Negative gamma regime (amplified)

A negative gamma regime is the state in which a dealer GEX model estimates the hedging book to be net short gamma at the current spot. A short-gamma book kept delta-neutral buys after rises and sells after falls, so its modeled hedging flow travels with the move rather than against it; Senzoukria calls this state Amplified.

Senzoukria · Glossary · Updated September 2026

The mechanism in one example

Take an isolated short-put position of 10 standard contracts with multiplier 100 and a put delta of -0.40. The position carries +400 underlying-equivalent units, so the neutral hedge is short 400 units. A fall in spot takes the put delta to -0.50; the position is now +500 units and the hedger sells 100 more. A rise takes it to -0.30 and the hedger buys 100 back. Each adjustment goes in the direction of the move that caused it, exactly as in the short-call case. Scale that across a chain modeled as net short gamma and the hedging flow is procyclical, which is where the amplified label comes from.

What it does and does not imply

  • Implied: if the positioning assumption holds and dealers hedge to neutral, breaks are expected to run further and sessions to stretch.
  • Implied: the effect is larger when net gamma is more negative and when short-dated at-the-money gamma is high, as on expiry days.
  • Not implied: direction. A short-gamma book amplifies moves both ways; it does not choose one.
  • Not implied: that a specific print is a dealer hedge, or that the hedge passes through the futures contract being watched.

Why the regime can flip without price moving

The sign is a model output. Changing the expiry scope from all listed expiries to the nearest one, excluding 0DTE, switching the pricing model, or reversing the dealer positioning convention can all move the zero-gamma root across spot. Time alone matters too: as expiry approaches, gamma concentrates at the money and the chain's net sign can change during the session while open interest stays the same. Two providers with different settings can disagree on the regime at the same moment.

In Senzoukria

In the GEX module the regime panel displays Amplified when spot sits below the flip under the current assumptions, with the message that dealers are short gamma here, hedge with the move rather than against it, and that breaks run further and sessions stretch. The same panel shows the Gamma flip price and Spot so the distance is visible, and the Net GEX by strike page with its Cumulative view shows the running sum crossing zero, which is the flip that chart sees. The Calculation assumptions panel, with Dealer positioning, Expiry scope and 0DTE handling, is where a user can see how much the regime depends on the settings. Nothing here places orders; the module is context only.

Common mistakes

  • Reading amplified as bearish. It is symmetric.
  • Assuming the regime is stable for the day when a single volatility repricing or expiry roll can move the flip.
  • Comparing an amplified reading from one provider with a dampened reading from another without checking their assumptions.

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Frequently asked questions

Is a negative gamma regime dangerous to trade?
The model suggests moves may extend further because hedging flow travels with them, which changes how far a break can run before it meets opposing volume. That is a reason to read the footprint at each level rather than assume a fade. It is not a warning to stay out, and it is not a promise that breaks will succeed.
What turns a negative gamma regime into a positive one?
Spot crossing the modeled zero-gamma level, or the level moving across spot because positions, volatility, time or the model settings changed. Senzoukria marks the transition zone as On the edge, and its message notes that crossing the flip turns amplification into dampening in either direction.
Does negative gamma show up on the ES footprint?
Only indirectly. The footprint records executed bid and ask volume per level for the futures contract, with no participant labels. What a trader can check is whether pushes through levels meet thin opposition, which is consistent with the hypothesis, or heavy opposition, which is not. The regime never identifies the hedger.

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