 Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm 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. The focus of my presentation and the focus of the Options-Doug chat channel in Discord 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 and 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 develop a thesis regarding the expected trading range and volatility for the day as well as the directional bias. The second step in my process is execution. 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. When I talk about setups, I will be talking about setups in an underlying asset and those setups can be taken any number of ways with futures, options, or shares. Questions and comments are welcome and I will be watching both the Options-Doug chat channel in Discord and the chat and YouTube for your questions and comments. So again, please feel free to post your questions and comments. My agenda for today, first of all, I'm going to go over economic data events coming out for the week and it's a jam-packed week. And then I'll go over my positional analysis, my planning process, and then I'll review a few setups from this morning and then we'll take a look at the live market. Alright, so first of all, news economic data and there's quite a week coming up starting tomorrow with CPI data coming out at 8.30 a.m. Eastern Time. So that's tomorrow. That's typically a pretty big event and then on Wednesday starts off with PPI data at 8.30 a.m. Eastern Time and then the big event of the week, the FOMC announcement at 2 p.m. and then the press conference begins at 2.30 p.m. and note that will be during my session. I start at 1.30 p.m. The announcement again is at 2 p.m. so I will cover the market from 2 to 2.30 p.m. at the time the press conference begins and then on Thursday retail sales and then on Friday first of all the Michigan Consumer Sentiment at 10 a.m. and then the second big event of the week is the June Options expiration and June being a close to the end of the quarter is a very large expiration. So that is another big event and remember for SPX there's an 8.00 a.m. settlement and a p.m. settlement. That is the events coming up for the week. Today is kind of the calm before the storm. Alright, let's take a look at some charts now. Let's start with my positional analysis. I'm going to start with the S&P 500 and this is the ES Futures and Bookmap and before I take a closer look at this chart I'm going to take a look at a larger timeframe and just let me know can everyone hear me okay? If someone would please let me know I'm going to assume that you can. Alright, so this is SPX in a 30 day, thank you Paul so this is SPX in a 30 day one hour chart showing price and key levels so right now this chart is showing that SPX has broken above the 4300 level that was the call wall and the call wall did shift higher so let me point out some levels on this chart first the dashed purple lines are showing the lower and upper edge of the expected move for the week and then the dashed blue lines are showing the lower and upper edge of the expected move for the day and looks like SPX is approaching that level there are some other levels on this chart spot gamma levels shown with the dark red lines red horizontal lines first of all there's the put wall that remains at 4000 and that is the strike with the largest net negative gamma that can be expected to act as support and that is not in play for today that is very far away and then the next level is the volatility trigger at 4245 that also remains at the same level and that is spot gamma's proprietary gamma flip level below that level market makers position on the gamma curve is negative in a negative gamma environment they have to trade with price to hedge their delta exposure and that tends to enhance or increase volatility on the other hand like SPX is trading now market makers position on the gamma curve is positive in a positive gamma environment they have to trade against price to hedge their delta exposure and that tends to subdue volatility and that level remains unchanged from last week and also the next level up the 4300 level that I just mentioned is the absolute gamma strike and that level is also unchanged that's the strike with the largest absolute gamma and that is a very important level a lot of gamma is concentrated at that level and then finally the call wall at 4400 and that did move up from 4300 last week, last Friday to 4400 today moving that ceiling up giving price room to run so the way spot gamma looks at it is with that call wall moving up SPX is no longer oversold there's room to run to the upside alright so those are the levels in a larger time frame the key levels and note there was an issue with this this is thinkorswim again a 30 day one hour chart there was an issue with this script this morning so I had to grab a copy from last Friday and make a few changes to it the call wall I had to change the other levels I can't vouch for these combo levels may or may not be correct but the primary daily levels that I mentioned are all correct and again the call wall did move up from 4300 to 4400 so the key takeaways from this are that SPX is above its volatility trigger above the 4300 level approaching the 4320 level which is the JP Morgan short call and the JP Morgan collar that expires at the end of June and then the call wall moved up to 4400 for spy the put wall did shift lower from 427 last Friday to 415 today so minor shifts in the S&P 500 today alright let's take a look at another thinkorswim chart shorter time frame this is the thinkorswim one day one minute chart just showing SPX price action and the levels that are in play for today and here's the short strike short call strike of the JP Morgan collar that I mentioned earlier and this strike is very often a magnet for price at the time it expires so looking for price to focus on that level especially as the end of June approaches alright let's take a look at book map now and book map just like the charts that we looked at showing a very narrow range today price finally broke out around 1130 broke above VWAP that acted as resistance for a number of short setups this morning the 431 spy 431 level is in play and note here I am on the September contract now so this is the U contract, the September contract so I have two columns of notes here first spot gamma notes spot gamma, cloud notes and then I have my own column of notes here these are my cloud notes and I have the same levels as spot gamma note right now there's about a 47 point difference between ES the new contract and SPX and that is what spot gamma is using that's what I calculated this morning and then I also have spy levels here on my chart so again very narrow range and it looks like SPX is trying to move higher and the, I don't, oh here it is yeah this is the 4320 level right here this is the short strike of the JPMorgan collar and that was noted as resistance in the spot gamma AM founders note so that's the 4320 level noted there right so those are the levels that are in play for the S&P 500 narrow trading range and now price is trying to make it up to the 4320 level the SPX 4320 level and Alexander asked can I check Tesla when I get to setups I'll take a look at Tesla so I'm still in my planning positional analysis here so that's the S&P 500 let's take a look at NASDAQ so it looks like now NASDAQ is up at the upper daily expected move so that is the upper end of the expected move for the day and levels that are in play there are no spot gamma levels no gamma levels just the 2QQ and NQ round numbers so there's the QQQ 357, 356 and the 14,800 level 357 and the 14850 level and also the upper daily expected move and now price is moving up to the 358 level so much the NASDAQ is much more bullish today than the S&P 500 let's take a look at a QQQ chart so showing the levels that are in play for today and spot gamma did note this 355 level as resistance and price is traded above that level all day price is also trading above the volatility trigger so both the S&P 500 and NASDAQ and positive gamma environment and then the call wall is at 360 so shifts in levels for the NASDAQ first of all for the NDX volatility trigger put wall and call wall all did shifted lower and then for QQQ the volatility trigger did shift higher from 351 to 354 I generally for NASDAQ focus more on QQQ levels so again the call wall remains at 360 up above another 2 points above and then the absolute gamma strike is well below at 350 alright so those are the levels that are in play for today I've talked about shifts in levels let's take a look at the VANA charts so this is SPX and what this chart is showing is how market makers delta notional changes with changes in price delta notional shown on the vertical axis and price shown on the horizontal axis there are two curves on this chart the first is showing how price changes with changes held market makers delta notional changes with changes in price only what this is showing is that as price increases market makers will need to sell futures to hedge their delta exposure and again that tends to subdue volatility and then on the other hand on this pink curve, purple curve is showing how market makers delta notional changes with changes in price and implied volatility and that change in delta with a change in applied volatility is the VANA effect hence the name of this the VANA model and this is showing as price increases market makers may have slightly less delta notional to hedge but not much there's not much of a tailwind there from that and then on the other hand as price decreases and a negative gamma environment market makers will have much more delta notional to hedge as price decreases they will need to sell futures let's see where SPX is trading now give me just a moment to check on SPX price so it's around $43.20 so just right around the just slightly lower than the JP Morgan collar strike so now here's $43.20 right where I'm holding my cursor the vertical line here so this is clearly showing that market makers will be selling to hedge their delta exposure as price increases alright so that is SPX again in a very positive gamma environment we'll take a look at the values for gamma notional in just a moment I do want to take a look at the VANA models for SPI which is also positive gamma but not as positive as as SPX which is pretty typical so SPI is trading at $431.60 so right around the bottom of the curve there and then QQQ is also positive but less so than the S&P 500 and QQQ right now is trading just around $358 so also at the bottom of the curve there so any tailwind that was available this morning for market makers buying back short futures is gone at this point alright so based on this information let's take a look at the data here we go so what I want to look at is gamma notional this is market makers position on the gamma curve for SPX, SPI, NDX and QQQ and as you can see all positive and very positive for SPX $1.07 billion also positive for SPI very positive and then slightly positive for NDX and QQQ so again market makers position on the gamma curve for the S&P 500 and NASDAQ all positive indicating a range day that was what I expected lower volatility and a range day certainly what was playing out this morning alright let's take a look at some set ups now let's start with the S&P 500 and what I'm looking at is the spot gamma hero chart this is showing price with the white line and the hero signal hedging impact real time options showing options trades and market maker hedging pressure, hedging flow for a combined signal for the S&P 500 SPX, SPI, XSP and ES alright note so far today this total signal is negative so starting around just after one o'clock traders started fading this move they started taking negative delta positions and that now continues lower let's take a look at the individual components of this and then we'll take a look at some set ups so first of all SPX and that signal is still positive but also starting to move lower positive 511 million SPI now negative minus 200 million also SPI traders starting to fade the move as price moves higher toward that 43-20 level and then finally ES futures has been quite negative really since the since the open yesterday afternoon is what it appears we'll zoom in just on the just on the cash session here and really start it moving lower right before the cash open right now at 781 million and then the total signal so right now setting up a potential short we'll take a closer look at that in a few minutes when we go to the live market so let me point out a couple of set ups here so first of all very choppy morning and really trading more as I mentioned before short set VWAP just based on reading order flow and book map hero I thought was too choppy to provide much of a clear signal this morning up until about zoom in on this up until about 1115, 1120 that's when SPX started to break out of this trading range just around 1115 pulled back as hero started to increase around 1115 and continued higher so there was the set up the long set up right around 1125 so let's go take a look at that in book map let's go back to the S&P 500 so first of all let's just focus on this for two first two hours here and this is what I was looking at this morning just multiple tests first of all of the spy 431 level and reversals lower and then multiple tests of VWAP that is this light blue line there cyan line again multiple tests multiple short scalps move over a little bit so remember options traders started taking positive delta positions let's see when that was again right around 1115 and we're looking for the pullback at 1125 so 1115 is when market traders started taking positive delta positions order flow is starting to shift somewhat bullish prices making higher highs and then a long entry pullback as traders were taking positive delta positions again right around 1125 so it took a lot of patience to trade the S&P 500 this morning and price then broke above the spy 431 level and now has finally made it up to the 4320 level alright so that is the S&P 500 again this morning short multiple short scalps from VWAP and then the move higher the breakout of that range around 1125 1130 as traders started taking positive delta positions options traders let's take a look at NASDAQ now a very bullish day here in NASDAQ and note this rising yellow line this is showing stop orders buy stop orders has just been a steady uptrend this is a very good directional indicator showing that buy stop orders are helping to fuel the move higher and higher let's take a look at hero for NASDAQ and really this so this is a combined signal of NDX and QQQ pretty similar to the S&P 500 and this move higher really started about the same time as the S&P 500 as options traders started taking positive delta positions note the rising hero line and then the reversal higher just about the same time and the breakout of that chop range in the morning let's go back to book map and zoomed out at this level it's very easy to see order flow and note the move down to the 356 level all the pink volume dots aggressive sellers down to that level the 800 level and also the QQQ 356 level and then the shift to positive order flow you can see all the green volume dots shift higher in CVD shown by this dark blue line and then also as I mentioned before buy stop orders helping to fuel the move higher and then finally this looks like a stop run you can see all the green volume dots up above the upper daily expected move up to the 900 level alright so there's the there's the NASDAQ bullish setup as well took some patience this morning to sit through the chop and then now price has broken out and is moving higher and patience was rewarded this morning alright let's take a look at a few stocks first of all AMD and note that 130 is the call wall for AMD let's take a look at at hero for AMD zoom in zoom in on the morning session so here's the 130 call wall and price tested that lower level and reverse pretty sharply and traders were started taking negative delta positions so a good short setup there in AMD we'll take a look at the book map zoom in on this a bit and you can see all of the aggressive sellers up here at that level so these small green dots are showing a buy sweep up to that 130 call wall level and those were absorbed aggressive sellers coming in at that level and then we saw that options traders were starting to take negative delta positions and price reverse lower and good for a if you held it good for a a three point move lower in AMD right the next stock I want to take a look at is meta and I'm just highlighting a few stocks from this morning if anyone has any any other stocks that you want me to take a look at I will Alexander ask about Tesla we'll take a look at that in just a minute so here's meta let's go take a look at hero and see what options traders were doing so interesting in AMD it looks like some large trades came in let's see what they're doing put sellers coming in that's shown by this rising blue line so far so sending the total signal to bullish for the day positive for the day let's take a look at that and for meta traders are buying calls and selling puts and call buyers are really mostly driving price higher so both these the rising orange line showing call buyers and the rising blue line showing put sellers both positive positive delta positions but in the morning it was definitely the call buyers driving price higher alright so that's meta and slow Desiree Oracle has earnings today yeah we can take a look at Oracle and hero I don't have it in book map but we can take a look and hero in just a moment alright so that's meta call buyers driving price higher if you're looking for a stock setup that's a great thing to look for is call buyers when traders buy calls market makers sell the calls and they have to buy stock to hedge their delta exposure and as price continues to go up they have to buy more stock to hedge their delta exposure here's Microsoft and this was a a short setup in the morning really a confirmation of a short as traders were taking negative delta positions starting about 945 950 we'll go take a look at book map Microsoft so short setup this morning and now looks like Microsoft found support just above the 325 level and now is moving higher and let's go take a look at hero again see what options traders are doing so pretty other than the morning signal pretty choppy signal not really confirming the move higher alright let's take a look at Tesla and with Tesla there's a very often a very strong correlation between options trades hedging flow and price action and so far the number today the notional value is positive looks like call buyers primarily driving price higher that show my the rising orange line so traders are buying calls and buying puts or selling puts I'm sorry both numbers are positive but call buyers are really driving price let's just go back and take a look at so this really set up a long just around 1040 let's go take a look at that around it looks like around 245 let's go take a look at that and book map so fairly choppy session in Tesla but there is the quick dip lower to 245 and long setup there if you missed that entry there were a couple of longs there and then another test of 246 so Alexander there you go there's Tesla and right now it looks like it opened just around 248 and is trading just above that level let's see if we can find Oracle in hero now excuse me let's check for Oracle alright bullish bullish day for Oracle note the call wall at 115 price trading above that here's the call wall price trading above let's see what traders are doing how they're positioning before earnings so they're buying calls and buying puts that's shown by the positive orange line and the negative blue line so call buyers are winning go back and take a look the total signal and this is showing next expiry so this is options that expire on Friday and it looks like that is almost the all of the order flow today is options that expire on Friday so that's how traders are positioning themselves in the options market ahead of earnings today is trading options that expire on on Friday and that is also again the monthly expiration so that makes total sense alright so there you go there's Oracle alright let's take a look at the SAP 500 again now there's pretty quite a divergence here in price action and options traders let's see if we can get some clarity by looking at a shorter rolling window period so this is the cumulative hero signal for the entire day and let's take a look at a shorter rolling window period and that does provide more clarity so right now options traders starting just around 135-140 have been taking positive delta positions and prices responding higher so in this case just based on this information I would be looking for looking for a long on pullbacks so it looks like one might have just happened or be in the process of happening let's take a look at book map go back to the SAP 500 and now prices trying to break above the I'm going to just to make this a little bit more clear tone down the heat map quite a bit so we can just look at order flow so I would be cautious around this 43-20 level but here was the good long set up this trend break and the shift in order flow note the all the green volume dots aggressive buyers start to come in buy stop orders fuel the move higher stop run up to the 43-20 level and note that some larger traders are starting to fade this move with sell iceberg orders 473 contracts two executions that's shown by this falling but so far the stop orders and cumulative volume delta stop orders shown in the yellow line cumulative volume delta with the dark blue line continue to move higher and we saw that hero was rising so this looks definitely looks bullish to me just another pullback so the SAP 500 may get stuck down this level the 43-20 level let's take a look at NASDAQ and again if anybody has any other stocks that you want me to take a look at please let me know so NASDAQ continues the bullish move higher looks like CVD is shifting lower you can just see all the pink volume dots coming in as opposed to the SAP 500 larger traders are buying this move with iceberg orders let's see what options traders are doing so for the SAP 500 the overall trend of hero now looking at the shorter time frame continues to move higher let's go take a look at NASDAQ and again remember we're on a 30-minute rolling window period so here they are taking negative delta positions we're on the 30-minute rolling window period let's go back and take a look at NASDAQ so we know that options traders are taking negative delta positions it looks like the order flow in terms of cumulative volume delta has shifted somewhat negative 900 right above so we can look at the SAP 500 see how that resolved so this 43-20 should be a pretty sticky area for the SAP 500 and most of the volume for the day is concentrated much lower in this chop zone the first couple of hours the chop zone it's slow to Zariya Adobe is up 4% today Thursday we can take a look at that in Hero I'm not sure if Adobe is included yeah it is let's go back and take a look at the one-day look back period so pretty flat for Adobe here traders are buying calls and buying puts in about equal numbers alright so I don't have Adobe in book maps so we'll just have to look at Hero here so again traders buying calls and buying puts in almost equal numbers back to the SAP 500 now I'm back on a one-day rolling window period let's change that back to 30 minutes now it looks like that has leveled off so traders are starting to take negative delta positions or stopped buying options stopped taking positive delta positions as price approached that 4320 level note that Hero is flattening off moving slightly lower and that level was noted as resistance in the spot gamma AM founders note let's go take a look at book map so maybe a reversal setting up this is moving very slowly today and again remember volume is split between two contracts the June and September contract let's take a look at NASDAQ and it looks like the NASDAQ is stuck between QQQ 358 and 14900 let's see what options traders are doing in the NASDAQ and again we're on a shorter time frame 30 minute rolling window period and potentially setting up a short let's see if we can confirm anything with order flow and not really not so far let's just take a look at so with NASDAQ above the upper daily expected move let me just take a look at something so if you wanted to take a shot at this a 358 put is trading for about 42 43 cents for QQQ so a cheap shot for NASDAQ to move lower and if it moves back down to 357 you could potentially double your money so not a recommendation just a cheap shot there let's take a look at SAP500 and see if it has broken away from the 4320 level and now it looks like it may be breaking higher and certainly in this case order flow and stop order support a move higher alright I've got a couple minutes left anybody have anything that they want me to take a look at stocks futures so slow it as already says Carvana we can take a look at that in Hero that is so interesting that Hero for NASDAQ continues to support to move lower we'll remember that QQQ 358 put that expires today for 42 43 cents alright let's take a look at Carvana again I don't have that in book map we need a little choppy today note 20 is the call wall 19 is the hedge wall there we go that makes so very low notional value here but today traders have been buying calls and selling puts and this was a good morning setup note the rising hero line pretty much continually arising with a couple of pullback setups there at 1880 1940 and then price broke above the 20 call wall that's also the key gamma strike and the key delta strike so good confirmation of along there for Carvana let's take a last look at SB 500 we'll go back to the 30 minute rolling window period slightly trending lower on Hero still looking NASDAQ still continues lower and so far in NASDAQ no hint of a move lower alright same for SB 500 pinned to that 43 20 level alright that's all I have for today remember today is really somewhat of the calm before the storm this is how traders are positioning themselves ahead of the events for the week PPI tomorrow morning at 830 it's typically a pretty good market mover and then PPI on Wednesday FMC meeting at 2pm and we will be live I'll go through my positional analysis before the announcement and then at the announcement on Wednesday we will watch the live market Wednesday and then finally options expiration on Friday alright thank you everyone thanks for watching thanks for your questions and comments thanks for your participation and I will see you tomorrow bye