Tag Archives: Gamma Squeeze

Gamma Squeeze Explained: How Dealer Hedging Moves Markets

Gamma squeeze price action showing explosive rally from dealer hedging feedback loop followed by unwind

A gamma squeeze is one of the most powerful — and most misunderstood — forces in modern options markets. It occurs when market makers are forced to buy the underlying asset to hedge their short options positions, and that buying creates more upward pressure, which forces more buying. The result is a self-reinforcing loop that […]