Zero gamma (sometimes called the gamma flip) is the level where net dealer gamma changes sign. Above it, hedging often stabilises price; below it, hedging can accelerate moves. That single idea is why so many 0DTE traders mark “ZG” next to the walls.
A practical zero-gamma playbook
- At the open, note ZG relative to spot and to the expected-move cone.
- If spot holds above ZG into a wall, favour mean-revert / fade-extension tactics (still with risk).
- If spot loses ZG and volume GEX goes more negative, favour momentum continuation until the next put structure.
- Re-check after major volume bursts — ZG can relocate when the chain re-prices.
Why ZG jumps (especially on NDX)
Zero gamma is computed from the live chain. When large strikes trade, expire, or when OI is thin away from the money, the flip can leap to a new strike. NDX/NDXP often shows sharper jumps than SPX because the book is narrower. That is not a bug — it is the map updating. See also → /blog/zero-gamma-jumps-during-the-session
Common mistakes
- Treating yesterday’s ZG as today’s without recomputing.
- Ignoring volume GEX when OI still shows an old flip.
- Using SPY zero gamma to trade NQ (wrong underlying).