Gamma exposure (GEX) estimates how much hedging dealers must do per point of price movement. The math isn't exotic; it's a weighted sum across the options chain, plus one big assumption.

The building blocks

For each strike you take its gamma (how fast delta changes), multiply by the open interest there (how many contracts), by the 100 contract multiplier, and by spot (to express it in dollars per 1% move). That gives the dollar gamma sitting at that strike. Do it for every strike and expiration, and you have a gamma profile across price.

The sign: the crucial assumption

To get net GEX you must sign each strike by which side dealers are on. The standard convention assumes dealers are long calls and short puts — so call gamma adds and put gamma subtracts. Sum it all and a positive number means dealers are net long gamma (stabilizing), negative means short gamma (amplifying). The gamma flip is where that sum crosses zero.

GEX is a weighted sum you could do by hand — except for one assumption about dealer positioning that the whole number hinges on.

Why it's an estimate

Two honest caveats. The dealer-positioning sign is assumed, not observed — nobody publishes which side dealers are really on. And choices like which expirations to include and how to model gamma vary, which is why two providers show different GEX. Treat GEX as a well-motivated estimate of the hedging terrain, not a measured fact — a map that tilts the odds, exactly how the rest of the dealer read should be used.