Unusual Whales has updated its GEX tool. See where dealers must hedge, as well as market maker positioning visualized. It is a must have tool. See more:

Unusual Whales has updated its GEX tool. See where dealers must hedge, as well as market maker positioning visualized. It is a must have tool. See more:

Long-time followers know I have my doubts about GEX as a number. I asked Mark (@multistratmark) for his view and he did not hedge. He thinks it is complete rubbish, and his reasons are different from mine, which made them worth hearing. His first objection is practical. Nobody has produced a systematic, backtestable way to trade off it. If a number is genuinely informative, you should be able to demonstrate that with data rather than by pointing at a chart afterwards. His second is specific to short-dated trading. He accepts the observation that price often pauses at these levels and comes back. But if you are running a stop, that does not help you at all. You get stopped out at the level and then watch the market recover without you. The third one I had not considered. On the day before a mega-cap earnings print, that single stock might be eight percent of the index. Whatever is happening in its options could be wagging the whole index gamma picture, and none of it necessarily shows up in SPX data. He offered a fourth on positioning generally. Hedge funds being long more VIX calls than ever tells you nothing on its own, because they might simultaneously be shorter SPX puts than ever as the other leg of a relative value trade. His hierarchy was clear enough. Spot price beats GEX, and what the option chain is doing beats both. I'd not put it quite that strongly myself, but I take the point.