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options mechanicsApril 28, 20261 min read

Market Maker Delta-Hedging: The Mechanical Force Behind Gamma Squeezes

Market makers buy stock not out of conviction, but out of mechanical necessity — delta hedging is the silent fuel behind gamma squeezes.

BeInOptions Team
BeInOptions Team·Options Trading Experts

Market makers buy stock when the price rises — not because they're bullish, but because they have to. That's delta hedging: a mechanical, risk-neutral adjustment of their position.

When retail traders buy call options en masse, market makers become short gamma. That means: as prices rise, they must buy more and more shares to neutralize their delta risk.

This mechanical buying pressure — without fundamental conviction — is the fuel behind many gamma squeezes. Market makers have no choice: they follow the mechanics of their hedging strategy.

The market doesn't just move based on opinions, but also based on compulsion.

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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results.