Dealer Alignment
Canonical definition, formula, interpretation, and API reference.
Definition
Whether max pain, gamma flip, and walls converge. Converging = strongest pin. Diverging = weak pin.
Formula
Classification from relative positions of max pain, gamma flip, call wall, put wall
converging/moderate/diverging/unknown.
Inputs
max_paingamma_flipcall_wallput_wall
Output
alignmentdescription
Interpretation
- Converging: strongest pin signal
- Moderate: partial support
- Diverging: GEX dominates, max pain less relevant
API Reference
Endpoint
GET /v1/maxpain/{symbol}
Tier
Basic+
Response field
dealer_alignment.alignment, description, gamma_flip, call_wall, put_wall
Why Dealer Alignment Matters for Trading
TL;DR
Dealer alignment tells you whether max pain and the gamma flip point to the same level. When they converge, the pin is strong. When they diverge, nothing works cleanly.
- What it measures
- A converging / diverging label computed from the distance between max pain and the gamma flip (and related dealer levels).
- What it signals
- Whether dealer flows reinforce a single target or compete for different ones.
- Why we measure it
- Aligned dealer incentives produce clean setups. Conflicting incentives produce whippy, untradeable tape.
- Who uses it
- Expiry specialists, systematic OPEX traders, discretionary pin traders.
How to read Dealer Alignment
Converging (aligned)
- Max pain and gamma flip within ~0.5% of each other
- Strong pin toward the overlap
- Cleaner OPEX setups
- Higher win-rate short-strangle trades
Good for: pin trades, short premium
Diverging (misaligned)
- Max pain and flip > 1% apart
- Flows pull in different directions
- Whippy, two-way price action
- Low-conviction setups
Bad for: pin plays — favor vol buyers
Mild offset
- Small but visible gap
- Pin still works, weaker
- Size down
- Typical mid-week reading
Partial alignment
Rules of thumb
- Alignment matters most into expiry. Thu/Fri alignment checks filter out low-conviction OPEX trades.
- Check pain curve shape too. Alignment + steep curve = highest-conviction. Alignment + flat curve = OK but small-size.
- Diverging reads often precede regime flips. Misalignment is a warning that dealer flow is in transition.
- Confirm with pin risk score. Alignment is a qualitative filter; pin risk is the quantitative companion.
- Single-stock alignment is noisier than index. SPX alignment is most reliable; single stocks often show spurious divergence.
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