Options market makers and dealers typically delta‑hedge their books. When they sell calls to customers, they often short some amount of the underlying (spot or perps) to remain neutral. When price rises, the call option’s delta increases (positive gamma), forcing dealers to buy more underlying to stay hedged—creating a feedback loop. The result can be an upside acceleration commonly called a “gamma squeeze.” The reverse can happen on the downside with puts.

Two core Greeks matter here:

• Delta (Δ): Measures how much an option’s price changes for a small move in the underlying. Dealers hedge delta by trading spot/perps.
• Gamma (Γ): Measures how fast delta changes. When dealers are short gamma, each price move forces additional hedging in the same direction as the move, amplifying volatility.

In crypto, weekly expiries and 24/7 trading mean these hedging flows can dominate intraday and multi‑day moves, particularly when open interest clusters around nearby strikes. Understanding where the largest gamma exposures sit can help you anticipate accelerations, “pinning” near key strikes into expiry, or violent breaks when those pins fail.

Imagine BTC trading at 68,000. The week’s options OI shows large call walls at 70,000 and 72,000, and a put wall at 66,000. IV is ticking higher, and OI at 70,000 calls has grown for three days. Your GEX proxy indicates dealers are short gamma around 68–70k.

Price coils below 69,500 with declining realized volatility, then breaks 70,000 on a rising 30‑minute close and strong volume. Funding nudges higher as perps traders chase. You enter long perps at 70,050, set a stop at 69,300 (about 0.8 ATR), and target 71,800–72,000 (next wall). As the move extends, you trail a stop below a 20‑EMA channel. Near 71,600, you see IV begin to plateau; at 71,900, your target hits. You scale out 70% and keep 30% with a tighter trail, aware that if GEX flips to long near 72,000, pinning could stall the rally. If IV compresses into the close, you exit the remainder.

This same logic applies to altcoins with active options (or proxies via perps funding and OI). Thin books mean slippage can be worse, so reduce size and widen stops slightly to avoid getting wicked out by illiquid prints.

Bitcoin: BTC options are the deepest in crypto. Dealer hedging behavior is more consistent, and OI walls are more reliable. Pinning near big round numbers (e.g., 60k, 70k) into weekly expiries can be frequent; plan partial profit‑taking near these levels.

Ether and Large‑Cap Altcoins: ETH has robust options, though skew and term structure can be more reactive to network news. For large‑cap alts with thinner options, rely more on perps data: funding, open interest, and liquidation maps can substitute for detailed GEX when the options chain is sparse.

Smaller Alts: Most traders use perps only. Here, “squeeze” conditions show up as an OI surge with rapidly rising funding and thinning offers. Treat OI clusters in perps as your “walls,” and size down to respect liquidity risk.

You can approximate dealer gamma exposure with a spreadsheet:

1. Gather chain data for the front two expiries: strikes, OI, IV, and whether OI is predominantly customer long or short (if unavailable, assume customer long calls/puts at crowded strikes as a starting point, then validate with flow if possible).
2. Compute per‑contract gamma using a standard options calculator (Black‑Scholes works fine for a first pass; the model error is usually smaller than the signal from large OI clusters).
3. Multiply gamma by OI and assign a sign: positive if dealers are short gamma (customers long), negative if dealers are long gamma.
4. Sum across strikes near spot for a net GEX estimate and plot versus underlying price.

Augment with a simple visual: plot price, mark the top two call walls and bottom two put walls for the nearest expiry, overlay a 20/50 EMA, and annotate funding and OI changes. You’ll quickly see when price is “stuck” between walls or primed to break.

Many Canadian‑registered platforms focus on spot trading and may not offer options. If you use international venues for options or perps, ensure they are accessible in your province and understand the platform’s terms, custody arrangements, and compliance obligations. Always use strong security practices and diversify custody when holding meaningful balances.

On taxes, crypto transactions can be taxed as income or capital gains depending on activity and intent. Rules evolve, and details vary by province and personal circumstances. Keep meticulous records of trades, fees, and conversions, and consult a qualified professional for guidance relevant to your situation. Avoid placing high‑turnover strategies in registered accounts without understanding the rules.

Options‑driven moves create social buzz. Don’t let that replace your process. Before each session, write your levels (call/put walls), your GEX bias (short or long near spot), and your triggers. Decide in advance how you’ll react to false breaks. After the trade, log whether the move aligned with your thesis (dealer hedging) or something else (news, liquidations), and refine your checklist.

Consistency beats adrenaline. A handful of well‑executed squeezes each month—managed with strict risk limits—can compound better than chasing every spike.