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LessonOctober 31, 2026 · 5 min

Gamma Flip: The Zero Gamma Level Explained

The gamma flip, or zero gamma level, is the price where dealers' estimated gamma turns from positive to negative. How it is found, read, and where it fails.

By The Oracle · For education, not financial advice.

The gamma flip, also called the zero gamma level, is the estimated price at which dealers’ total gamma exposure changes sign. Above it, dealers are estimated to be long gamma, so their hedging tends to lean against moves and calm price down. Below it, they are estimated to be short gamma, so their hedging tends to go with moves and speed them up. It is found by recomputing total gamma exposure at a range of hypothetical prices and finding where the total crosses zero. Like every GEX level, it rests on an assumption about who holds which options.

Why one price matters

Dealers hedge the options they hold by trading the stock. When their book is long gamma, staying hedged means selling into rallies and buying dips. When it is short gamma, it means buying rallies and selling dips. The flip is the price where one behaviour is estimated to hand over to the other, so it works as a boundary between two kinds of market, not as a support or resistance line. Positive vs negative gamma covers the two regimes in depth.

How the flip is calculated

  • Start from open interest. Take every contract open across the strikes and expirations you include.
  • Pick a grid of prices. For example, every $0.50 from 10% below the current price to 10% above it.
  • Recompute gamma at each price. An option’s gamma depends on where the stock trades, so each contract’s gamma is recalculated as if the stock stood at that grid price.
  • Sum with signs. Multiply by open interest and the contract size, apply the sign convention, and add everything up.
  • Find the crossing. The flip is where the total changes from negative to positive, usually found by interpolating between the two nearest grid prices.

Two shortcuts are common and less precise: reading the flip off today’s GEX-by-strike chart, or taking the strike where cumulative GEX crosses zero. Both skip the recalculation step, so they can put the flip a few strikes away from where a full calculation would.

The sign is an assumption. The usual convention treats dealers as long calls and short puts, because customers are assumed to sell calls and buy puts. Where customers did the opposite, the true sign at that strike is reversed, and the flip can sit somewhere else entirely.

A worked example

Illustration, not live data. The made-up stock XYZ from our GEX guide, trading at $100. Total GEX recomputed at each price, in dollars per 1% move:
$95 · −$2.6M
$96 · −$1.6M
$97 · −$0.5M
$98 · +$0.5M
$99 · +$0.8M
$100 · +$1.0M

The total changes sign between $97 and $98. Halfway between −$0.5M and +$0.5M is $97.50, so that is the estimated flip. At $100, XYZ is $2.50 above it, about 2.5%: inside the calmer regime, but not far inside. A slide of a few percent would take it to where hedging is estimated to add to moves, and in this example the further below $97.50 it went, the more negative the total would become. The per-strike view behind these numbers is in What is GEX?

How to read it

  • Distance matters. Far above the flip, a small move does not change the regime. Close to it, the regime is fragile, and price can cross back and forth.
  • The approach matters. A market falling toward its flip from above is moving from a calmer regime toward a faster one. Many traders watch for wider ranges once it crosses.
  • Read it with the walls. The flip says which regime you are in; the call and put walls say where hedging pressure is estimated to be heaviest inside it.
  • It is a boundary, not a line in the sand. Price does not have to stop, bounce or reverse at the flip.

Why the flip moves

  • Open interest changes. New positions and closes reshape the map every day, and the flip moves with it.
  • Expirations. When a large expiration rolls off, a big block of gamma disappears at once, and the flip can jump.
  • Volatility and time. Higher implied volatility spreads gamma across more strikes; less time to expiration concentrates it near the money. Both shift where the total crosses zero.
  • Price itself. Because gamma depends on price, the whole curve shifts as the stock moves, so tools that update during the session re-estimate the flip as they go.

Limits

The flip inherits every weakness of the GEX model. It assumes who holds what. It is built mostly from open interest, which is a day old and misses positions opened and closed within the session, including most 0DTE trading. Some charts show no flip near the price at all, when the total stays positive or negative across the whole range. And the regime it describes is a tendency: news, earnings and large orders from other traders can carry price straight through it.

Some data providers publish similar levels under other names, built their own way. Compare a flip only with others from the same tool.

The flip in MomoEdge

MomoEdge’s GEX tab draws the estimated flip as a dashed line for one ticker at a time, and says so when none is found near the price. The GEX tab lesson shows the flip on screen. The $10K account shows every trade our team takes with real money, winners and losers, before commissions and fees. If you want to follow the flip on live data, you can see what the terminal includes.

FAQ

Is the gamma flip the same as the zero gamma level?

Yes. Both names describe the price where total dealer gamma exposure is estimated to cross zero. Some providers publish related levels under their own names, calculated their own way.

What happens when price falls below the gamma flip?

The model expects dealers to be short gamma there, so their hedging tends to add to moves and ranges often widen. It is a tendency, not a rule, and price can climb back above the flip quickly.

Why does the gamma flip change during the day?

Each option’s gamma depends on the price, the time left and implied volatility, and all three change during the session. Open interest itself updates only overnight.

Why is there sometimes no gamma flip?

If total estimated gamma stays positive, or stays negative, across the whole range of prices checked, there is no crossing to report near the current price.