SPX Plays
Options Trading 101
Master the fundamentals before diving into GEX
Understand Where Price Moves Fast vs. Where It Gets Stuck
This guide breaks down GEX in plain English so you can use it to improve your trades.
GEX (Gamma Exposure) measures the total gamma held by market makers at each strike price. Think of this chart as showing you where price moves freely vs. where it gets stuck.
Imagine price is a ball rolling on a surface. GEX shows you where the surface is smooth (ball rolls fast) vs. where there's friction (ball slows down). You want to know what's ahead before the ball gets there.
Market makers (the big players who provide liquidity) must hedge their options positions. This hedging creates mechanical flows that influence price action:
When there's a lot of options positioning at a strike, market makers must actively buy/sell shares to hedge. This creates friction that slows price down.
When there's minimal positioning, market makers don't need to hedge much. Price can move quickly with less resistance.
GEX isn't magic—it's showing you where the order flow from hedging will create natural support, resistance, or acceleration zones.
GEX is based on options open interest. For 0DTE trading, the current day's gamma levels are most relevant as contracts expire.
Red bars = price gets slowed down
Green bars = price can move faster
A GEX chart displays gamma exposure at each strike price. Here's how to interpret what you're seeing:
Example 0DTE GEX chart for SPX showing red (negative) and green (positive) gamma bars
The vertical axis shows SPX strike prices. Find where current price is, then look above and below to see what's waiting.
The horizontal axis shows the size of gamma exposure (in millions). Bigger bars = more hedging activity = more impact on price.
Focus on the clusters of large bars near current price. Distant strikes matter less for intraday trading.
A liquidity shelf is a price zone with significant negative gamma (big red bars). This is where market makers have heavy options positioning that requires active hedging.
Heavy options positioning at these strikes means market makers must hedge aggressively. This creates "friction" that resists price movement.
If price is approaching a liquidity shelf with momentum, expect it to stall or reverse—even if the move looked strong. Great for taking profits or fading moves.
If price is running toward a liquidity shelf and you're not already in the trade, don't chase. Wait for the reaction, then look for the next setup.
A gamma pocket is a price zone with minimal positioning (green bars or gaps in the chart). This is where market makers don't need to hedge much—so price can move fast.
Little to no options positioning means no hedging friction. Once price enters this zone, there's nothing slowing it down—moves can happen fast.
If price breaks into a gamma pocket, expect expansion—not mean reversion. Let winners run through pockets and don't take quick profits.
When price breaks through a liquidity shelf and enters a gamma pocket below, that's when puts can really move. The opposite works for calls breaking through support into a pocket above.
We don't trade just because of GEX. We trade from levels and use GEX to understand where price is likely to accelerate or get stuck.
GEX is a context tool, not a signal generator. Here's how to incorporate it into your process:
Start with your technical analysis—support, resistance, VWAP, moving averages, prior highs/lows. These are your trade levels.
Check the GEX chart to see what's at and around your levels:
Liquidity shelves → expect reactions or chop
Gamma pockets → expect speed and expansion
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Let's break down actual GEX charts so you can see these concepts in action:
Heavy negative gamma (red) creates "walls" while positive gamma or gaps (green) create "runways." Plan your trades accordingly—take profits at walls, let winners run through runways.
Industry standard for GEX data with detailed SPX and SPY gamma exposure analysis. Premium subscription.
Free gamma exposure data and visualizations. Good starting point for learning.
Gamma levels and dealer positioning data with educational content.
We post daily GEX analysis in our free Discord with premium commentary for members.
Our free guide on options fundamentals, Greeks, and how gamma works at the contract level.
Trading psychology guide for managing emotions when trades don't go your way.
GEX (Gamma Exposure) measures the total gamma held by market makers at each strike price. It shows where dealers need to hedge their options positions, which directly impacts how price moves at different levels.
Red bars (negative gamma) indicate liquidity shelves where price tends to slow down, chop, or reverse. These are high-hedging zones where market makers need to actively manage their positions.
Green bars (positive gamma) indicate gamma pockets where price can move quickly with minimal resistance. These low-hedging zones allow for faster, more directional moves.
No. GEX is a context tool, not a trade signal. Use GEX to understand WHERE price is likely to accelerate or stall, then combine it with your technical levels and trade setups for entries.
A liquidity shelf is a price zone with significant red bars (negative gamma) where heavy options positioning requires market maker hedging. Price tends to stall, chop sideways, or reject at these levels.
A gamma pocket is a price zone with low or positive gamma (green bars or gaps in the chart) where little hedging is required. Once price enters these zones, moves can happen fast and extend quickly.
GEX data typically updates daily based on options open interest and positioning. For 0DTE trading, pay special attention to the current day's gamma levels as they're most relevant.
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