GEX vs VEX
GEX reads how the hedge changes when price moves. VEX reads how it changes when implied volatility moves, even if price stands still.
GEX: gamma, in dollars
As price moves, delta shifts. Gamma is how fast it shifts. GEX is the dollar size of that change at a strike: how much dealers would likely need to re-hedge when price moves through it.
- Reads
- Dealer gamma at each strike, in GEX dollars: roughly how much stock dealers would need to buy or sell as price moves through that area.
- Positive means
- A wall above price, a cushion below: dealers sell rallies and buy dips.
- Negative means
- Fuel: dealers buy rallies and sell dips.
- Useful when
- Judging how hedging leans at a level. The net total sets the day's character.
- Watch for
- On flow maps a big negative strike leans with the move. It can still carry the Ceiling or Floor tag.
VEX: vanna, in dollars
Vanna is how dealer delta shifts when implied volatility moves. A volatility move can prompt dealers to adjust their hedges even when price hasn't moved.
- Reads
- Dealer vanna at each strike, in dollars: roughly how much dealer hedging would shift when implied volatility moves, even if price stands still.
- Positive means
- If IV rises, hedging leans toward buying; if IV falls, toward selling. Usually a cushion.
- Negative means
- If IV rises, hedging leans toward selling; if IV falls, toward buying. Usually fuel.
- Useful when
- CPI, FOMC, earnings, and sharp IV spikes or crushes.
- Watch for
- Large VEX near spot into an event: when IV resets, it can matter more than GEX.
IV usually rises on dips and falls on rallies.
Reading them together
The GEX + VEX map is one read of how hedging responds when price and volatility move together.
- Positive means
- Price and volatility effects together lean against the move: a firmer wall or cushion.
- Negative means
- Together they lean with the move: more fuel.
- Useful when
- Event days and sell-offs, when price and volatility move together.
- Watch for
- Opposite signs cancel: a quiet tile can hide a big GEX and a big VEX.
Delta is the hedge, gamma is how it changes with price, and vanna is how it changes with volatility.