Learn · Gamma regime
Gamma regime
The gamma regime is the sign of the estimated net gamma of option dealers: positive when their hedging tends to dampen price moves, negative when it tends to amplify them.
Positive and negative gamma
In negative gamma, dealer hedging tends to follow the move: the market tends to travel from one level to the next and the range tends to expand. In positive gamma, hedging tends to lean against the move and ranges tend to be narrower, more so when the regime is strong.
Positive gamma is not a pin. It damps moves; it does not hold price on a strike. Both descriptions are tendencies, not forecasts.
The regime can change
The gamma flip is the price where the regime changes sign, so the regime can change during the session as price crosses it or as the flip moves. A regime read at the open is a starting point. LiveGexLevels records how many times the regime flipped today and since when the current sign holds.
The premise of the day
At the open the regime also carries a premise for the session: calm; stress, when volatility is high or inverted and walls tend to hold less well than in a calm session; or panic, when nothing on the map can be relied on.
Which MCP tool returns it
get_gex_regime returns the sign and its strength, the flip and whether price is far from it, the GEX centre of mass and its recent drift, the walls and the flips of the day. get_level_changes reports a regime_flip event when the sign changes.
Questions and answers
Does positive gamma mean price will stay in a range?
No. It describes a tendency for moves to be damped. Price can still trend or break out in positive gamma.
Can the regime change during the day?
Yes, sometimes more than once. That is why the map reports the flips of the day and records a change event each time.
Is the gamma regime trading advice?
No. It describes estimated dealer positioning. It does not tell you what to buy or sell.
