A wall is a strike price where price often stalls, and knowing why lets you stop treating every stall as a mystery. After reading this you can judge whether a chart that "keeps bouncing off a level" reflects hedging mechanics rather than conviction, and you can refuse commentary that treats a wall as a forecast.
What they are. An option's seller takes on an obligation: the seller of a call must sell shares if assigned, the seller of a put must buy them [1]. The professional dealers on the other side of most of this business do not want that directional exposure, so they hedge in the stock itself. How much they must adjust that hedge as the stock moves is gamma, the rate of change of an option's delta for a one-dollar move in the underlying, and gamma is typically highest for at-the-money options near expiration [2]. Open interest tells you where the outstanding contracts sit, broken down by puts and calls, strike and expiration [3]. Where a large amount of open interest stacks at one strike, dealer hedging concentrates there too. A call wall is a strike heavy with call open interest; a put wall is the same in puts.
Why they matter. When dealers are long options at a strike, their hedging leans against the move: as price rises toward the wall they sell stock, as it falls they buy. That is why price can stall or "pin" at a strike, an effect the industry knows well enough to name pin risk, the uncertainty created when a stock closes at or very near a strike at expiration [4]. When dealer positioning flips the other way, the mechanics reverse and hedging can accelerate a move instead of damping it. The effect is strongest into expiration, when gamma peaks, and fades once the contracts roll off [2].
How the Desk uses them. We compute a nightly and at-close read of dealer gamma and delta positioning for the index funds and the names we cover, and it is fenced off from every trading path by a hard rule in the code itself: no committee, scanner or executor reads it [5]. Our own method notes say why: a dealer-positioning flip level "reads like a signal and is one," which is exactly why we refuse to trade on it [5]. In our pieces, walls appear as context around a move, never as the reason for one.
What this cannot tell you. A wall measures where hedging obligations sit, not what buyers and sellers believe; open interest is a count of outstanding contracts, not a direction [3]. The reading is a snapshot, already hours old by the time anyone sees it, and positions change intraday. Which strikes count as "walls," and the flip level itself, are our own model conventions, not a market standard. The most common wrong reading is treating a wall as support or resistance that must hold: it is a friction, it moves with the open interest, and at expiration it disappears.
Receipts. [1] FINRA, Options investor page: call and put sellers' obligations. [2] Same page, The Greeks: gamma definition; highest at-the-money near expiration. [3] Same page, Key Terms: open interest. [4] Same page, Risks: pin risk. [5] The Desk's dealer-positioning method notes: context-only feed, excluded from all trading paths.