Convexity LabsWhat is gamma exposure (GEX)?
Gamma exposure (GEX) estimates how much the options dealers on the other side of the market will have to buy or sell of the underlying to stay hedged as its price moves. It is summed across every open option and usually quoted in dollars of hedging per 1% move. Where GEX is large and positive, hedging tends to dampen moves; where it is negative, hedging tends to amplify them.
Why dealers hedge at all
Market makers who sell options do not want to bet on direction, so they delta-hedge: they hold enough of the underlying to offset the option's sensitivity to price. That sensitivity is delta, and it changes as price moves. Gamma is how fast delta changes — so gamma tells you how much hedging a move forces. Multiply each contract's gamma by its open interest, its size and the square of the price, and you get the dollar hedging that contract implies. Add every contract up and you have the market's gamma exposure.
Positive gamma vs negative gamma
| Regime | How dealers hedge | What it tends to do to price |
|---|---|---|
| Positive GEX dealers long gamma | Sell into rallies, buy into dips | Dampens volatility; price tends to pin near large strikes |
| Negative GEX dealers short gamma | Buy into rallies, sell into dips | Amplifies moves; trends and squeezes run further |
The gamma flip
The gamma flip (or zero-gamma level) is the price at which estimated net dealer gamma changes sign. It is found by re-pricing the whole book at hypothetical spot prices and finding where total GEX crosses zero. Above the flip the market sits in the dampening regime; below it, the amplifying one. Traders watch how far price is from the flip because a move through it can change how the market behaves.
Gamma walls
Gamma walls are the individual strikes with the largest absolute gamma exposure. A large positive wall above price can act like resistance, because dealer hedging leans against moves into it; a large negative strike below can accelerate a move once price reaches it. Walls shift as open interest changes and as options approach expiry.
GEX in Bitcoin options
Most Bitcoin options trade on Deribit, which publishes open interest and implied volatility for every contract, so GEX can be estimated the same way as for equity index options. Three things differ: crypto trades 24/7, so there is no overnight gap for hedging to catch up in; Deribit options settle at 08:00 UTC and the largest weekly, monthly and quarterly expiries fall on Fridays, so gamma can fall away sharply at expiry; and perpetual futures and liquidations often move price more than options hedging does.
The assumption behind every GEX number
Open interest tells you how many contracts exist, not who is long them. Every GEX model therefore assumes a positioning. The common convention — used by Convexity Labs — treats dealers as long calls and short puts, because customers are assumed to sell calls for yield and buy puts for protection. When that assumption is wrong, the sign of GEX at those strikes is wrong too. The methodology explains how Convexity computes each number and where this bites.
Common questions
What is gamma exposure (GEX)?
Gamma exposure estimates how much the options market makers on the other side of the market will have to buy or sell of the underlying to stay hedged as price moves, summed over every open option and usually quoted in dollars per 1% move.
What does positive or negative GEX mean?
Positive GEX means dealers are estimated to be long gamma and hedge against moves, which tends to dampen volatility. Negative GEX means they are short gamma and hedge with moves, which tends to amplify them.
What is the gamma flip?
The price at which estimated net dealer gamma changes sign — the boundary between the dampening and the amplifying regime.
Does GEX work for Bitcoin?
Yes, with caveats. Deribit publishes the open interest it needs, but crypto trades around the clock and is heavily driven by leverage and liquidations, so GEX is one input rather than a forecast.
Is GEX a trading signal?
No. It is an estimate built on an assumption about positioning. It describes where hedging is likely to dampen or amplify moves; it does not predict direction on its own.
See it live
Convexity Labs computes GEX, the gamma flip and gamma walls for Bitcoin options continuously from live Deribit data. A daily snapshot is public at BTC GEX today; the full terminal adds order flow, regime detection and history.