in changes how you size and manage premium selling trades.
Gamma concentration and price pinning
Strikes with massive open interest create "gamma walls" — price levels where hedging flows are strongest. The highest-GEX strike often acts as a magnet: as the stock approaches it, market maker hedging pushes it back. This is why stocks sometimes pin at round numbers or high-OI strikes on expiration day. Premium sellers can exploit this by selling strikes near gamma walls.
Practical application for strike selection
Sell short strikes near positive gamma walls (support) and avoid strikes near negative gamma zones (breakout risk). The Put Wall — the strike with the highest put open interest — often acts as strong support. The Call Wall acts as resistance. Selling puts below the Put Wall or calls above the Call Wall means market maker hedging is working in your favor.
Gamma Exposure on VolRadar
Every ticker's Walls page shows net GEX (positive or negative regime), the GEX flip point, and how current price relates to the gamma landscape. Free users see the regime and flip level. Starter adds GEX trend history, daily OI change tracking, and volume/OI analysis for deeper positioning insights.