Dealer positioning
Dealer positioning is the assumption a GEX model makes about which side of each open option contract market makers hold. Open interest counts contracts without naming holders, so the sign of dealer gamma is inferred by convention, most often that dealers are short the calls and long the puts their clients own.
Senzoukria · Glossary · Updated September 2026
What the exchange publishes and what it does not
OPRA and the listing exchanges publish quotes, trades and once-daily open interest. Every open contract has a long and a short side, and the report says nothing about who sits on which. A model that wants to know whether a hedging book is long or short gamma at a strike therefore has to assume a holder. Public GEX dashboards generally assign positive exposure to calls and negative exposure to puts, or the reverse, and present the result as if it were measured. It is not.
The usual convention and its logic
- Clients are assumed to buy puts for protection and sell calls for income, so the dealer ends up long the puts' counterparty side and short the calls.
- Under the short-call, long-put reading, call open interest contributes negative dealer gamma and put open interest contributes positive dealer gamma. Many public dashboards print the reverse scheme (calls positive, puts negative), so the same chain can appear with opposite signs on two sites.
- Flipping the assumption reverses every sign on the chart: the zero-gamma level moves, and a call wall and a put wall swap their implied hedging direction.
- The convention is a reading of the street, not a law. Netting, spreads and other hedges inside a real book can diverge from it on any given day.
Why it decides the hedge direction
A delta-neutral hedger with a long-gamma book sells after a rise and buys after a fall; with a short-gamma book the adjustments reverse. Whether a strike is long or short gamma for the dealer is exactly what the positioning assumption sets. This is why a call wall does not, on its own, tell you whether dealers sell into a rally there; the gamma-walls guide on this site works through an isolated short-call example where the hedge buys more after a rise.
In Senzoukria
The GEX module states this assumption instead of hiding it. The Calculation assumptions panel has a Dealer positioning setting with two options, Dealers short gamma (clients own the options) and Dealers long gamma (clients sold the options), and its hint explains that OPRA publishes open interest, never who holds it, and that flipping the setting flips every sign on the page. The regime panel's caveat repeats that the reading assumes dealers are net short options, which nobody publishes. The How firm the key levels are section then shows how far zero gamma, the call wall and the put wall move when the assumptions vary.
Common mistakes
- Calling a dealer GEX number a measurement of dealer books.
- Comparing two providers' flips without checking whether they use the same positioning convention.
- Attributing a print near a gamma level to dealer hedging because the model predicted it.
Related
This page in other languages
Frequently asked questions
- Can dealer positioning be observed directly?
- Not from public data. Exchange open interest does not identify holders, and dealer inventories are private. Some vendors use trade-side classification of the options tape to estimate whether customers bought or sold, but that is still an inference with its own error, not a position report.
- What happens to GEX if the dealer positioning assumption is wrong?
- Every sign inverts. A level presented as dampening becomes amplifying, the zero-gamma root moves and walls keep their strikes but lose their implied hedge direction. This is why the assumption should be visible on the chart and why levels should be compared with executed volume before being trusted.