Glossary · Options
The gamma flip is the price level where the options market's aggregate dealer gamma changes sign. Above it, dealers are net long gamma and hedge counter-trend — selling rallies and buying dips — which dampens volatility. Below it, they are net short gamma and hedge with the move, which amplifies it. It is the single most important regime line on the intraday chart.
The same headline can produce a calm, mean-reverting tape above the flip and a violent, trending one below it. And because 0DTE options are now roughly half of SPX volume, the flip can migrate during the session — which is why a level fixed in an 8am report is often wrong by the afternoon.
Options dealers hold large inventories and hedge to stay roughly delta-neutral. When they are net long gamma, their hedging is counter-trend: as price rises their delta grows, so they sell the underlying; as price falls they buy. That flow pushes back against moves and compresses range.
When dealers are net short gamma, the hedging reverses: rising price forces them to buy more, falling price forces them to sell — they chase the move. That flow adds fuel, widens range, and creates the air-pocket acceleration traders associate with negative-gamma days. The gamma flip is simply the price where the net of all that crosses zero.
Above the flip (positive gamma): expect mean reversion, smaller ranges, and fades that work. Extremes tend to get sold and dips bought back. Trend-following gets chopped up.
Below the flip (negative gamma): respect momentum, expect range expansion and gaps, and size down. Breakouts run further than they 'should'. The cross of the flip itself is a regime signal — many traders treat a decisive break below it as a cue to switch from fading to following.
The old model assumed a slow-moving overnight gamma profile, so a single morning level held all day. That assumption broke as 0DTE volume rose. As new same-day strikes trade through the session, the gamma profile rebuilds and the flip migrates — sometimes by a meaningful distance before lunch.
The practical consequence: the flip is only useful if it is recomputed intraday on live implied volatility, and most useful when it sits on the chart you are actually trading, next to the DOM and the tape, rather than in a static PDF.
Yes — the terms are used interchangeably. Both refer to the price at which aggregate dealer gamma equals zero, i.e. the boundary between the positive-gamma (vol-dampening) and negative-gamma (vol-amplifying) regimes.
The hedging regime changes character. Crossing from above to below moves the market from dealer-stabilized (mean-reverting) to dealer-destabilized (trend-amplifying), so moves below the flip often accelerate. The cross itself is widely watched as a regime signal.
Yes. The gamma is computed from index options (such as SPX) and the resulting flip level is applied to the index and the index futures (ES, NQ) most dealer-hedging traders watch — drawn directly on the futures chart.
Intraday, on live implied volatility. In a 0DTE-dominated market the profile rebuilds through the session, so a once-a-day morning level frequently no longer reflects where dealers actually flip by the afternoon.
Sharpnel draws the gamma flip — recomputed intraday — on the same chart as your DOM ladder, footprint, and tape, so you see the regime line on the order flow you're already reading. Free Explorer tier on 15-min delayed data.
