Hermēs DocumentationGEX 4-Layer Framework · Derived Levels Step 1-4
Hermēs's core knowledge base — from Regime to Flow, layer by layer with Confluence scoring
Why "Four Layers"
Options flow is a massive information lake. If you dump every strike's OI, Gamma, Delta, and Volume onto a chart at once, the result is visual noise.
TanukiTrade's 4 Layers of Market Structure with GEX framework structurally decomposes that information into layers. Hermēs adopts and engineers around it:
Core idea: don't read a single metric — read how many independent indicators light up the same strike (Confluence).
- 1 layer = noise
- 2 layers = Moderate
- 3 layers = Strong
- 4+ layers = Exceptional — top-quality signal
The four layers zoom from macro environment to micro flow, matching different decision time-scales:
| Layer | Name | Time scale | What it tells you |
|---|---|---|---|
| Step 1 | Regime | Whole day | Which "universe" are we in today? (Long / Short Gamma) |
| Step 2 | Structure | Hours | Where is dealer gamma concentrated? |
| Step 3 | Positioning | Hours to days | Where is real money actually committed? |
| Step 4 | Flow | Now / today | Where is active volume hitting right now? |
After this chapter you'll be able to scan a Hermēs chart layer-by-layer and read every glyph correctly.
Step 1 · Regime
"Where price sits vs HVL defines the gamma regime."
What this step answers
Step 1 is macro orientation. You only need to look at one thing: is spot above or below HVL? This binary determines the gravity direction of dealer hedge flow for the entire day.
Core levels
| Symbol | Full name | Meaning | PDF stars |
|---|---|---|---|
cT | Call Transition | Upper transition boundary (call side) | ★★ |
HVL | Highest Volatility Level | Transition epicentre, regime divide | ★★★★ |
pT | Put Transition | Lower transition boundary (put side) | ★★★ |
Two macro regimes
Dealer stance: net long gamma → forced to fade every move
Market behaviour:
- Volatility compressed ↓
- Price tends to revert toward HVL
- Mean-reverting / range bound
Futures trader actions:
- Use range tools: sell at C1, buy at HVL
- Reduce trend adds, beware of false breakouts
- Scalp / pin trade is high yield
Dealer stance: net short gamma → forced to chase every move
Market behaviour:
- Volatility amplified ↑
- Price accelerates away from HVL
- Trend extension / one-way days
Futures trader actions:
- Use trend tools: break P1 / D− → add with the move
- Stops must be tight, size small
- Range tools get chopped repeatedly
Horizontal 6-zone map (by spot price)
PUT SIDE CALL SIDE
←─────────────────────────────────────────────────────────────────→
Neg. Extension │ Negative Gamma │ Lower Trans │ Upper Trans │ Positive Gamma │ Pos. Extension
< P1 │ P1 → pT │ pT → HVL │ HVL → cT │ cT → C1 │ > C1| Zone | Spot position | Gamma stance | Behaviour | Warning |
|---|---|---|---|---|
| Neg. Extension | < P1 | Strong negative Γ | Accelerated decline, gamma squeeze risk | ⚠ Potential structural reset |
| Negative Gamma | P1 → pT | Negative Γ main zone | Trending, dealer-accelerated | — |
| Lower Transition | pT → HVL | Weak negative Γ | Compression, hesitation | — |
| Upper Transition | HVL → cT | Weak positive Γ | Compression, chop | — |
| Positive Gamma | cT → C1 | Positive Γ main zone | Absorbing, mean-reverting | — |
| Pos. Extension | > C1 | Strong positive Γ | Top heaviness, give-back risk | ⚠ Potential structural reset |
Extension Zone warning
When spot lingers above C1 or below P1 → dealers are forced to hedge directional exposure → structural repositioning can trigger; this is the cradle of gamma squeezes.
Hermēs surfaces a ⚠ Extension Warning badge in the Narrative Strip.
Visual representation in Hermēs
- Background gradient: above HVL = light blue (Long Gamma), below HVL = light red (Short Gamma)
- HVL solid line: gold-highlighted, the most important horizontal line of the day
- cT / pT dashed lines: light grey, marking transition boundaries
Step 2 · Structure
"Where dealer gamma mass is concentrated."
What this step answers
Step 2 is structural mapping. Given the regime from Step 1, find where the dealer gamma walls are — i.e. where price will meet the strongest hedge-flow counter-force on the way up or down.
Call-side gamma clusters (outside → inside / higher → lower strike)
| Symbol | Meaning | PDF stars | Hermēs render |
|---|---|---|---|
C6 | Call Wall #6 — outer call gamma | ★ | Blue dashed |
C5 | Call Wall #5 — peripheral | ★ | Blue dashed |
C4 | Call Wall #4 — smaller cluster | ★ | Blue dashed |
C3 | Call Wall #3 — 3rd strongest | ★★ | Blue dashed |
C2 | Call Wall #2 — 2nd strongest | ★★ | Blue solid |
C1 | Call Wall #1 — largest call gamma wall | ★★★★ | Blue bold + pill |
Put-side gamma clusters (inside → outside / higher → lower strike)
| Symbol | Meaning | PDF stars | Hermēs render |
|---|---|---|---|
P1 | Put Wall #1 — largest put gamma wall | ★★★★ | Red bold + pill |
P2 | Put Wall #2 — 2nd strongest | ★★ | Red solid |
P3 | Put Wall #3 — 3rd strongest | ★★ | Red dashed |
P4 | Put Wall #4 — smaller cluster | ★ | Red dashed |
P5 | Put Wall #5 — peripheral | ★ | Red dashed |
P6 | Put Wall #6 — outer put gamma | ★ | Red dashed |
Absolute GEX — total |Call GEX| + |Put GEX| concentration
| Symbol | Meaning | PDF stars |
|---|---|---|
Ab1 | Absolute GEX #1 — highest total gamma concentration | ★★★★ |
Ab2 | Absolute GEX #2 — second | ★★ |
Ab3 | Absolute GEX #3 — third | ★ |
Ab1 is the market's biggest "magnet."
It doesn't distinguish call vs put — it captures "where the dealer's total gamma exposure is largest." Price tends to oscillate around Ab1 because it's the heaviest hedging anchor.
If Ab1 overlaps with C1 or P1 → the strike's importance instantly jumps to ★★★★★.
How a futures trader uses Step 2
Treat C1 and P1 as hard boundaries
Not psychological "resistance/support" — these are physical boundaries of maximum dealer hedge counter-force.
- Price into C1 → dealers forced to sell → upside capped
- Price into P1 → dealers forced to buy → downside supported
Ab1 is the "pivot"
If Ab1 sits between C1 and P1 → an iron-triangle range; price likely chops between the three.
Multiple walls stacked = "skewer"
Hermēs's chart groups close-together level pills (≤10px) horizontally into "skewers". Longer skewer → thicker structure → more attention warranted.
Step 3 · Positioning · OI & DEX
"Where the actual money is positioned."
What this step answers
Step 3 is where real money is committed. Step 2 reads gamma exposure (mathematically derived); Step 3 reads Open Interest (OI) — actual bets in the market.
Open Interest (OI) family
| Symbol | Meaning | PDF stars |
|---|---|---|
nCOI | Net Call OI — strike with max call OI − put OI | ★★ |
COI | Call OI Peak — max absolute call OI | ★★ |
AbOI | Total OI Peak — max combined call + put OI | ★★ |
POI | Put OI Peak — max absolute put OI | ★★ |
nPOI | Net Put OI — strike with max put OI − call OI | ★★ |
DEX (Delta Exposure) — directional sensitivity
| Symbol | Meaning | PDF stars |
|---|---|---|
D+ | Highest Positive Net DEX — max positive Delta concentration | ★★★★ |
D− | Highest Negative Net DEX — max negative Delta concentration | ★★★★ |
D+ / D− flips are "event-level" triggers
When price crosses D+ / D−, dealer hedge flow direction fundamentally reverses → structural repositioning event.
These are among the highest-priority triggers in the Macro Narrative. Hermēs ships a dedicated DEX Flip Alert to Discord.
Step 3's core value
OI confirms or challenges the gamma wall
C1 (a gamma wall) with COI alongside → structural reinforcement (both gamma and real money). C1 with no OI → could be a "ghost wall" (gamma math says yes, participation says no).
AbOI = "strike the market cares about most"
It's not "which side is winning" — it's where everyone (call + put) has piled in. Often a key narrative focal point (e.g. 5950 as a psychological round number).
Net OI reveals directional bias
- High nCOI → market net long calls → bullish sentiment concentrated
- High nPOI → market net long puts → bearish sentiment / hedging demand
Step 4 · Flow · Today's volume
"What's happening RIGHT NOW."
What this step answers
Step 4 is real-time activity. Step 3 reads what's already committed (cumulative); Step 4 reads what's actively trading today.
Today's volume family
| Symbol | Meaning | PDF stars |
|---|---|---|
nCV | Net Call Volume — strike with max call vs put net volume | ★ |
CV | Call Volume Peak — most active call traded strike | ★ |
PV | Put Volume Peak — most active put traded strike | ★ |
nPV | Net Put Volume — strike with max put vs call net volume | ★ |
Flow has a low standalone star count (★), but its "amplification" weight is high
Flow data is limited on its own (high volume doesn't imply correct direction), but its purpose is to time-stamp the static structure:
A level paired with fresh volume = participants are actively adding here = the level is valid today
Positioning + Flow on the same strike = highest-quality Confluence signal.
Step 4's tactical use
| Situation | Interpretation | Action |
|---|---|---|
| C1 + COI + CV on same strike | Structure + Positioning + Active flow stacked | Highest quality upside resistance, focus here |
| P1 with POI but no PV | Structure exists, positioning exists, but no one trading today | Today's effectiveness reduced, possible breakdown |
| Ab1 with sudden nCV | "Magnet" + today's net call inflow → bullish | Price may converge to Ab1 then push higher |
| D− with nPV | DEX boundary + net put volume → downside momentum | Prepare for Short Gamma trend acceleration |
Current implementation status
CV / PV / nCV / nPV currently require a GEXBot Quant+ subscription or self-built OPRA tape feed.
Hermēs Free / Pro doesn't show raw Flow data directly — use the HuntingFlow main panel's DEX Flow + Net GEX cards to read the equivalent positioning signal.
Confluence · Multi-Layer Scoring
This is the final output of the entire 4-layer framework.
Scoring rules
Confluence = the count of "independent indicators" lit up on the same strike
| Count | Tier | Meaning |
|---|---|---|
| 2× | Moderate | 2-layer confluence — possible reaction zone |
| 3× | Strong | 3-layer confluence — significant structural participation |
| 4+× | Exceptional | 4+ layer confluence — heavy attention, top exposure cluster |
What counts
Countable: HVL, C1-C6, P1-P6, Ab1-Ab3, COI/POI/AbOI/nCOI/nPOI, D+/D−, CV/PV/nCV/nPV
Not countable: cT and pT — they're HVL-derived logical boundaries, not mass-based levels
Classic example — Exceptional Confluence
C1 + Ab1 + COI + nCV = 4× Exceptional ConfluenceMeaning:
- C1: dealers have heavy gamma at this strike (structural attention)
- Ab1: total gamma concentration peak
- COI: position concentration (heaviest market commitment)
- nCV: today's net call volume peak (active accumulation)
→ 4-layer structural participation = lit across regime / structure / positioning / flow = structural heavyweight zone.
How Hermēs UI shows it
Each strike's pill prefixes the Confluence count as ★ stars:
- ★ = 1 layer (single indicator)
- ★★ = Moderate
- ★★★ = Strong
- ★★★★ = Exceptional
Important: PDF stars ≠ Hermēs UI stars
- PDF stars: each level's intrinsic structural weight (e.g. C1 is ★★★★ by itself because it's the largest call wall)
- Hermēs UI stars: the Confluence count at that strike (dynamically aggregated)
Complementary but distinct concepts.
The Quick 4-Step Scan Routine
Every time you open Hermēs, run this 4-step standard scan:
Step 1 — Read HVL, set regime
- Find HVL (gold solid line)
- Is spot above or below?
- Above → Long Gamma → range / reversion tools
- Below → Short Gamma → trend / breakout tools
If spot crosses cT / pT → you're in a transition zone, observe before trading.
Step 2 — Mark C1 / P1 / Ab1, set structure
- C1 is the upside cap, P1 is the downside floor
- Ab1 is the pivot, price likes to return to it
- Count how many walls cluster tightly (length of the "skewer")
Step 3 — Check OI and DEX for confirmation
- Does C1 overlap COI? Yes → structure reinforced
- Where are D+ / D−? Crossing either → prepare for direction reversal
- Does AbOI sit in a transition zone? If yes → that zone is a medium-term focus
Step 4 — Check Flow for "today's activity"
- Are CV / PV on the same strike as C1 / P1? If yes → today's validity is highest
- nCV / nPV skewed materially long/short? Sets the day's tilt
- If Free / Pro can't see Flow → read the HuntingFlow DEX Flow + Net GEX cards for the equivalent
Finally — read Confluence stars
Which strikes are ★★★★ (Exceptional)? Those are today's top-quality reaction zones — write them on your trading plan and wait for price to arrive.
Three Common Misconceptions
Misconception 1: 0Γ and HVL are the same
False.
- 0Γ = strike where Net GEX = 0 (dealer net-gamma flip point)
- HVL = strike at the peak of the Net GEX curve (regime epicentre)
They're usually close but not identical. The PDF Layer 1 framework formally uses HVL; Hermēs keeps 0Γ as an auxiliary reference line.
Misconception 2: cT / pT count toward Confluence
False.
The PDF states explicitly: cT and pT are HVL-derived "computed logical boundaries," not mass-based levels. Hermēs strictly excludes them from Confluence scoring.
Misconception 3: Walls never break
False.
Walls are reaction zones, not guaranteed reactions. With low confluence (only 1 layer), macro shocks (CPI / FOMC), or liquidity vacuums (after-hours), walls can be steamrolled.
Post-break: price enters the next zone, dealers re-hedge from a new posture → typically a 20–30-minute "recalibration window."
Chapter Summary
Four layers = four independent information dimensions
Regime (environment) → Structure (map) → Positioning (commitment) → Flow (action)
A single layer is noise — Confluence is signal
2 layers = Moderate, 3 = Strong, 4+ = Exceptional
HVL = universe divider, C1/P1 = hard walls, Ab1 = magnet, D+/D− = reversal triggers
Remember these five "main characters" and you'll cover 90% of trading decisions.
cT / pT don't count toward Confluence, but they help identify transition zones
Entering a transition zone → reduce size, wait for a decisive break.
Next chapter: ground this knowledge into Hermēs's actual UI: how to read the chart, how to subscribe, how to use desktop integrations.