Gamma exposure (GEX) is a measure of the hedging pressure that options dealers must apply to the underlying market at each price level. This article explains how options create that pressure, how to identify three key levels from it, and how a presenter applies these levels within a four-step trading process. The presenter attributes a 100% one-month return to a competitor in the Robins World Cup trading competition. That result is reported as stated and was not independently verified.

Who Is Forced to Trade

Large market makers, also called dealers, are the counterparties to most options trades. Firms such as Citadel take the other side of retail and institutional orders so that trades can be filled.

Dealers do not seek directional risk. Their profit comes from the spread, the difference between the price charged for a contract and the cost of managing it.

Example: A dealer estimates the cost of handling a call option at $5.00 per share and sells it for$5.10. The 10-cent spread equals $10 per contract, because one contract covers 100 shares. Dealers collect this spread across millions of contracts daily, regardless of market direction.

Options Basics

• Call option: A payment made today for the right to buy at a locked price, called the strike, before a set deadline.
• Put option: The same right in reverse, the right to sell at the strike.

Illustration: A championship final ticket with a $200 face value is available for a$10 option premium. If the team wins its semifinal and the ticket trades at $2,000, the option holder gains substantially. If the team loses, the holder's loss is limited to the$10 premium. Every option buyer requires a seller, and dealers usually take that seller position.

Delta Hedging

Delta measures the approximate change in an option's price for a $1 move in the underlying market.

Worked example:

1. The market trades at $100. The call has a delta of 0.50.
2. The market rises to $101. The option gains roughly$0.50 per share.
3. One contract covers 100 shares, so a delta of 0.50 gives the call the exposure of about 50 shares for small moves.
4. The option buyer holds the equivalent of +50 shares. The dealer holds the opposite, −50 shares.
5. To become neutral, the dealer buys 50 shares. The net position is −50 + 50 = 0.

Delta changes as price moves. If the market rises from $100 to$105, the call's delta increases to 0.70.

1. At 0.70, the dealer's exposure is −70 shares.
2. The dealer still holds 50 shares, leaving a net position of −20.
3. To restore neutrality, the dealer buys 20 more shares.

The rising market forced the dealer to buy. This adjustment is the mechanism that links options to price action.

Gamma

Gamma measures how quickly delta changes as the underlying market moves. Delta measures sensitivity to price. Gamma measures how that sensitivity changes.

Dealer hedging behaves differently depending on the sign of dealer gamma:

The presenter stresses that positive gamma does not indicate a bullish market, and negative gamma does not indicate a bearish market. The sign describes how dealers respond to price, not the direction of price.

Gamma Exposure (GEX)

Real markets contain millions of contracts across many strikes. Summing the gamma of all open positions produces gamma exposure (GEX). GEX maps the price levels where dealer hedging pressure is concentrated.

When a large volume of calls accumulates at a single strike:

1. Price approaches the strike.
2. Dealers buy to hedge.
3. That buying pushes price closer to the strike.
4. Closer prices require more hedging.

This self-reinforcing sequence pulls price toward the strike. The presenter describes this process as a gamma squeeze.

According to the presenter, options expiring the same day have grown since 2022 to roughly 40% to 50% of total options volume. The presenter concludes that dealer hedging now drives intraday price action to a greater degree than before. This figure was presented without a cited source.

Three Key Levels

Hedging pressure concentrates at specific strikes. The presenter identifies three levels to mark on a chart each morning.

1. Call Wall

The strike with the largest concentration of call options. Dealer hedging at this strike creates a ceiling. When price reaches the call wall and reverses, dealers are trading against the move at that price.

2. Put Wall

The strike with the largest concentration of put options. Dealer hedging at this strike creates buying pressure and acts as a floor.

3. Gamma Flip

The price at which dealer gamma switches between positive and negative. This is the most important of the three levels.

• Above the flip (positive gamma): Dealers sell rallies and buy dips. Expected behavior includes slower moves, failed breakouts, and holding ranges.
• Below the flip (negative gamma): Dealers amplify price moves in both directions. Expected behavior includes faster moves, breakouts that extend, and sharp reversals.

Summary rule: Positive gamma indicates low volatility. Negative gamma indicates high volatility.

Marking these three levels before the open identifies where the market may stall, where it may bounce, and the likely volatility regime for the session.

Tools for Viewing Gamma Levels

The presenter names the following platforms:

• Tanuki Trade: A web-based gamma platform that plots the call wall, put wall, and gamma flip.
• Mumu: A broker application that displays the same three levels, with some features locked behind a paid tier.
• TradingView: The charting platform used to mark the levels as horizontal lines. The call wall sits above price, the put wall below, and the gamma flip between them.
• Deep Charts: An order flow platform that displays footprint charts. The presenter's trading partner, Chris, runs it alongside TradingView.

The Four-Step Strategy

The strategy was described as the method used by Chris Kamemer, a 26-year-old trader whom the presenter reports won the Robins World Cup with a 100% return in one month. The strategy combines four inputs:

• Market structure for the environment
• Gamma exposure for the volatility regime
• Volume profile for location
• Order flow for entry

All preparation is completed before the market opens.

Step 1: Environment

Use the 1-hour and 4-hour charts to determine whether the market is building value up, down, or sideways. Then check the gamma regime.

• Positive gamma: Expect failed breakouts and choppy, range-bound trading. The presenter identifies chop as the main cause of losses in retail accounts.
• Negative gamma: Expect faster, amplified moves.

Step 2: Location

Identify where to take trades using volume profile.

1. Place a volume profile on the current range. It shows the value area, where most trading occurred, and the point of control (the price with the highest traded volume).
2. Classify prices relative to the value area:
   • Above the value area: Premium. Do not buy here.
   • Below the value area: Discount. Wait for price to pull back into this zone.
3. In a value-up structure, wait for a pullback into discount.
4. Refine the zone with Fibonacci retracement drawn from the swing low to the swing high. The relevant levels are 70.5%, 78.6%, and 88.6%. The zone is valid only if it lies outside the value area.
5. The 88.6% level is the invalidation point. If price breaks below it before buyers regain control, the setup is invalid, and the trader does not participate.

Step 3: Confirmation

A marked zone does not guarantee a reaction. Confirmation requires evidence of a shift in control.

1. Price enters the discount zone.
2. The trader moves to the footprint chart on Deep Charts. Footprint candles show the number of contracts traded at each price, separated by bid and offer.
3. Read two components within the candle:
   • Volume profile inside the candle: Identifies where the largest volume traded.
   • Delta: Identifies whether sellers or buyers were aggressive.
4. Absorption is the condition where aggressive selling produces no further price decline. It indicates that a large buyer is absorbing sell orders. Absorption alone does not generate a signal, because it occurs throughout a chart.
5. The signal requires proof. The candle turns bullish. A subsequent pullback meets renewed selling, but sellers fail to push price lower.
6. On the footprint, buyers lift offers aggressively, and imbalances appear. The presenter sets the chart to highlight any imbalance above 400%.
7. A second failed sell attempt confirms that control has shifted to buyers. This is the entry.

The presenter explains that trapped short sellers below the entry must buy to exit, and that dealers in negative gamma buy into the same move. Both forces support the advance.

Step 4: Execution

• Stop-loss: Placed beyond the failed sellers. If price returns through the area the sellers lost, the setup is invalid.
• Target: Placed at the swing high, where resting orders tend to cluster.
• Trailing stop: Applied as price approaches a major gamma level, such as the call wall.

If confirmation does not appear, the trader does not enter. Location may be valid, but the absence of confirmation means no trade.

The presenter reports the following performance parameters for the system: a risk-to-reward ratio of 1.5R to 2R and a win rate of 60% to 65%. The presenter notes that the system does not rely on large outlier gains of 20R or more.

Worked Example

Step 1: Environment

The trader opens the gamma profile on Tanuki Trade. The market trades below the gamma flip, and net gamma is negative. Under this regime, moves are expected to extend, so the trader does not plan to fade extensions at the open. The trader marks the call wall, the gamma flip, and the put wall.

Step 2: Location

Session-level profile: The trader places volume profiles for regular and extended trading hours. The value area of each session moves lower from session to session, which indicates that the market is repricing downward. The trader therefore favors short scenarios and focuses on premium zones.

Five-minute structure:

1. The trader identifies the swing point that began the impulse and the swing point where it stopped.
2. Using the fixed-range volume profile tool in TradingView, the trader selects both swing points and extends the profile to the right.
3. The tool outputs the value area high, point of control, and value area low.
4. The trader applies Fibonacci retracement from the swing high to the swing low. Key levels are 50%, 62%, 70.5%, 78.6%, and 88.6%.
5. The 70.5% to 88.6% pocket defines the location. The 88.6% level is the invalidation point. If price moves above it and holds, short positions are cancelled.
6. Additional confluence comes from prior session value area highs and lows and the gamma map. A call wall inside the premium pocket strengthens the setup.

Step 3: Confirmation

• Overnight, price rises into the premium pocket.
• Shortly before the open, market structure breaks down, and price leaves the pocket.
• On the footprint chart, participation concentrates at the high of the candle. The point of control sits at the top, and delta shows aggressive buying.
• Price fails to advance. Passive sellers absorb the buying pressure.
• Sellers then take control and produce follow-through.

The setup is confirmed. The trader places a short stop above the failed buyers and waits for price to move down to the target.

Step 4: Non-Trade

If buyers instead maintain control with price rising and showing no signs of slowing, the trader does not enter. Context and location are present, but confirmation is absent. The presenter emphasizes that the entry represents only a small share of the trade process. Environment, location, and confirmation account for most of the work.

Backtesting

The presenter recommends testing any strategy across a large sample of trades before applying it to live capital. The presenter attributes a backtesting guide to the video, but the guide was not reviewed for this article.