# Gamma Squeeze

*Derivatives & Options — Finicade finance glossary*

A gamma squeeze is a feedback loop where heavy call buying forces dealers to hedge by buying the underlying, pushing the price up and forcing more buying.

A gamma squeeze is a feedback loop in which heavy call buying forces dealers to hedge by buying the underlying, pushing the price up and forcing them to buy still more. It's mechanical rather than sentimental: the dealer is short gamma and must chase. Combined with a small free float and a crowded short base, it produces the violent, fundamentals-free rallies seen in meme stocks — and unwinds just as fast when the options expire.

**Also known as:** gamma squeeze meaning, dealer gamma

**Related terms:** [Gamma](https://finicade.com/glossary/gamma), [Delta Hedging](https://finicade.com/glossary/delta-hedging), [Short Squeeze](https://finicade.com/glossary/short-squeeze), [Open Interest](https://finicade.com/glossary/open-interest), [Market Maker](https://finicade.com/glossary/market-maker)

Source: https://finicade.com/glossary/gamma-squeeze