Option dealers (market makers and big option sellers) hedge their positions by buying or selling the index or its futures. Gamma exposure (GEX) estimates how much of that hedging a 1% move in the index would set off, strike by strike.
How it is worked out
For each strike: gamma × open interest × index price² × 1%, in ₹ crore. The usual assumption is that dealers hold the other side of what traders buy: they are long the calls (counted +) and short the puts (counted −). Adding every strike gives the net gamma exposure.
Positive or negative
- Positive net GEX: dealers sell when the index rises and buy when it falls. Their hedging works against the move, so the index often stays in a range and moves calmly.
- Negative net GEX: dealers sell when it falls and buy when it rises. Their hedging adds to the move, so swings can be larger and faster.
The levels on the page
- Call wall: the strike with the most call gamma. It often acts as resistance.
- Put wall: the strike with the most put gamma. It often acts as support.
- Zero-gamma level: where the running total of gamma exposure changes sign. Above it the market tends to be calmer; below it, more volatile.
GEX is an estimate built on an assumption about who holds which side. In India many option sellers are traders, not dealers, so treat it as one more view of the option chain, alongside open interest, PCR and max pain, not as a signal on its own.