Gamma flip

What it is

The Gamma Flip is the price at which aggregate market maker gamma exposure switches from positive (stabilizing) to negative (amplifying). It is the most important level on the GEX chart.

Above it, dealer hedging dampens moves. Below it, dealer hedging amplifies them.

What happens at the flip

Above the Gamma Flip (Positive GEX): Market makers are long gamma. When price drops, they buy the underlying to hedge. When price rises, they sell. This creates a self-correcting force — price gets pinned, ranges compress, realized volatility falls.

Below the Gamma Flip (Negative GEX): Market makers are short gamma. When price drops, they must sell more to hedge — accelerating the move. When price rises, they buy more. Moves extend further and faster than expected.

How traders use it

The gamma flip is a regime boundary, not a direction signal and not a sizing rule. Which side price sits on tells you how dealers are hedging around it — it does not tell you which way price goes next, and we could not detect any edge in trading it that way.

Read it as a description of the hedging mechanism, not a forecast. Above the flip, dealer hedging leans against moves; below it, it leans with them. That is what the positioning implies — it is not a promise about how big the day turns out to be, and when we checked, which side of the flip price sat on did not beat a plain look at the recent trading range at predicting the day's range.

So: take your direction from somewhere else — flow, trend, a catalyst — and use the flip to know which mechanism is operating around you, not to pick a side or to size a position.