What is a put wall?

Why the put wall supports price

Heavy put open interest at a strike leaves dealers long gamma there. As price falls toward that strike their hedges force them to BUY the underlying into the decline, and that mechanical demand is what tends to slow a sell-off right at the wall. It is the down-side counterpart of the way the call wall bleeds off a rally.

Like the call wall it is a pressure zone, not a floor. Repeated defences of the level confirm the wall; a decisive break below it removes that support and opens the path to the next wall down.

How the wall moves

The put wall migrates with positioning and expiry. A put wall that sinks through the session warns that support is giving way — dealers are chasing the strike lower — while a wall that holds as price probes it marks a firm floor. As with the call wall, the DRIFT is the tell.

How traders use it

The put wall gives a decline a natural target and a natural place to look for a bounce. In a positive-gamma regime a tag of the wall is a common mean-reversion long setup; a break below it, especially into negative gamma, is a warning that hedging may start to amplify the move instead of cushioning it.

FAQ

What is a put wall?

It is the strike with the most dealer positive gamma at or below spot — the level where hedging most strongly resists further downside, so it often acts as support.

Why does the put wall act as support?

Dealers long gamma at that strike must buy the underlying as price falls toward it, and that mechanical demand tends to slow the decline right at the wall.

What happens if the put wall breaks?

A decisive break removes that concentrated support and shifts focus to the next wall down; if it breaks into a negative-gamma regime, hedging can start to accelerate the move lower.