 Hello everyone. Welcome to Options with Doug. Streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 p.m. Eastern Time. Before I get started, I need to go through the Disclosures. General Disclosure. All Bookmap limited materials, information and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk Disclosure. Trading futures, equities and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. As a reminder, the focus of my presentation is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading. The first is planning and I use positional analysis. I look at how traders and market makers are positioned in the options market and how those positions change from day to day to help develop a thesis regarding expected volatility and trading range for the day as well as a directional bias. And the second step in my process is execution. And I look at real-time order flow in Bookmap and real-time market maker hedging flow in SpotGamma Hero to confirm my thesis and for setups for entries and exits. I think this is a new way of looking at the market that provides a significant edge. And questions and comments are welcome and I will be watching the options with Doug, Chat Channel, and Discord as well as the chat and YouTube for questions and comments. So again, your questions and comments are welcome. All right, let's get started. So today I want to talk about news items, economic data, events, and earnings. And there was a discussion at Discord yesterday about whether stocks or options were driving the market. And I just want to talk about that briefly. And then we'll go through our positional analysis. And if we have time, we'll talk about setups. And remember, the FOMC announcement is at 2 p.m. So we'll watch the ES futures at that time. Okay, so first of all, news. Let's go here. News, economic data. There was some economic data that came out this morning. This ADP report. I think that comes out at 8.15 a.m., something like that. There's the ADP report. That's kind of a precursor to the employment situation report on Friday. And the next was the U.S. manufacturing PMI at 9.45 a.m. Eastern time. And it came in about as expected, just slightly better, but still less than 50, so still in the range of contraction. And then at 10 a.m., there was more ISM, manufacturing PMI, that came in a little bit worse than expected, still less than 50, so still showing contraction. So that is the data that came out this morning. And then just as a reminder, tomorrow, oh, I'm sorry, on Friday is the employment situation report. Again, the FOMC this afternoon. We'll take a look at that. And then earnings. AMD reported yesterday and was strong this morning. Meta reports this afternoon. And then tomorrow is the big day. Apple, Amazon, and Google all report after the close tomorrow afternoon, Thursday afternoon. Okay, regarding the Fed, let's take a look and see what traders are expecting ahead of the announcement. So it's really has not changed. And the current, the Fed funds target rate current is 425 to 450. And their traders are pricing in a 98.4% chance of a 25 point basis hike to 450 to 475. So that's what traders are expecting. Okay, so that's the news. Again, we're going to go over the volume, positional analysis and setups. Okay, let's take a look now at something that I posted in discord this morning. We bring this up. And again, there was a discussion about stocks versus options driving the market. And this is option stats for spy from thinkorswim for yesterday. And the thing that I'm focusing on is this total volume. So this is the total volume of contracts, spy contracts that traded yesterday. So that's about 7.69 million. And remember, each contract represents 100 shares. So doing the math here, that comes out to 769 million shares. And if we let's let's make a conservative assumption that those options traded at a point five delta. So that would have the effect of cutting this in half. And that would still be 384.5 million shares. And the volume of spy shares that traded yesterday was about 86 million. So I guess you do the math. And I, you know, that's this is one reason what are many reasons why I believe that options are a key driver of price action in in many stocks and futures. Okay, let's go through our positional analysis now. And I'm going to let's go to book map. And the first thing that I want to take a look at is a bigger picture view. And this is the SPX. And this is in thinkorswim showing the key levels from spot gamma. So here's the put wall at 3800 below than the call wall at 4040 100. And here's the 4000 level. That's the absolute gamma strike. So the for the put wall is a strike with the largest net negative gamma. And that can be expected to act as support. And the call wall is the strike with the largest net positive gamma. And that can be expected to act as resistance. And then the 4000 level again, that's the absolute gamma strike. And that's the strike with the largest absolute gamma. So we can see here that there really has not been a lot of movement today in SPX. And that'll change in about 20 minutes when the announcement comes out. So right now the levels immediately below of this are the 4050 level that's an L2 level. Meaning it's the highest would be a most important level would be an L1 level one gamma level. So 4050 is an L2 level. And then there's the call wall, the L1 level and the combo L1 level above. So that's a bigger picture view. That's a one hour chart. And let's take a look now at a one minute chart. One reason I'm looking at this is just because of the clarity. It's just showing price and levels. So again, the so far today this 4050 level has acted as support. And there's some overhead before the 4100 level. And one other thing to note are these two pivot levels. This is what excuse me, these levels were noted in the AM founders note as a pivot level. And before I so one thing I want to clarify what I'm looking at on the chart here. This is spot gamma cloud notes. And these low notes are provided to spot gamma subscribers. They're updated automatically every day. And they primarily are showing SPX levels converted to an equivalent ES level. So right now spot gamma is using a 15 point difference. So they're adding 15 points to the SPX level to come up with an equivalent ES level. And the last time I looked it was a little bit less, but 15 is is close enough. And then this is my this is my cloud notes level. And here I'm showing the levels that are in play right now are these pivot levels. These were indicated in the again at the spot gamma AM founders note. And I'll show you why they were whether the I why I think they were noted that way. So let's take a look at this is the spot gamma equity hub. And this is a composite view chart. And this chart can be a little bit difficult to interpret. And what it's showing is this spot gamma momentum indicator that is the vertical axis with price on the right. And the red area indicates an area put dominance negative gamma. That's the market makers gamma notional negative gamma. So below 4000 and positive gamma or call dominated gamma above 4000. And let me just hover over here. And I think this is where this pivot level comes from. So right here is 4065. And there's 450. And the thing to note here is this SG momentum indicator. It's showing a shift in gamma. And this can be equated to a shift in volatility. So the thing here to note here is as price moves below this pivot area, volatility can be expected to increase. And that would be a market makers hedging activity as well. So driving that higher. So I think that's where that that comes from this morning. Okay. So those are the levels that are in play. Let's go back to book map. Those are the levels in play. And we'll talk about setups in just a few minutes. And let's take a quick look at the S&P 500 gamma charts. And these are the absolute gamma charts. This is for the S&P 500. And there were no shifts in the key levels overnight. Other than the volatility trigger, there was slight slight shifts in the volatility triggers for SPX and SPY. So the SPX volatility trigger shifted down from 4025 to 4020. And the SPY volatility trigger shifted down from 403 to 402. So minor shift in the volatility trigger. Otherwise, no shifts in the put wall call wall or key gamma strike for SPX, SPY and QQQ. So the levels, and we already saw this on the larger timeframe SPX chart. Here's the 3800 put wall. Again, the strike with the largest net negative gamma, the 4000. And that's the absolute gamma strike, the strike. And that's very obvious the strike with the largest absolute gamma. And there's the 4050 level that's been in play today. And then there's the 4100 level, the strike, the call wall, the strike with the largest net positive gamma. So that's the SPX SPY. There's the 400 key gamma strike or absolute gamma strike. And the thing to notice here is all the put gamma. And that's shown below the zero line. That's put gamma or negative gamma shown with the teal bars and the call gamma above. And those are shown, that's shown by the black bars. That's positive gamma. So notice the, again, there's the 400 level. 390 is the put wall. And 410 is pretty obviously the call wall. And notice there has been some building comma call gamma at the 420 level. So a lot of positive call gamma above 400 and negative put gamma below 400. Let's take a look at the NASDAQ charts. So this is for QQQ. Here's the 280 put wall, the 290 key gamma strike, and then the 300 call wall. Alright, let's take a look at data. Let's take a look at data. And here is, this is gamma notional. This is market makers position on the gamma curve. And the left column is SPX. And then for all these that they have shifted, gamma notional has shifted to more positive or less negative. So yesterday, gamma notional for SPX was minus 101. And today it's positive 331. Yesterday, spy gamma notional was minus 1137. And today it is minus 497. And yesterday, for QQQ, gamma notional was minus 275. And today it's minus 84. So slightly positive for SPX, still negative for spy, and pretty much neutral for QQQ. So what this means is I take this as fairly neutral. In a negative gamma environment, market makers have to hedge with price action to hedge their delta exposure. So that's negative gamma. In a positive gamma, market makers have to sell futures as price increases to hedge their delta exposure. So in a positive gamma environment, they are trading against price. And in a negative gamma environment, they are trading with price to hedge their delta exposure. So in a negative gamma environment, you expect more volatility. In a positive gamma environment, you expect less volatility. All right, let's take a look at the Vana models, which illustrate this graphically. So here's SPX. And this slope from slope up from left to right is typical for a positive gamma environment. Again, this is showing market makers delta exposure will increase as price increases. So they will have to sell futures to hedge their delta exposure as price increases. And the green line is showing the current expiration. And that is also showing how market makers delta notional changes with changes implied volatility. And that's the Vana effect. And Vana is the change in delta with a change in implied volatility. And the black line is showing how market makers delta notional changes would change as time passes. And that's the delta effect delta charm effect. And charm is the change in delta as time passes. So slightly positive recipe X still negative for spy and neutral for QQQ. Okay, that's the that's the landscape for today. And one last thing I want to take a look at this is my key gamma strike list. And I tracked this every day for all the stocks of my watch list. And I tracked the current key gamma strike. And I compare that with the previous key gamma strike. That's from yesterday. And I color code these red means it decrease from the previous day. And green means it increased. So yesterday you can see there was a lot of a lot of falling key gamma strikes. And then some of them have gone back to increasing today, Tesla, Microsoft, IWM, Disney and AMD. Okay, so today there was really no point in developing a thesis with the FOMC announcement coming out in about five minutes now. So you know, otherwise, I would take this is probably slightly, slightly bullish. Given this increase in the key gamma strike, AMD reported results yesterday and they market interpreted that as positive. Alright, let's take a look at let's take a look at the S&P 500. And just want to point out a couple of setups from this morning. Gonna zoom in on this area right here. And let's go take a look at hero. So here's ES. And this is a combined signal of SPX and spy. So it's showing options trades for SPX and spy into one combined signal. So the first thing is the confirmation of the move higher. So this is showing first thing in the morning, traders were taking positive delta positions as price increased. And that helps. I think that supported the move higher. Then as price increased, they started taking negative delta positions. And that confirmed the move lower. And then notice here, again, as price moves down, traders start taking positive delta positions. And then price increases later. So that was a nice divergent setup. So two confirmation setups both higher and lower. And then the to move higher around 11am. And let's go back and take a look at. Let's go back and take a look at book map now. So here's the first setup. And the thing that I noticed, I'm going to zoom in on this just a little bit more. Notice all of the pink dots here. And there were some cell stops shown by these small red dots. And then for the time, a fairly large iceberg. This five five transactions of iceberg orders, and price starts to move higher. Again, remember that traders were taking positive delta positions to expand this a little bit. So there's the first setup long by stop order shown by the rising line, yellow line. And then the divergent setup lower, or the confirmation setup lower. And then there's the let's zoom out. And there's the 11am setup reversal higher at the 4050 pivot level. And notice this short setup here and all the pink dots coming in. Okay, we've got about a minute and a half, I'm just going to hold and wait here. So let's see, let's go back to hero. And I'm going to change this to a shorter look back period. The reason I did this is because the hero line had somewhat flat lined, and we'll watch what happens after the announcement. And one thing I want to point out while we're waiting on this is the remember the gamma notional has increased to more increased to positive for spx and less negative for spy. And I interpret that is a a lack of van a fuel for a an extended put Vanna rally. I think a lot of the a lot of the rally a lot of the expectation for the Fed has pulled been pulled forward by this strong rally in January. Okay, and here we go. Alright, so the increase was 25 basis points. And recall the the 4065 to 4050 pivot level with the idea that if if price drops below the 4050 level, then volatility could increase as the rate of change of gamma increases. Get a closer look at that. So I see yellow line dropping cell stop cell stops, and then the light blue dropping indicates that there are some large iceberg orders selling this large traders with iceberg orders selling this. Let's see what options traders are doing. I'm going to zoom in here. And let's go back to a let's go back to a 10 minute look back period. So hard to tell much so far, but it looks like they are. They're selling this taking negative delta positions. Let's separate out puts and calls. So they're buying puts. That's shown by the falling blue line. Okay, there are a couple of comments in YouTube. Good thing it wasn't 50. Yes, I think the market was absolutely expecting 2025 we saw that with a 98.4% chance of 25 basis point increase. And the market was certainly not prepared for 50. And 40 D Rover also a 40 D Rover hope I'm presenting that are pronouncing that correctly. Go down to the minute shows better. So we'll try that. Yeah, I normally don't look at that hero. It's such a small time frame. That's just a little bit too noisy for me. Let's change it to five minutes. So they started buying calls is as price dropped. Now it looks like they may be starting to sell puts. So we're on a it's Dave. Okay. Alright, I'll remember that. Let's go back to book map. We'll watch this for a few minutes. And then there were some good setups this morning that we can go over. Let's go back and check hero. I'm going to go back to the total signal. So it looks like traders are taking positive delta positions shown by the rising purple line. I'm going to zoom out and look at the whole day. Pretty narrow trading range for today from about 4060 to 4090. And calm, you're welcome. I don't know, there's not a lot I can provide today that I think the planning was helpful today and that watching watching hero will zoom in on this again looking more looking more bullish now. Let's go back to back to hero. Now looks like traders are starting to fade to move again. Now hero shifts shifts up again. Let's go back to book map. Let's just take a look at spy. See what's going on there. And some resistance at the point of control. That's this purple line here. And the reason it's the point of control is this large volume right here that came in about 942. Not sure why might have been some trader large trader trader or traders taking position right before the data. We'll go back to ES see what options traders are doing. And now they're fading the move. This is very typical behavior of S&P 500 options traders. So let's see what happens if price responds. Some smaller iceberg orders sell iceberg orders. Certainly not enough to move the market. And there is some some commentary and YouTube. Yeah, Alpham seed price moves fast. And, you know, a lot of traders do like to trade that trade CPI FOMC things like that. You just have to be fast and know what you're doing. And there's a comment in YouTube book pap is much hard to learn. It Yeah, it is. But once you learn, learn how to read book map, it provides so much more information than a than a candlestick chart. And book map provides a ton of great education. And part of that is my webinar here. And I agree. Dave says I've spent months learning book map and spot gamma. But once you get it, it's gold. Definitely. It's book map and spot gamma provide everything I need to know to trade. Let's go back and see what options traders are doing. So still fading the move, buying puts selling calls. And just so everybody's clear, the white line here is price. And the purple line is combined options trades for spy and SPX. And it's going to be mostly spy. So still waiting to see if price responds to these options trades. Go back to book map. So pride it prices right at this 4065 pivot level. Looks like it's trying to go lower. And not there's not much clarity from order flow really the stops and icebergs. These numbers are very small. Stop orders sell stops. It's a buy iceberg, or sell stops. Double digits very small. A lot of pink dots coming in there. There's price made a series of lower highs. And recall from this morning, this reversal lower right here, and how volatility increase price got going. All the pink dots there all the aggressive market sell orders, and then some larger stops, feeling that move lower. We can see here by the larger number of stop orders. Let's go back and look at hero. So options traders definitely gave us a leading clue here as to this move lower. And we don't know how long it'll last. So this combined with so watching hedging flow, giving us a leading indicator. Traders options traders fading that move. And the looking at book map. Watching the order flow series of lower highs series of tests of this 4065 pivot level. And then vice price finally breaks lower. Now that might only be a scalp. But I would certainly look at the 4050 level as a potential target. But it does look like some by iceberg orders coming here small. Coming in at this 4070 level. And there's a question in YouTube, which is the best data feed for book map. And I use rhythmic for futures that's available in the book map marketplace. And I just use the CME package, which includes ES, NQ, currency pair currencies, like the euro, the pound. And it may include RTY to I'm not sure. I just I just have ES and I, I'm primarily interested in ES. And that's what I trade. I have NQ as well. But so that's for futures. And the advantage of rhythmic as it provides MBO data, market by order data. And that is what that's required for this, these stops and icebergs, these indicators, which are just invaluable for trading. So that is for that's for futures, rhythmic data. And the for stocks, I use DX feed. And I've used this for a long time. It's very stable, very reliable. So that's what I use in the most traders that I know, book map traders, this is what they use DX feed for stocks and rhythmic data for futures. All right, so let's see if options traders have have turned this around. And yeah, they did. So more of a confirmation there, not much of a lead effect, like this short setup at the 4065 level, maybe a slight divergence here, but not much. Let's go back to book map. Let's go back and look at hero. So now options traders are fading that move again. No lead just a confirmation. And I've got got about five minutes left. Let's I'm going to take a look at a couple of other setups this morning. So first here is AMD five minute look back period. Let's change to one day. So there was a good strong setup this morning, traders buying calls after the earnings. You can see that by the rising orange line. Let's go take a look at book map AMD strong rally. Notice all the green dots here this morning. Up past the AD call wall, which did increase from yesterday. Remember that AMD was one of the green numbers. And the key gamma strike list and AMD continues to rise. Not much reaction to the FOMC announcement. And in YouTube room vast you need rhythmic for MBO no other data feed works for MBO that's correct. If you want to use the stops and icebergs indicator in book map, you need rhythmic data, which is the only data provider that I know of that provides MBO data. And that MBO data market by order data comes directly from CME. But again, rhythmic is the only only data provider that is providing that data. Also, we can take a look at Nvidia, which is also up today in sympathy with AMD. And not a whole lot of reaction to the FOMC continues to rise. And interesting to note all the pink dots coming in. Starting about here, let's just take a look at the cumulative volume delta. Moving lower all day. Let's take a look at hero. First of all, notice the strong hero signal here for AMD. Kind of a middle, medium signal hero signal for Nvidia traders are buying calls. Notice the rising orange line shown here in the morning. Let's go back and we'll we'll rack it, wrap it up with the ES again. Go back to our five minute look back period. Zoom in. And we'll go back to book map. And Ruma asked, but you are limited to the only futures with rhythmic. And yes, that is correct. And I don't know of any single data feed that provides both stock and futures data. So you need typically need separate data feeds for futures and for stocks. And again, I'm using DX feed for stocks and rhythmic data for futures. And that's what I've been using for quite some time. And I'm happy with both of those data feeds. And I think that's what many other book map traders that I know, that's what they use. So here is the S&P 500 ES futures. One thing I want to point out is, you know, I'm jumping from screen to screen here. So now the press conference is starting. I'm jumping from screen to screen here. But normally, I have two screens, actually, I have two computers, one screen on one computer, and two screens on the other. So I'm looking at either two book map charts on one computer or and hero on the other chart or hero on one chart, and something else on the other computer and always book map here on my primary screen. So again, for this presentation, I have one screen, I'm jumping back and forth. But normally, I'm looking at hero and book map simultaneously, and maybe two different screens for for book map. So anyway, my time is up. The press conference is starting. And and finally asked, Can we see the spot gamma for ES? And I have been showing that I assume you mean hero, that's what I've got already gone over the positional analysis. So we'll take a look at one last look one last look at hero. And then I'll, then I'll call it a day. So we're on the on the five minute rolling windows. So this is pretty fresh, fresh data. And I'd say, in conclusive, at this point, there, the purple line is pointing up. So taking slightly positive delta positions here. Alright, so again, my time is up. And this is moving pretty fast. And now prices slipped below the 4050 level. So remember, again, that chart we saw on equity hub of the rising spot gamma momentum indicator as price move move below 50. But it looks like some, well, now the aggressive sellers have come in, there were a few buyers, the purple dots pink green dots. Now the now the purple dots, the aggressive sellers are coming in. And again, below the 4050 SPX 4050 pivot line. So I'm going to wrap it up here. Call it a day. Thank you very much for your questions and comments. Thanks for watching. And we'll we'll catch up tomorrow. And we'll talk about the aftermath of the FOMC announcement. So thanks again. Have a great afternoon. And I will see you tomorrow.