Reading 7: the gamma map

Market makers sell or buy SPX options to clients. They do not bet on direction: they neutralize their risk by buying or selling ES futures, and they have to readjust that hedge every time price moves. Gamma measures the size of that readjustment, and DeepGamma's gamma map draws it strike by strike. This reading gives the mechanics in ten lines, then the three columns, the six strike profiles, and what the regime changes for the setups.

The mechanics

• Long gamma (they bought options): they sell when price rises and buy when it falls. Their hedging brakes the market, which oscillates and comes back toward its levels.
• Short gamma (they sold options): they buy the rally and sell the decline. Their hedging amplifies the move, and breakouts run.
• GEX puts a dollar figure on that gamma, strike by strike. A positive bar is a brake or a magnet; a negative bar an accelerator or a pivot.
• Zero Gamma is the price where total GEX changes sign. Above it, long gamma regime; below it, short gamma regime.