Gamma flip explained

The gamma flip is the spot price at which total dealer gamma exposure crosses zero — below it, dealers are net short gamma and the market is in an amplifying regime; above it, dealers are net long gamma and hedging dampens moves. Crossing it is one of the few regime changes you can read directly off positioning, before realized volatility tells you anything.

How the flip happens

Recall: dealers are usually short the call wing (retail buys calls) and short the put wing (retail buys puts), but the gamma profile of those positions varies sharply with strike and moneyness. Near-the-money short calls dominate when price sits inside the call cluster; near-the-money short puts dominate when price sits inside the put cluster.

GEX per strike adds those exposures together. Strikes deep OTM contribute little (low gamma); strikes near spot contribute the most. As spot moves, the sum tilts. The point where the running sum crosses from negative (net short gamma) to positive (net long gamma) is the flip.

What changes when you cross it

Below the flip — short-gamma regime. Dealers hedge with trend: rising prices force them to buy more underlying (pushing further up), falling prices force them to sell (pushing further down). Realized vol tends to be higher than implied; intraday ranges widen; small catalysts get magnified.

Above the flip — long-gamma regime. Dealers hedge against trend: rallies sell flow, dips buy flow. Vol gets compressed even when there's news to trade. Ranges feel sticky.

The cleanest tell: spot drifting toward and then through the flip on a calm-tape day often precedes a volatility regime change rather than a price trend. If you see flip-crossing during NY hours on a Tuesday, the next 24-48 hours usually feel structurally different.

Reading it on the dashboard

The dashboard shows the gamma flip strike as a dashed marker above the GEX strike-bar chart. Compare it with spot (the solid blue line). Spot above flip = long gamma regime active; spot below = short gamma regime active. Distance matters: 1% above with vol-of-vol low is "stuck in long gamma"; 2% below with vol-of-vol high is "the amplifier is on".

The timeline view tracks how the flip itself has moved over the last 7 days — if it's climbing while spot drifts sideways, dealers are accumulating short calls (positioning is getting more amplifying with each tick).

The timeline background is tinted by regime: green wherever spot was above γ-flip in that window (long-γ regime), red wherever it was below (short-γ). Crossings of those bands are the regime changes — they almost always precede a structural shift in realized vol.

Caveats

• The flip is IV-dependent. A vol spike rescales every strike's gamma and can shift the flip by a few percent without any OI changing hands.
• It's an expiry-by-expiry concept. The dashboard aggregates across the selected expiry — switch expiries to see how the flip is distributed in time.
• "Below the flip" doesn't predict direction. It predicts amplification of whatever direction news pushes.