Dealer positioning, gamma and max pain

How hedging flows can calm or fuel moves

Professional - Gold & Platinum

In this lesson

Understand how market makers' hedging (dealer gamma) can dampen or amplify moves, and what max pain really means.

Key takeaways

Dealers hedge options; long-gamma hedging dampens moves, short-gamma hedging amplifies them.
The 'gamma flip' level separates these regimes (an estimate).
Max pain = strike where option holders lose most at expiry; a weak, unreliable pull.
Gamma and max pain figures rely on assumptions about positioning — use as context only.

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Educational information only - not financial advice.

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