Options in 5 minutes

You don't need to trade options to use GEX — short for Gamma Exposure, a single chart that summarizes where options-dealer hedging will push or pull spot price. But to understand what you're looking at, you need four words.

Five minutes here pays back forever.

The four words

Call. A contract that gives you the right — not the obligation — to buy an asset at a fixed price. A trader who thinks BTC will rise might buy a call. If BTC rises, the call gains value. If it doesn't, the worst case is the premium they paid.

Put. Same idea, mirrored. A contract that gives you the right to sell an asset at a fixed price. Bought by traders expecting a fall, or by holders hedging downside.

Strike. The fixed price the call or put locks in. A "BTC $100,000 call" gives the holder the right to buy BTC at $100,000, regardless of where BTC actually trades. The strike is the deal price.

Expiration. A moment in time. After expiration, the option no longer exists. Before that moment, the holder can sell the option in the market to lock in its current value. At expiration, Deribit and Bybit settle in-the-money options automatically in cash — no early exercise, no physical BTC delivery. Weekly contracts expire every Friday at 08:00 UTC.

Premium: the price of optionality

When you buy a call or put, you pay a premium to the seller. That premium is the maximum you can lose.

This is the asymmetry that makes options powerful: bounded downside, open-ended upside (for the buyer). The seller gets the opposite — they collect the premium up front but face open-ended risk if the move goes the wrong way.

We'll get to dealer hedging in Lesson 2.

Time matters

Two calls at the same strike, expiring at different times, do not have the same value. The further-dated call is worth more — more time means more chances for the trade to work out.

The flip side: as expiration approaches, time value bleeds out of the contract. Six months out, a $5,000-out-of-the-money call has real premium. Three days out, the same call is almost worthless if price hasn't moved.

This is why expiration matters so much in GEX. As we approach a Friday close, the gamma concentration around near-the-money strikes intensifies. After Friday 08:00 UTC, all the contracts settling that day disappear — the GEX profile resets.

Strikes you'll see in GammaFlip

The bars on a GEX-by-Strike chart sit at the strike prices of all the active calls and puts. Each bar is a strike where someone, somewhere, holds an option.

You don't need to know which trader bought what. GammaFlip aggregates open interest at every strike across the exchange and computes the dealer's net gamma position there. That's the bar.

The taller the bar, the more dealer hedging activity is concentrated at that price.

You're ready

If "call, put, strike, expiration" make sense, you have everything you need. The next lesson explains why dealers hedge — the mechanism that makes those bars affect price in the first place.

Call, put, strike, expiration. The whole map fits in four words.