Two Tabs, One Idea
GEX Setups and Charm Setups are the two Discovery scanners that work on dealer positioning instead of on prints or headlines. They share a governing idea: a level only counts when the market structure gives it a mechanism. The same price can be a tradeable magnet in one regime and a meaningless number in another, so both scanners check the regime before they will call anything a setup.
That is what "regime-gated" means in practice. A name is not evaluated against a universal checklist, but against the checklist that applies to the regime it is in right now.
The Gate: GEX Rating, and What It Is Not
The GEX Rating is a 1 to 5 volatility-regime score. It is never directional, and every misuse of these tabs starts with forgetting that.
- Rating 4 to 5 - positive gamma. Dealer hedging is countercyclical, so it damps moves and price tends to mean-revert toward the anchor. Range compresses.
- Rating 1 to 2 - negative gamma. Dealer hedging is procyclical, so it amplifies moves in both directions. Levels hold less reliably and ranges expand.
- Rating 3 - transitional or mixed. Gamma is roughly balanced and the structure exerts little mechanical influence either way.
A Rating 5 name can fall all day; it will simply fall in a compressed, range-bound way. A Rating 1 name can rally violently. The mechanics behind each band are covered in Positive vs. Negative Gamma. Read the rating as a statement about how a name will move, never about which way.
The Three GEX Setup Types
Near GEX anchor - requires Rating 4 or higher
The Anchor is the price the gamma structure is organized around. This setup fires when price approaches it, and it is restricted to Rating 4 and above for a specific reason: at 4 or higher, the anchor is the level with gravity. Positive-gamma hedging keeps pulling price back toward it, so proximity is a mechanism rather than a coincidence.
Drop the same name into a Rating 1 regime and the mechanism inverts. Hedging now amplifies price away from where it is rather than pulling it back, and an "anchor approach" is just price passing a number. Showing that row would be worse than showing nothing, because it dresses a coincidence up as structure.
Flip reclaim zone - for Rating 1 to 2 names
The GEX Flip Point is the price where net dealer gamma changes sign, the boundary between the damping regime and the amplifying one. This setup is aimed at volatile names pressing back at that level, which is why it belongs to the Rating 1 to 2 band.
A name rated 1 or 2 is already in negative gamma. Its behavior is amplified, its range is wide, and its levels are being tested rather than respected. The flip is the one level in that environment that still means something mechanically, because crossing it is what would change the regime. A name pressing back at its flip is a name arguing about which regime it belongs to, and that argument is the setup.
At gamma flip - Rating 3 only
This one is the narrowest, restricted to Rating 3 and nothing else. Rating 3 is the transitional band where gamma is balanced and neither the anchor nor a strong directional amplification is in charge. A name that is at its flip while also rated 3 is sitting exactly on the boundary in exactly the regime that is already undecided.
That is a genuinely different situation from the other two, and it earns a separate label rather than being folded into flip reclaim. It is also why the tab can be short: a name has to be both at the flip and rated 3.
Distance Is Setup-Relative
Every row displays a distance, and each row measures the distance to the level its own setup is about. A flip setup shows distance to the flip; an anchor setup shows distance to the anchor. There is no shared reference price across the tab.
This is the most common misread on the tab. Two rows both showing 0.5% are statements about two entirely different prices, and comparing them as if they were the same measurement produces nonsense. Read the setup type first, then the distance.
The Liquidity Floor and the Index Exemption
A single-name liquidity floor applies to the GEX Setups tab. A thin name can display a beautiful gamma structure that no one can actually trade at size, and a setup you cannot enter or exit without paying the spread twice is not a setup. The floor removes those.
Indices and major ETFs are exempt from that floor, because index gamma sits on a completely different scale from single-stock gamma. A threshold calibrated to make a mid-cap meaningful would either admit everything on the index side or, applied naively, distort the comparison entirely. Exempting them keeps one rule from being asked to do two incompatible jobs.
Charm Setups: What Charm Actually Is
Charm is the rate of change of delta with respect to time. Delta measures how much an option's price moves per dollar of underlying movement, and charm measures how that delta drifts as the clock runs, holding everything else still. It is why a dealer's hedge goes stale overnight even when price never moves: time alone changed how much exposure the position carries. Because dealers hedge delta, a predictable drift in delta implies a predictable drift in hedging flow, which is why stacked charm is worth scanning for. The DealerEdge Charm lens goes deeper, and Understanding the Greeks puts charm in context with the first-order Greeks.
Charm Stack at Anchor: the Real Setup
The qualifying Charm setup is Charm stack at anchor, and it has two halves that must both be true:
- Price is within 1% of the GEX Anchor.
- Positive charm is stacked a few strikes above the anchor.
Both. That confluence is what makes it a setup rather than just a level. Price at the anchor on its own is an observation about location, and a charm stack on its own is an observation about the option book. Neither is rare. It is the overlap, price sitting at the level the structure is organized around while the time-decay flow is concentrated just above it, that narrows the field to something worth looking at.
Requiring both halves is also why this tab is often empty, which is the design working rather than a fault. As covered in the Discovery quick start, a name that qualifies for nothing is dropped rather than ranked last.
Near Anchor Plus Charm: the Weaker Watch State
Near anchor + charm is a distinct and deliberately weaker state. The stack exists, but price is 1 to 2% away from the anchor rather than inside 1%.
It is labeled separately on purpose, because the honest thing to do with a partial match is to name it as partial rather than promote it. Treat it as a watch item: one half of the confluence is present and the other may or may not arrive. Sizing a near-anchor row as though it were the real thing is exactly the mistake the two labels exist to prevent.
For Example
For example, suppose GEX Setups shows three rows. The first is a Rating 4 name flagged as Near GEX anchor at 0.3% away. The second is a Rating 2 name flagged as Flip reclaim zone at 0.8% away. The third is a Rating 3 name flagged as At gamma flip.
Those three rows call for three different kinds of thinking. The Rating 4 anchor row sits in a damping regime, so mean-reverting behavior around the level is the structural expectation and a momentum plan is fighting the mechanism. The Rating 2 flip row sits in an amplifying regime where a decisive resolution through the level is more in character, and where Defense Lines hold less reliably. The Rating 3 row is the least mechanically constrained of the three.
Note also that 0.3% and 0.8% are not comparable: one is distance to an anchor, the other to a flip. This is an illustrative walkthrough of how to read the tab, not a prediction or a recommendation.
Common Mistakes
- Reading the rating as direction. A Rating 5 anchor setup is not a buy signal. The rating describes how a name will move, never which way. Direction still comes from flow, catalysts, and price structure.
- Comparing distances across setup types. Each row measures against its own level. Sort by distance only within a single setup type, and read the type before the number.
- Expecting an anchor setup on a volatile name. It will not appear, because anchor setups are gated at Rating 4 and above. The absence is the scanner declining to show a level without a mechanism, not a data gap.
- Treating "Near anchor + charm" as "Charm stack at anchor". One is a full confluence inside 1%, the other is a partial match 1 to 2% away. The labels are different because the situations are different.
Where to Go Next
For orientation across all five scanners, start at Discovery Quick Start. To have these setups reach you without watching the tab, see Discovery Alerts. The structural background lives in The GEX Rating System, Anchor Points Explained, and The GEX Flip Point. For the full gamma map behind every one of these levels, read How to Read a GEX Heatmap or visit the Discovery feature page.