Let's begin by understanding what GEX stands for. GEX refers to gamma exposure, indicating the rate of change in an option's delta due to shifts in the underlying asset's price.

Gamma and Gamma Exposure (GEX) have become increasingly influential market forces, especially with the introduction of zero days to expiration options (0DTE).

While we often place emphasis on smart money positioning (hedge funds and sweepers), GEX gives insight into the positioning of another vital set of players in the market: dealers and market makers. Given their role in the market, these players always engage in dynamic hedging, which means they're influencing the market at any given time.

Our proprietary geXray tool visualizes the highest gamma exposure levels based on zero days to expiration or weekly options. From this, we derive three crucial intraday price levels: the zero gamma level, the call wall, and the put wall.

Zero gamma, or the gamma-weighted average price level (yellow line), marks the point where market gamma turns negative or positive. Below the zero gamma line, market gamma is negative; above it, it's positive.

This line doesn't act as support or resistance but represents a directional indecision point. Traders in our community tend to look for long positions when prices trend above the zero gamma line and short positions when trending below. The zero gamma line also offers insight into the intraday trend. In bullish environments, we expect the zero gamma line to trend upward, and in bearish environments, downward.

The call wall (green line) denotes where the largest positive gamma accumulation exists. This stands as our most significant intraday resistance level. It represents the point where hedging impact from dealers and market makers is most pronounced. Traders in our community often sell futures short or opt for long put options when prices reach the call wall. Other trades in the room will target the call wall when trading long. The call wall represents a level with high liquidity and such levels often works as magnets that will pull price towards them.

The put wall (red line) represents the location with the most negative gamma accumulation, serving as the primary intraday support level. It signifies the level where hedging impact from dealers and market makers is most pronounced. Traders in our community usually buy futures or choose long call options when prices touch the put wall. Other trades in the room will target the put wall when trading short. The put wall represents a level with high liquidity and such levels often works as magnets that will pull price towards them.

The call wall or put wall may shift during the trading day. The direction of this movement acts as a directional signal. An upward shift is considered bullish, while a downward shift is seen as bearish. After a shift, traders in our community observe whether the wall holds its new price level. If it does, the directional signal is considered confirmed.

It's not unusual to witness the price breaking either the call or put wall. When the price breaches the call wall, we monitor to see if the call wall will shift higher. If it does, it indicates potential further upside in the price action. Conversely, if the wall doesn't shift higher, it's likely that the price may retrace, possibly back to the level of the call wall. (Frequently, the price retraces all the way back to zero gamma.)

In the event of a breach of the put wall, we observe if the put wall will shift lower. A lower shift signals potential downside in the price action. If the wall doesn't move lower, it suggests that the price might retrace, possibly returning to the put wall level. (Similar to breaches of the call wall, price retracements often extend back to zero gamma.)

Let's consider an example of ES from Monday, 11/6/2023:

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