Dealer gamma
TradingDefinition
The aggregate delta-hedging exposure of options market makers. When dealers are "long gamma" (typically because customers bought puts), they sell into rallies and buy into dips, dampening volatility. When "short gamma" (customers selling vol), the opposite — dealer hedging amplifies moves.
SpotGamma and similar services estimate market-wide dealer gamma. The "gamma flip" zone — where aggregate dealer position transitions from long to short gamma — has become a key technical level.
SpotGamma and similar services estimate market-wide dealer gamma. The "gamma flip" zone — where aggregate dealer position transitions from long to short gamma — has become a key technical level.