How Can Options Traders Use the “Greeks” (Delta, Gamma, Theta, Vega) to Anticipate Potential Gamma Squeezes?

Traders can anticipate gamma squeezes by monitoring the Greeks. A large concentration of short-dated, out-of-the-money call options indicates high potential gamma.

If the "gamma exposure" (GEX) of dealers is heavily negative, it means they have sold many calls and will be forced to buy the underlying asset if its price rises. High vega can also signal that a spike in implied volatility will have a large impact.

By watching for a buildup of negative dealer gamma and unusual call volume, traders can identify conditions ripe for a squeeze.