DealerEdge Quick Start: Read Gamma in 5 Minutes

What Is DealerEdge?

DealerEdge translates dealer gamma exposure (GEX) into a visual heatmap so you can see - at a glance - where market makers are mechanically forced to buy or sell as price moves. Because dealer hedging is rules-based and predictable, the levels DealerEdge surfaces often hold when nothing on a standard chart would suggest they would.

When to Use DealerEdge

DealerEdge answers a specific set of questions that price charts alone cannot:

• Is the market in a regime where breakouts will accelerate, or will they get faded?
• Where is price likely to get "pinned" today, and what level would end that pinning?
• Where should I place my stop so I am not stopped out by dealer hedging pressure?
• Is a pullback likely to find mechanical support before becoming a trend reversal?

Use DealerEdge as your first check at the start of every session. It takes about two minutes to read the full picture, and it frames every trade you take that day.

Your First Heatmap Read: Step by Step

1. Open DealerEdge and select your underlying - SPX, NDX, SPY, or QQQ.
2. Check the GEX Rating. The rating (1-5) appears prominently at the top, color-coded from green (1) to red (5). This single number tells you the market's current regime. Ratings 1-2 mean dealers are long gamma and their hedging will dampen volatility. Ratings 4-5 mean dealers are short gamma and their hedging will amplify moves. Write this down or say it out loud before you read anything else.
3. Find the Anchor Point. The Anchor is the strike with the highest gamma concentration - shown as the tallest bar on the heatmap. Price gravitates toward this level in a positive gamma environment. This is often your trade target for the day, or the level you fade moves away from.
4. Locate the GEX Flip Point. The Flip is where GEX bars change from green (positive) to red (negative) on the heatmap. Above the Flip, dealer hedging stabilizes price. Below it, hedging amplifies moves. The Flip is your regime indicator - know which side of it price is currently on.
5. Identify the Defense Lines. The secondary strikes flanking the current price with significant gamma concentration are your Defense Lines - mechanical support and resistance. Price approaching these levels from inside triggers dealer hedging pressure in the opposite direction.
6. Read the AI analysis. DealerEdge includes an AI summary of the current gamma setup. It often provides specific actionable levels - for example, a level to watch for a breakout entry with a target at the Anchor. Use it as a structured second opinion on what you just read visually.

Reading the Output

GEX Rating 1-2 (green): The market is in pinning mode. Price bounces between Defense Lines and gravitates back toward the Anchor. Mean-reversion strategies work well here. Momentum trades get chopped. Tight intraday ranges are normal.

GEX Rating 3 (yellow): Transitional. Gamma influence is lighter and the market can break either way. Reduce size, wait for a clear signal, and favor defined-risk trades.

GEX Rating 4-5 (red): The market is in an amplification regime. Breakouts run farther than expected, pullbacks turn into selloffs. Momentum strategies work well here. Do not fight the trend with mean-reversion ideas.

Anchor Point: The gamma-weighted center of dealer positioning. In a 1-2 rating environment, treat it as your primary intraday target. If price is 1.5% below the Anchor with a rating of 2, a drift back toward the Anchor is the path of least mechanical resistance.

GEX Flip Point: Your regime divider. If price is above the Flip, you are in a stabilizing environment. If it drops through the Flip, expect the move to accelerate sharply because dealers are now forced to sell as price falls.

Defense Lines: Mechanical support and resistance driven by secondary GEX strikes. The closer a Defense Line's gamma is to the Anchor's gamma concentration, the more likely it holds. A Defense Line at 60-80% of the Anchor's GEX is strong. One at under 30% may not hold under a catalyst-driven move.

Focus Mode vs. Pro Mode: Focus Mode gives you a deep view on one underlying - the full heatmap, key levels, and AI analysis. Pro Mode places multiple tickers side by side, useful when you want to compare the gamma structure of SPY against SPX or QQQ before choosing which to trade.

Worked Example

Say you open DealerEdge at 9:15 AM and see SPY with a GEX Rating of 2. The Anchor Point sits at $520. The GEX Flip Point is at $514. Defense Lines show up at $517 (support) and $523 (resistance). SPY is currently at $518.50 - above the Flip, between the lower Defense Line and the Anchor.

This setup says: dealers are long gamma, moves will be dampened, and the path of least resistance trends toward $520. A trade idea might be to buy a call spread targeting the Anchor at $520 with a stop below the $517 Defense Line. If SPY were to drop through the Flip at $514, the regime shifts - that is your invalidation level for any bullish thesis.

This is an illustrative scenario, not a guaranteed trade outcome.

Common Mistakes

• Ignoring the GEX Rating and trading with a fixed strategy. A momentum strategy that works in a rating 4-5 environment gets destroyed in a rating 1-2 pinning market. Check the rating before every session.
• Treating Defense Lines as absolute walls. In a rating 4-5 environment, Defense Lines weaken significantly. They are mechanical pressure, not guarantees. Catalyst-driven moves blow through them.
• Misreading the Flip. The Flip Point is not just a support level - it is a regime change. A break below it changes how the entire market behaves for the rest of the session. Size down and reassess when price crosses the Flip.
• Not checking DealerEdge before entering a trade. Many intraday reversals happen at gamma levels visible on DealerEdge that are invisible on the price chart. A 30-second check can save a bad entry.

Where to Go Next

The Anchor Point has more depth than the heatmap reveals at a glance - Anchor Points Explained covers how they form, how they shift around expiration, and the exact setups they create. Defense Lines: Support and Resistance from Dealer Positioning goes deeper on how to size and place stops around these mechanical levels. The GEX Rating System maps each rating to specific strategy choices, and The GEX Flip Point explains the regime transition mechanics in detail. For the full feature overview, visit the DealerEdge feature page.