Trading a Gamma Flip Break: The Regime Change
A break of the gamma flip is a regime change rather than an ordinary level break, and regime changes produce the largest moves available in a session.
What happens when price breaks below the gamma flip?
Breaking below the gamma flip moves dealers from suppressing volatility to amplifying volatility. Hedging flow that was absorbing declines begins adding to declines instead, which is why the move immediately after a gamma flip break is frequently the fastest of the session.
How does the Obsidian desk trade the flip break?
The Obsidian desk waits for an established break rather than the first touch, because the flip level is tested and rejected often. Once acceptance below the level is confirmed, the desk trades continuation with trailing exits toward the next major put wall beneath.
What is the danger in the gamma flip trade?
The danger is a false break, because the flip level attracts probing and reverses sharply when the probe fails. A trader entering on the first touch is positioned for the regime change that most often does not actually arrive that session.