Dealer Alignment

Q: What is dealer alignment?

Measures whether key options levels point to the same price target. Converging = all forces push to the same zone.

Q: What does converging mean?

Max pain near gamma flip, between walls. All four forces reinforce. Pin probability typically 65+.

Q: Why does Dealer Alignment matter for trading?

Dealer alignment filters OPEX setups into clean and messy buckets. When max pain and the gamma flip line up, dealer hedging flows reinforce a single price target — ideal for short-strangle pin plays. When they diverge, competing flows produce whippy price action that is hostile to short-vol strategies.

Q: When is Dealer Alignment good versus bad for a trader?

Converging alignment is good for short-vol and pin plays — flows align. Diverging alignment is bad for pin plays but can signal a regime-flip opportunity for vol buyers. Mild offset means positions still work but size down. Use alignment as a gate before any OPEX-day short-premium trade.

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.