Options flow and GEX: reading SPX context to trade ES and NQ
The closing pin and the wicks that carry no information
The pin mechanism
In the last hour, 0DTE gamma concentrates on the strikes closest to price. For market makers long gamma on those strikes, every move away imposes an opposite hedge that grows per point: above the strike they sell, below they buy. Price ends up pinned around the strike, in a tight back and forth.
That is pinning. It does not happen every day, and it does not happen at any strike: it takes a large 0DTE open interest at the money and no outside directional flow. But when it happens, it produces an hour of noise that your book reads as a battle, when it is a pendulum.
The rest of this lesson is for students
- The wicks that carry no information
- The unwind at the bell
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