Trading positive and negative Gamma ranges is a tool institutions use to gauge market “elasticity”—almost no retail traders know about it, yet it directly determines whether your stop-loss gets swept.
Here’s the core logic:
Options market makers need to hedge their Gamma exposure.
Positive Gamma range: When prices rise, market makers buy; when prices fall, they sell.
→ Effect: The market gets “compressed,” volatility narrows, and prices tend to revert toward the mean.
Negative Gamma range: When prices rise, market makers sell; when prices fall, they buy.
→ Effect: The market gets “amplified,” volatility expands, and one-way trends run further.
The practical takeaway:
Positive Gamma range = range-trading strategy: sell high, buy low, and use wider stop-losses.
Negative Gamma range = trend-following strategy: enter in the direction of the trend and move quickly.
Current BTC example:
Today, BTC has been ranging between $76,389 and $78,406, with a swing of nearly $2,000.
A large amount of open interest in key options is concentrated around $77,000 (the max pain level/Gamma center).
As long as price doesn’t decisively break either boundary, market makers’ hedging activity will repeatedly pull it back—this is a classic sign of a positive Gamma range.
A reasonable strategy right now:
Go long below $76,400, targeting $77,200;
Go short above $78,200, targeting $77,000;
Don’t set your stops too tight at either end—the positive Gamma range will frequently produce false breakouts.
The real danger is BTC falling below $75,500 or breaking above $79,500—that would signal a Gamma flip and the start of a trending market, where range-trading strategies will repeatedly get burned.
I’ve seen too many people use trend-following strategies in ranging markets and range-trading strategies in trending markets. The result is obvious: getting liquidated again and again.
First figure out which Gamma range you’re in, then decide which strategy to use.
Follow me for a livestream and SMC lessons every night at 21:00.
🌿 Zhao | Not financial advice
Here’s the core logic:
Options market makers need to hedge their Gamma exposure.
Positive Gamma range: When prices rise, market makers buy; when prices fall, they sell.
→ Effect: The market gets “compressed,” volatility narrows, and prices tend to revert toward the mean.
Negative Gamma range: When prices rise, market makers sell; when prices fall, they buy.
→ Effect: The market gets “amplified,” volatility expands, and one-way trends run further.
The practical takeaway:
Positive Gamma range = range-trading strategy: sell high, buy low, and use wider stop-losses.
Negative Gamma range = trend-following strategy: enter in the direction of the trend and move quickly.
Current BTC example:
Today, BTC has been ranging between $76,389 and $78,406, with a swing of nearly $2,000.
A large amount of open interest in key options is concentrated around $77,000 (the max pain level/Gamma center).
As long as price doesn’t decisively break either boundary, market makers’ hedging activity will repeatedly pull it back—this is a classic sign of a positive Gamma range.
A reasonable strategy right now:
Go long below $76,400, targeting $77,200;
Go short above $78,200, targeting $77,000;
Don’t set your stops too tight at either end—the positive Gamma range will frequently produce false breakouts.
The real danger is BTC falling below $75,500 or breaking above $79,500—that would signal a Gamma flip and the start of a trending market, where range-trading strategies will repeatedly get burned.
I’ve seen too many people use trend-following strategies in ranging markets and range-trading strategies in trending markets. The result is obvious: getting liquidated again and again.
First figure out which Gamma range you’re in, then decide which strategy to use.
Follow me for a livestream and SMC lessons every night at 21:00.
🌿 Zhao | Not financial advice