# Gamma exposure (GEX)

What dealer positioning is and why it moves price.

Options dealers (market makers) take the other side of what customers buy and
sell, then hedge the risk in the underlying. How much they must buy or sell as
price moves depends on the **gamma** of the options they hold. Added up strike
by strike, that is **gamma exposure**, or GEX.

GEX is quoted in dollars: roughly, how much hedging a 1% move would trigger.

## Why it matters

- Where dealers are **long gamma**, their hedging trades against the move:
  they sell rallies and buy dips. That damps volatility.
- Where dealers are **short gamma**, their hedging trades with the move. That
  speeds price up.

So the same chart can behave very differently depending on which side of the
book price is sitting in. That is the idea behind every level in q-bitf.

## The other exposures

| Exposure | What it shows |
|---|---|
| **GEX** (gamma) | Hedging per move in price. The basis of walls and the flip. |
| **DEX** (delta) | How much dealers are already hedged long or short at each strike. |
| **Vanna** | How hedging changes when implied volatility moves. |
| **Charm** | How hedging drifts as time passes, strongest into expiry. |
| **Convexity** | Where moves tend to speed up or stall. |

## The assumption behind it

Gamma exposure depends on which side of each trade dealers hold. q-bitf uses
the standard convention for index options, and labels readings where that
convention is weaker, such as single stocks. Treat levels as zones, not exact
prices.

How the books differ across indexes and ETFs is in
[SPX, SPY and QQQ GEX](https://q-bitf.com/docs/concepts/spx-spy-qqq-gex). For a longer, public
explainer see [GEX levels explained](https://q-bitf.com/gex-levels).

## Questions

### What is gamma exposure (GEX)?

An estimate of how much options dealers must buy or sell in the underlying as price moves, added up strike by strike. It shows where hedging is likely to damp or amplify moves.

### What does positive GEX mean?

Dealers are long gamma, so their hedging trades against the move. Markets tend to range and walls hold more often.

### What does negative GEX mean?

Dealers are short gamma, so their hedging trades with the move. Markets tend to trend and ranges widen.