Gamma Exposure Explained: How to See the Hidden Price Points Where Market Makers Move Stocks

Core Insights - Gamma exposure (GEX) significantly influences market volatility and the behavior of market makers in hedging positions [1][2][5] Group 1: Gamma Exposure - Gamma exposure measures how market makers adjust their hedges as prices change, impacting market stability [2] - Positive gamma leads to a stabilizing effect where dealers buy into weakness and sell into strength, acting like a shock absorber [3] - Negative gamma results in increased volatility, as dealers sell into selloffs and buy into rallies, creating a feedback loop that can amplify market movements [4] Group 2: Market Structure Tools - Put Walls and Call Walls are essential for understanding market structure, acting as invisible barriers that can influence price movements [6] - A Put Wall is characterized by a large concentration of put open interest, often serving as a support level due to hedging activities [6] - A Call Wall, with heavy call open interest, typically acts as a resistance level as dealers sell stock to maintain delta neutrality [6]