Positive gamma: the dampening market

The physics of the regime

Above the gamma flip, market makers are long gamma. Price rises, they sell; it falls, they buy. Their hedging is a spring that pulls price back toward the center of the zone, without ever taking a view on direction.

What you see in the book and the footprint:

• liquidity that reappears against the move, level after level, without any identifiable player posting it;
• impulses that run out of steam without news, with a footprint delta that fades as price moves away from the center;
• compressed daily ranges, short rotations, a VWAP that acts like a magnet;
• stop runs that have no follow-through: the stops get triggered, and price comes back, because the hedging buys the weakness that was just created.