Positive vs negative DEX

Like GEX has its positive and negative gamma regimes, the sign and size of Total Net DEX describes a positioning regime — who is crowded, and therefore who can be squeezed.

Positive DEX regime (call-heavy)

• The crowd leans bullish through calls; dealers hold long stock hedges against them.
• Rallies toward the biggest call strikes tend to stall: as those calls go deep in the money their deltas cap out and dealer buying dries up — while call sellers take profits.
• A sharp drop forces the opposite: dealers shed long hedges as call deltas collapse, adding supply on the way down. Call-heavy chains fall harder than they rally.

Negative DEX regime (put-heavy)

• The crowd leans bearish or hedged through puts; dealers hold short stock against them.
• Declines toward the biggest put strikes often decelerate — the insurance is already in place and dealer shorts are already sold.
• A rally forces dealers to buy those shorts back as put deltas bleed — the mechanical fuel of a short squeeze. Deeply negative DEX is why bear-market rallies are violent.