Definition · updated 2026-10-21
Gamma
Gamma is how fast delta changes for a $1 move in the underlying. It is largest at the money and near expiration, which is why same-day options behave explosively, and it is the quantity dealers must hedge: aggregate gamma across the chain is gamma exposure, the map of where hedging will push or pin price.
See it live: today's GEX levels by ticker.
For a position
Long options have positive gamma: the position gets longer as price rises and shorter as it falls, which is pleasant and costs theta. Short options have negative gamma: the position fights you, which is why short premium needs defined risk or discipline.
For the market
Dealers sold most of the gamma the public owns. Where that gamma sits by strike, signed by call and put, is the GEX profile; its sign tells you whether dealer hedging damps or amplifies moves today.
Frequently asked questions
- Is high gamma good or bad?
- Good for a long option that is about to move, bad for a short one. For the market, high positive dealer gamma means a quiet, pinned tape; high negative dealer gamma means trends and air pockets.
- What is the difference between gamma and GEX?
- Gamma is one contract's sensitivity. GEX is gamma × open interest × 100 × spot² × 1% summed across the chain with calls positive and puts negative: the dealers' total hedging obligation.