Investors have long relied on measures such as Volatility Index (VIX) to determine market volatility. However, there is now an alternative tool that may provide more accurate information. These tables not only provide descriptive statistics but also serve as a substitute for traditional volatility measures.
So, how do these tables work, and why are they better? First, let's look at what GEX stands for. GEX is short for "Gamma Exposure." Gamma is the rate of change of an option's delta, which measures the option's sensitivity to price changes in the underlying asset.
The use of GEX as a substitute for measuring volatility is based on the fact that option powerhouses tend to buy low and sell high when GEX is positive. This means that high GEX values correspond to a calm market, while low GEX values indicate a volatile market. By monitoring the GEX, investors can gauge the overall sentiment of the market and make informed investment decisions.
Investors seeking a low-risk investment strategy can purchase when GEX is positive, indicating a stable market. Conversely, experienced investors who are knowledgeable about valuations, models, or technical analysis may opt to take a more aggressive approach and purchase when GEX is negative.
In conclusion, Sector GEX tables provide investors with a better way to gauge market volatility than traditional measures such as the VIX. By monitoring the GEX, investors can make informed investment decisions and potentially increase their profits.
Nifty GEX at What is GEX (Gamma Exposure)? .
Historically how Nifty GEX has moved at Historical Nifty GEX
Other links:
Other methodologies for calculation of GEX How to Calculate Gamma Exposure (GEX) and Zero Gamma Level
What is VIX? VIX
Chemicals is not a sector
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