Dealer hedging

Also called Dealer hedge, delta hedging

The stock or index a dealer buys or sells to stay hedged as option deltas change.

When a dealer holds options, the book's delta changes as the underlying moves. Staying hedged means buying or selling the underlying as that delta shifts. That buying and selling is dealer hedging.

Gamma exposure estimates how much of it a 1% move would require. Where that exposure is concentrated, hedging is heaviest, which is why traders often read the call wall as resistance and the put wall as support. It is a tendency. A wall can break, and the hedge can change with the regime.