DEX: the lean
DEX is the directional lean of dealer hedging at each strike: a lean, not a level.
What DEX shows
DEX shows the directional lean of dealer hedging at each strike: which side carries the weight.
- Reads
- Dealer delta at each strike, in dollars: the directional position already standing there right now. A position, not a forecast.
- Positive means
- The lean at that strike points long.
- Negative means
- The lean at that strike points short.
- Useful when
- Seeing which side carries the weight across the map.
- Watch for
- A lean, not a level. Find the walls, cushions and fuel with GEX.
What delta tells you
Delta is how much an option's price changes for a small move in the stock, if nothing else changes. A long call with a delta of +0.40 gains about $0.40 per share when the stock rises $1. One contract usually covers 100 shares, so that is about $40 per contract.
Delta describes the slope now. The slope itself keeps changing, so stretching it over a big move gets unreliable.
Why a dealer trades shares
Take a dealer who sells one call with delta +0.40 (multiplier 100). That position behaves like being short about 40 shares. Buying 40 shares offsets the direction for now. If the call's delta rises to +0.55, the short call is like being short 55 shares, so the same plan calls for 15 more shares.
Notice that the option type alone does not tell you which case you are in. It depends on who holds which side, and a real book has calls, puts, spreads, futures and older hedges all at once.
This changing hedge is one reason option positioning can matter for price near certain strikes. It does not make a strike automatic support or resistance.
A large DEX strike
A large DEX strike marks where the most exposure sits, not where price will go.
- Check the time stamp: a map read after the close is yesterday's picture.
- Look at the open interest family too. Size near the same strike in both is context, not confirmation.
- Readings change, and the size you planned around may be gone.