It is a common phenomenon in the stock market to buy and sell stocks as per the sudden shift in the prices. But the underlying question is that when is the right moment to take out or keep in the equity funds. This is a crucial decision as facilitating the transaction just in time will either lead to the highest possible profit or miss the same just by a whisker. Hence, investors take the help of an advanced tool that can help to decide the point when to sell or buy for maximum benefit. Indeed, ample instruments have been curated by the experts in the field but what might just come like a beacon is the gex flip point.
What is GEX?
It is the short form for Gamma Exposure which is used as a trading instrument during hedging. In the language of the professional, GEX is the sensitivity meter for the option sellers concerning the peak price shifts. Investors can draw inferences based on gamma exposure about what the fellow traders will hedge in the coming time.
Why is GEX crucial?
The stock market is unpredictable and hot-tempered. People need to study hedging behavior to make choices related to equity finances within a jiffy. And for this calculation, there is a need for progressively accurate metrics like gex flip point that help to monitor the price sensitivity.
Hers is an example to understand the uncompromising importance of gamma exposure. Imagine a coin is flipped and the person is supposed to tell whether it will fall onto heads or tails. It will be difficult to predict the face as the coin falls but it will be easy to anticipate if the guesser gets an idea that to which side is the coin inclined just before falling on the ground.
Yes, that last-second help needed is nothing but GEX. It helps the investors to know the probable market due to price sensitivity.