Gamma Lens (REGIME) free tool

GammaLens Overview: How to Read Every Indicator

GammaLens gives traders a real-time view of dealer positioning, hedging pressure, and volatility conditions. Understanding each indicator helps you anticipate whether SPY is likely to trend, chop, reverse, or expand. This guide explains every major element on the SPY GammaLens dashboard and how to use it in your trading.

It's similiar to Weather forcasting for gauging the market

1. Gamma Regime

GammaLens classifies the market as either Positive Gamma or Negative Gamma. When SPY is in Negative Gamma, dealers hedge with price, which amplifies movement and increases volatility.

  • Negative Gamma: Breakouts run, breakdowns accelerate, volatility expands, trend days more likely.
  • Positive Gamma: Breakouts fail, price mean-reverts, volatility compresses, chop is common.

In negative gamma, traders should avoid fading strong moves and instead look for continuation and expansion.

2. Spot Price

The live SPY price (e.g., $736.07) is the anchor for the entire dashboard. All distances, flows, and compression readings are calculated relative to spot. Where spot sits versus key levels determines whether price is trapped or free to trend.

3. Key Levels: Put Wall, Call Wall, Gamma Flip

  • Put Wall (e.g., $730): Largest put open interest. Acts as major support. A break below forces dealers to sell aggressively.
  • Call Wall (e.g., $736): Largest call open interest. Acts as major resistance. A break above forces dealers to buy aggressively.
  • Gamma Flip (e.g., $684): Level where the market would switch from negative to positive gamma. Distance from flip shows how strong the current regime is.

When spot is between the Put Wall and Call Wall, price is inside a “trap zone” defined by dealer positioning.

4. Net GEX (Gamma Exposure)

Net GEX measures the total gamma exposure of options dealers. It tells you how dealers hedge and how volatile the market is likely to be. A strongly negative value means dealers hedge with price, which increases volatility and creates stronger directional moves. A strongly positive value means dealers hedge against price, which dampens volatility and encourages mean reversion.

GammaLens displays Net GEX as a raw number (for example, -2.47B), but it does not include a gauge like the Gamma Compression meter. Even without a visual gauge, Net GEX naturally behaves like a volatility indicator. The more negative the number, the more unstable and explosive the market becomes. The more positive the number, the more controlled and pinned price action becomes.

Net GEX Volatility Scale

  • +1B or higher: Strong positive gamma, low volatility, mean reversion.
  • +250M to +1B: Moderate positive gamma, controlled movement.
  • -250M to +250M: Neutral zone, unstable regime, whipsaws possible.
  • -250M to -1B: Negative gamma, volatility expands, trending behavior.
  • -1B or lower: Strong negative gamma, explosive moves, large swings.

In simple terms: Gamma Compression tells you how trapped price is. Net GEX tells you how violent the move will be once it escapes.

5. Delta Exposure (DEX)

DEX (e.g., 9.2M) shows the net directional exposure of dealers. It reflects how much dealers are effectively long or short the underlying. While useful context, DEX is secondary to GEX: in a negative gamma environment, even a modest directional tilt can still produce large moves because hedging follows price.

6. Dealer Flow (Forced Hedging per $1 Move)

Dealer flow shows how much dealers must buy or sell for each $1 move in SPY, above or below key levels.

  • Above a level (e.g., above $736): Dealers may need to sell a certain notional amount (e.g., $354.6M) per $1 move.
  • Below a level (e.g., below $730): Dealers may need to sell a much larger amount (e.g., $2.99B) per $1 move.

The asymmetry between upside and downside flow tells you which direction will expand harder. If downside flow is many times larger than upside, breaks below support can be violent.

7. Trap Zone (High-Gamma Compression Band)

The area between the Put Wall and Call Wall (e.g., $730–$736) is often labeled as a High-Gamma Compression Band. Inside this zone, dealer hedging flows can partially offset each other, causing price to stall, churn, or “grind” until a wall breaks.

Traders can expect more controlled movement inside the band and sharper acceleration once price escapes it.

8. Gamma Compression (%)

Gamma compression (e.g., 51.4%) measures how tightly price is being pinned between the Put Wall and Call Wall.

  • 0–20%: Low compression, price can move freely.
  • 20–50%: Moderate compression, moves begin to slow.
  • 50–80%: High compression, price is increasingly pinned.
  • 80–100%: Maximum compression, often precedes a breakout.

At moderate to high compression, traders can watch for sweep → reclaim → expansion patterns as price tests the edges of the band.

9. Headroom & Floor

Headroom and floor show how far spot is from the Call Wall and Put Wall, respectively, usually in percentage terms.

  • Headroom: Distance to the Call Wall (e.g., +0.0% means spot is sitting on resistance).
  • Floor: Distance to the Put Wall (e.g., -0.8% means support is very close below).

Small headroom and floor values indicate a tight range where dealer hedging pressure is concentrated, reinforcing the trap zone.

10. ATR & Expected Move

GammaLens also shows the daily Average True Range (ATR) and expected move (e.g., $7.59 ATR and 1.0% expected move). These values provide a baseline for how far SPY can reasonably travel in a day. Traders can use this to size stops, set targets, and judge whether a breakout has room to run.

11. GEX by Strike Chart

The GEX by strike chart visualizes where gamma is concentrated across the options chain. It highlights:

  • The Put Wall and Call Wall.
  • The Gamma Flip level.
  • The current spot price.

This chart helps traders see where hedging pressure will increase or decrease as price moves, and where volatility pockets are likely to appear.

12. Strike Table (Options Detail)

The strike table lists individual strikes with their gamma, delta, and open interest. It shows where liquidity clusters and how positioning shifts intraday. Traders can use it to confirm the strength of walls and to see if new zones of interest are forming.

GammaLens Trader Cheat Sheet

This cheat sheet provides a fast, trader-focused way to interpret GammaLens data and apply it directly to intraday decision-making.

1. Gamma Regime

Negative Gamma – Volatility & Expansion

  • Dealers hedge with price.
  • Breakdowns accelerate.
  • Breakouts run.
  • Trend days more likely.

Mindset: Trade continuation, expect overshoots, look for SRE expansions.

Positive Gamma – Compression & Mean Reversion

  • Dealers hedge against price.
  • Breakouts fail.
  • VWAP magnet behavior.
  • Choppy, pinned markets.

Mindset: Fade extremes, expect chop, avoid breakout trades.

2. Put Wall (Support)

  • Largest put open interest.
  • Dealers defend this level aggressively.
  • Sweeps into it often create long setups.

Break below: Forced dealer selling → fast downside expansion.

3. Call Wall (Resistance)

  • Largest call open interest.
  • Acts as major resistance.
  • Sweeps into it often create short setups.

Break above: Dealer buy hedging → strong upside expansion.

4. Gamma Flip

  • Above flip → negative gamma dominates.
  • Below flip → positive gamma dominates.
  • Distance from flip = volatility expectation.

5. Net GEX (Gamma Exposure)

  • Negative GEX: Volatility expands, trending behavior.
  • Positive GEX: Volatility compresses, mean reversion.

6. Dealer Flow (Forced Hedging)

This is the most actionable number on GammaLens.

  • Above spot → dealer buy flow.
  • Below spot → dealer sell flow.
  • Asymmetry determines which direction expands harder.

Example: If downside flow is larger, breakdowns accelerate. If upside flow is larger, breakouts run.

7. Gamma Compression (%)

  • 0–20%: Free movement.
  • 20–50%: Slowing.
  • 50–80%: Pinned.
  • 80–100%: Max compression → breakout coming.

Application: High compression favors sweep → reclaim → expansion setups.

8. Headroom & Floor

  • Headroom: Distance to Call Wall.
  • Floor: Distance to Put Wall.

Shows where the next expansion can realistically go.

9. Expected Move / ATR

  • High ATR → trend day potential.
  • Low ATR → chop day potential.

How This Integrates With SRE Trading

Negative Gamma + Near Put Wall

Sweep → Reclaim → Retest → Expansion. Strong long setups.

Negative Gamma + Near Call Wall

Rejection → Expansion Down. Strong short setups.

Positive Gamma + Inside Walls

Failed breakouts, mean reversion, chop.

Compression Above 60%

Expect a sweep → reclaim → expansion sequence.

Morning Checklist

  • Gamma Regime: Positive or Negative?
  • Spot vs Put Wall: Above or below?
  • Spot vs Call Wall: Above or below?
  • Dealer Flow: Which side is heavier?
  • Compression: Pinned or free?
  • Flip Distance: Stable or unstable regime?
  • Expected Move: Trend or chop?

This gives you the entire day’s bias in seconds.

Summary

This GammaLens dashboard shows how options dealer positioning shapes volatility, direction, and risk. Negative gamma increases volatility and makes trend moves more likely. Net GEX reveals how violent those moves can be. Compression shows how trapped price is between major walls. Dealer flow shows which direction will expand harder. Together, these indicators give traders a complete map of the market’s intraday behavior.

Practical Market Education for Everyday Traders — The Stock Joe

💬 Any questions?

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