What dealer gamma exposure actually is
How an options-chain model estimates dealer gamma and why the result is useful as context, not an observed position.
Options market makers often hedge some of the directional risk in their books. Gamma exposure models estimate how that hedge sensitivity could change as the underlying moves. The estimate is built from the available option chain; it does not reveal any dealer’s actual inventory or transactions.
Why dealers hedge at all
A position’s delta changes as price moves, so a dealer managing risk may adjust an underlying hedge. Whether that activity dampens or amplifies a move depends on the dealer’s actual long or short inventory, other positions, liquidity, and risk process. SteadyTrader uses a call-positive, put-negative sign convention as a modeling assumption, not a verified dealer book.
Walls, flip, and pressure
Strikes with larger modeled exposure can provide useful context around price. A wall marks a concentration under the model, while the gamma flip estimates where signed net exposure crosses zero. Neither is guaranteed support, resistance, pinning, or a change of regime. Treat the levels as one input alongside price, liquidity, news, and risk.