Net Gamma Exposure

Net gamma exposure is the single aggregate figure produced by combining call-side and put-side gamma exposure, with their respective sign conventions, across every strike and expiration into one number. It is the headline figure typically quoted for 'the market's GEX today' - positive or negative, in dollars per one-percent move - distinct from the per-strike profile that shows where that exposure actually concentrates.

By convention, call open interest and put open interest are presumed to sit on opposite sides of the dealer book, so their gamma contributions carry opposite signs before being summed. That opposite-signing is what makes the result 'net': it is not simply the total gamma on the chain, it is calls netted against puts under an assumption about which side dealers hold. The call-and-put opposite-signing described here is the simplified per-strike variant; the flow-signed dealer estimate described on the methodology page refines it when order-flow information is available.

The single net figure is useful precisely because it compresses a complicated, per-strike picture into one comparable number: positive net gamma is read as the dampening regime, negative as the amplifying one. The qualitative long-gamma-versus-short-gamma read of that sign is covered on the dealer gamma positioning page; net gamma exposure is the specific aggregate number that reading is based on.

The net figure also relates directly to the zero-gamma flip: the flip is, by definition, the underlying price at which the net gamma exposure calculation would come out to zero. Knowing today's net figure and its sign is effectively a statement about where the market sits relative to that boundary.

A single net number can mask real structure underneath it. Two very different per-strike profiles - one smoothly distributed, one dominated by a single enormous strike - can produce the same net figure while behaving very differently as price approaches specific levels. That is why the net number is usually read alongside the wall and flip profile, not in isolation.

The per-contract building block behind the net figure follows a standard convention: multiply an option's gamma by its open interest, by the square of the underlying's price, and by a small scaling constant (commonly 0.01, representing a one-percent move) to express the result in dollars of hedging flow per one-percent move in the underlying. Net gamma exposure sums that per-contract figure across the whole chain, with the call-side and put-side contributions netted against each other under the dealer-side sign convention.

Because it compresses an entire chain's positioning into one comparable figure, net gamma exposure is typically the number tracked session to session and quoted as the day's headline reading in market commentary. Watching how that net figure evolves through a session - whether it is growing more positive, more negative, or crossing zero as price moves - is one of the more common ways the metric is used, distinct from treating any single point-in-time snapshot in isolation.