--- title: "What is a gamma squeeze | RupeeCase" description: "A gamma squeeze is a story in which dealers who are short calls buy the underlying as it rises, which pushes it higher and makes them buy more." source_url: "https://www.rupeecase.com/learn/questions/what-is-a-gamma-squeeze" --- The index close through the June 2026 expiries is a daily path, and the path alone does not test a squeeze Index close, NIFTY 50, daily, from 1 Jun 2026 to 31 Jul 2026, with the 16 Jun and 30 Jun 2026 expiry days marked. Source: NSE end of day data, computed by RupeeCase. As of 31 Jul 2026. The story runs like this. Buyers take short dated calls, dealers sell them, the dealers hedge by buying the stock, the price rises, and the rise raises the delta of the calls, which forces more buying. As arithmetic, the loop is real. A dealer short calls buys into a rally, and the hedge flow grows as the price moves toward the strike. On the Nifty the arithmetic meets three limits. The index is a basket of fifty stocks, so one flow in one option has to move all of them, and futures and arbitrage trades can absorb part of it. Index option writers are many different desks and investors, and many of them hedge with futures and other options, so there is no single dealer buying the index. And the loop has to keep going. A hedge bought on the way up is sold on the way down, so the flow can reverse as easily as it reinforces. Squeeze stories also leave out frequency. A squeeze needs a large move in a short time and a run of hedging that does not reverse. The question a claim needs to answer is how often that happened, on which expiry, and what followed. The chart shows the index close through the June 2026 expiries: a daily path, with the two expiry days marked, and nothing in the path that identifies a loop by itself. The story is often told about single stocks with heavy call buying, which is a different test from an index of fifty stocks. Treat a squeeze claim on the Nifty as a model to test, starting with the close on each expiry against the close before it. **Before you trade.** Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. [Read the SEBI study](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html) What is a gamma squeeze?A gamma squeeze is a story in which dealers who are short calls buy the underlying as it rises, which pushes it higher and makes them buy more. The loop is real on paper, but it needs a large move that hedging keeps feeding, and a daily index path cannot show that on its own. LGo deeper ## Where Learn teaches this. [Go deeperGamma exposure: the computation and its assumptions10 min, Advanced](/learn/path-15/module-15-9-gamma-exposure-gex)[Go deeperGamma: why it grows so fast near expiry8 min, Intermediate](/learn/path-14/module-14-11-gamma) SSources ## Go to the source. 2 sources, NSE the most cited The publisher of each source listed below. Source: Module undefined source list. 1. [NSE, equity derivatives contract specifications (expiry, settlement, exercise and lot size rules)](https://www.nseindia.com/static/products-services/equity-derivatives-contract-specifications) NSE 2. [SEBI investor education, Understanding derivatives](https://investor.sebi.gov.in/understanding_derivatives.html) SEBI ?Questions people ask ## Related questions. 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