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GEX Heatmap Quick Start

Get trading in 5 minutes. This guide is for new users who want to start immediately.

DealerEdge GEX heatmap with key levels and AI analysis

The 60-Second Version​

Step 1: Find the Brightest Tile = Your Anchor​

Look for the brightest green/blue tile on the heatmap. This is where price wants to go - the Anchor Point.

Step 2: Where is Price vs Anchor?​

  • Price BELOW anchor - Bullish - Buy calls or bull spreads
  • Price AT anchor - Neutral - Sell premium (iron condors)
  • Price ABOVE anchor - Bearish - Buy puts or bear spreads

Step 3: Check the GEX Rating​

  • 5/5 or 4/5 - Buy calls
  • 3/5 - Iron condors (sell premium)
  • 2/5 or 1/5 - Buy puts

Step 4: Trade According to the Rating​

  • Anchor = Direction
  • Rating = Strategy
  • Stick to the system.

What is GEX?​

GEX (Gamma Exposure) measures the hedging pressure market makers must apply as price moves.

Because dealers are net short options, they hedge constantly:

  • Above a high-GEX strike - Dealers SELL - creates resistance
  • Below a high-GEX strike - Dealers BUY - creates support

Result: Price gravitates toward large positive gamma levels.

How to Read the Heatmap​

  • Each tile = strike x expiration
  • Brightness = strength of gamma magnet

Color Meaning​

  • Positive Gamma (Green/Blue): Stabilization - Price gravitates to these levels
  • Negative Gamma (Red): Volatility - Price accelerates through these levels

Key Patterns​

  • Vertical Walls: Strong multi-day support/resistance
  • Horizontal Bands: Expiration clusters (OpEx magnets)

Understanding Key Levels​

1. Current Price​

Shows your real-time position relative to the anchor.

2. Anchor Point​

Highest gamma exposure - strongest magnet for price.

3. Defense Lines​

Secondary levels (60-80% of anchor strength). These are backup support/resistance.

4. GEX Flip Point​

Where gamma shifts from positive to negative.

  • Below flip - stable
  • Above flip - high volatility

GEX Rating System​

RatingBiasStrategies
5/5Very BullishCalls, bull spreads, CSPs
4/5BullishBull put spreads, defined-risk calls
3/5NeutralIron condors, calendars, butterflies (most common)
2/5BearishBear call spreads, long puts
1/5Very BearishLong puts, bear put spreads

Your First Trade (Step-by-Step)​

  1. Open DealerEdge - Find the brightest tile = anchor
  2. Check Current Price - Above anchor = bearish, below anchor = bullish, at anchor = neutral
  3. Check Rating - Example: 3/5 = Neutral - Sell premium
  4. Pick Strategy - 3/5 = Iron Condor
  5. Execute - Example setup:
    • Sell 6600 put, Buy 6590 put
    • Sell 6700 call, Buy 6740 call
    • Credit ~$2,000, Risk ~$8,000
  6. Manage - Take profit at 50%, stop if price breaks protection wings, re-check GEX daily

Common Mistakes to Avoid​

  • Fighting the Anchor - Price gravitates toward the anchor
  • Buying Premium in 3/5 - Neutral = SELL premium, not buy
  • Ignoring the Rating - Rating = strategy. Don't override it with emotion
  • Misreading Positive Gamma - Positive gamma = stability, not bullishness

Quick Reference​

5-Second Decision Tree​

  • Price ABOVE anchor - Bearish - sell calls / buy puts
  • Price BELOW anchor - Bullish - buy calls / sell puts
  • Price AT anchor - Neutral - iron condors

Quick Checklist​

  • Found anchor
  • Checked price vs anchor
  • Checked rating
  • Selected matching strategy
  • Placed stop at next GEX level
  • Adjust daily

5 Golden Rules​

  1. Anchor is King
  2. Above anchor = bearish; below anchor = bullish
  3. Rating dictates strategy
  4. Neutral = sell premium
  5. Update daily