Gamma Exposure (GEX)
Also called: gex
A measure of how much options dealers must buy or sell to stay hedged as the market moves.
Market makers who sell options hedge their risk by trading the underlying. Gamma exposure estimates how much they must buy or sell as prices move. When dealers are "long gamma," their hedging dampens moves (calmer market); when "short gamma," their hedging amplifies moves (faster, choppier market). Big open-interest strikes create "call walls" and "put walls" that can act as short-term magnets or resistance.
For example
If a huge block of open interest sits at SPX 5,500, price can get pinned near there into expiration as dealers hedge around that "wall."
Related terms
Back to the full glossary · Educational content only, not investment advice.