Put Support Level

Put Support is the strike price with the highest net put gamma exposure. It identifies a zone where dealers are most exposed to puts—and are likely to hedge heavily as price approaches.

On the Net Gamma Exposure Chart, Put Support is shown by the widest red bar—indicating a dense buildup of put gamma at a particular strike.

Here’s how it impacts market behavior:

• As price moves down toward Put Support, dealers who are short gamma due to sold puts must sell the underlying to stay delta neutral. But when price nears the strike, put holders often begin to monetize their positions.
• As puts are closed or profit is taken, dealers unwind their short hedges. This creates buying pressure, often causing prices to bounce.
• In a weak market, traders may roll puts to lower strikes, shifting PS down. Dealers then begin to hedge lower levels, applying renewed selling pressure.

Put Support acts as a structural floor—not based on price history, but based on where the hedging behavior builds up or unwinds.

We have created a Video Tutorial to show you how to use and trade the Put Support Level.

How to Trade the Put Support Level

Let’s walk through two high-probability scenarios for trading Put Support (PS)—a bounce and a breakdown.

Put Support Bounce

The first scenario is the Put Support bounce.

What’s Happening Behind the Scenes?

• Dealers Are Short Puts. Dealers who sold puts are now short gamma and hedging that exposure by selling futures as price drops.
• Put Holders Start Closing. As price hits PS, put holders begin monetizing or closing their positions—especially if they were hedging downside risk and now want to lock in profits.
• Dealer Hedge Unwind = Buying. As those puts are closed, dealers no longer need their short futures hedge. They buy to unwind their position, creating real buying pressure in the market.
• Flow Shifts from Selling to Buying. The net effect is a reversal in dealer flow: instead of selling into weakness, they now buy into weakness as their gamma exposure shrinks.
• Price Bounces off the Structural Floor. This shift in hedging behavior, combined with exhausted sellers, often results in a sharp intraday bounce—especially if the Matrix confirms a shift to neutral or bullish flow.

Put Support bounce setups aren’t about hope—they’re about recognizing when dealer hedging pressure is reversing. You’re not just buying support… you’re trading the unwind of short futures flow.

Here is an example trade.

Put Support Breakdown

Now let’s look at another scenario: the Put Support Breakdown.

What’s Happening Behind the Scenes?

• Put Holders Roll Down. As price drops toward Put Support, traders holding puts often roll their contracts to lower strikes to maintain downside exposure. This creates new put open interest below Put Support.
• Dealers Add New Hedges. Since dealers are typically short these new puts, their delta exposure increases. To remain delta-neutral, they must sell more of the underlying asset (e.g., futures). This adds fresh mechanical selling pressure into the market.
• Gamma Goes More Negative. As these new puts come into play—especially near expiration—gamma turns more negative, meaning dealers hedge with the move. More downside → more dealer selling.
• No Bounce on Retest = Flow Failure. Once PS breaks, price may retest the level. But if buyers fail to reclaim Put Support, and flow remains bearish, this confirms the level has structurally failed—and triggers trend continuation.

Here is an example trade.

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