MONEY GLOBE XOptions Strategies & Greeks · Lesson 6
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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Next lesson: Basis, contango and backwardation
Educational information only - not financial advice.