Option Levels/Envelopes - DeepChart

Option Levels/Envelopes - DeepChart

Option Levels/Envelopes plots three key gamma levels directly on your price chart as horizontal lines - Zero Gamma, Major Gamma, and Minor Gamma. These levels help you identify where dealer hedging activity is likely to be most concentrated, giving you a structural framework to understand potential support, resistance, and regime changes in the market.

Note: Option Levels/Envelopes is available on NDX, QQQ, SPY, and SPX.

How to Add Option Levels/Envelopes

  1. Go to New in the top menu
  2. Click on Option Chart

  3. A Select Instrument dialog will appear with the following options:
    • NDX - Symbol: NQ-CME, Exchange: CME
    • QQQ - Symbol: NQ-CME, Exchange: CME
    • SPX - Symbol: ES-CME, Exchange: CME
    • SPY - Symbol: ES-CME, Exchange: CME

  4. Select your preferred instrument and click to open the chart
  5. Once the Option Chart is loaded, click the Indicator Add button on the chart toolbar
  6. Search for Option Levels/Envelopes and click + to add it
  7. Click the settings icon to open the configuration window

Settings

Parameters

General

  • Data source - Choose how the gamma levels are calculated. Options available:
    • Gamma volume (default) - calculates levels based on volume multiplied by the gamma greek, giving you a more accurate picture of actual dealer exposure
    • Volume - calculates levels based on raw options volume, showing where the most contracts are concentrated regardless of gamma weighting
  • Expiration - Filter levels by expiration. Options available: 0 DTE, <= 1d, <= 2d, <= 3d, <= 4d, <= 5d, <= 6d, <= 7d, <= 31d, <= 91d, All expirations. Default is All expirations
  • Include Carry or Open Interest - When enabled, includes open interest carried over from previous sessions into the calculation, giving you a broader view of total positioning. When disabled, only the current session data is considered. Default is disabled

Plot Settings

General

  • Plot mode - Choose how the levels are displayed on the chart. Options available:
    • Levels - plots the gamma levels as static horizontal lines at fixed price points
    • Developing (default) - plots the levels as they develop in real time throughout the session, updating as new data comes in

Extension

  • Extension sessions - Set how many previous sessions the levels are extended across. Default is 3
  • Extension mode - Choose how the level lines are extended. Options available:
    • None (default) - no extension, levels are plotted only for the current session
    • Till interaction - extends the line until price interacts with it
    • Till end window - extends the line to the end of the visible chart window

Label

  • Text size - Set the font size for the level labels. Default is 11
  • Custom header - Add a custom label text to the levels if needed

Subgraphs

Zero Gamma (1)

Zero Gamma is the most important level. It represents the price point where dealer gamma exposure flips from positive to negative. Above this level dealers are long gamma and will dampen price moves. Below it dealers are short gamma and will amplify price moves.

  • Color - Default is yellow/gold
  • 2° Color - Set a secondary color
  • Subgraph Style - Choose between Line or Hidden. Default is Line
  • Auto Color - Options: None, Slope, +/-. Default is None
  • Line Style - Choose between Solid or Dash. Default is Solid
  • Line Width - Default is 1
  • Short Name - Set a custom label for this series
  • Name Label - Toggle visibility of the name label
  • Value Label - Toggle visibility of the value label
  • Name Background - Toggle the name label background
  • Value Background - Toggle the value label background
  • Chart color for marker - Enable to use chart color for markers
  • Include on Auto Center - Enable to include this series in auto centering. Default is disabled

Major Gamma (2)

Major Gamma represents the highest concentration of dealer gamma exposure above the current price. This is where the most significant resistance or support from dealer hedging is likely to appear.

  • Color - Default is green
  • 2° Color - Set a secondary color
  • Subgraph Style - Choose between Line, Hidden, or BrokerLine. Default is BrokerLine
  • Auto Color - Options: None, Slope, +/-. Default is None
  • Line Style - Choose between Solid or Dash. Default is Solid
  • Line Width - Default is 1
  • Short Name - Set a custom label for this series
  • Name Label - Toggle visibility of the name label
  • Value Label - Toggle visibility of the value label
  • Name Background - Toggle the name label background
  • Value Background - Toggle the value label background
  • Chart color for marker - Enable to use chart color for markers
  • Include on Auto Center - Enable to include this series in auto centering. Default is disabled

Minor Gamma (3)

Minor Gamma represents the secondary concentration of dealer gamma exposure. It acts as a softer level compared to Major Gamma and can be useful for identifying intermediate reaction zones.

  • Color - Default is purple
  • 2° Color - Set a secondary color
  • Subgraph Style - Default is BrokerLine
  • Auto Color - Options: None, Slope, +/-. Default is None
  • Line Style - Choose between Solid or Dash. Default is Solid
  • Line Width - Default is 1
  • Short Name - Set a custom label for this series
  • Name Label - Toggle visibility of the name label
  • Value Label - Toggle visibility of the value label
  • Name Background - Toggle the name label background
  • Value Background - Toggle the value label background
  • Chart color for marker - Enable to use chart color for markers
  • Include on Auto Center - Enable to include this series in auto centering. Default is disabled


Example - How to Use Option Levels/Envelopes

Once added to your chart, you will see three types of lines plotted directly on your price chart:

  • The yellow line is the Zero Gamma level - this is the most important level. Think of it as the dividing line between two different market regimes. When price is trading above it, the market tends to be calmer and moves are more likely to fade. When price breaks below it, the market can become more volatile and moves can extend further
  • The green lines are the Major Gamma levels - these act as significant zones where dealer hedging activity is concentrated. Price often reacts at these levels, either finding support or facing resistance
  • The purple line is the Minor Gamma level - this acts as a softer secondary reference zone, useful for identifying intermediate reaction points

A simple way to use this indicator is to note where price is relative to the Zero Gamma level at the start of your session. If price is above it, expect a more compressed market where breakouts may fail. If price is below it, expect more directional moves and be cautious about fading strong moves.

Still Having Trouble?

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