 All right, good morning everybody and welcome to the very good morning everybody Today we have Brent Kachuba and we're going to be going through Some futures and some stocks here Brent has been he's done a bunch of webinars with us before in the past here he has a history in the well institutional background here work for b of a credit swiss and And also with wolverine Representing their electronic derivatives trading platform. So now Brent is working with spot gamma.com. This is His invention here as he moves forward with publishes various metrics on options data If you want to reach out to Brent, you got his website here spot gamma.com There's subscriptions for and different products here that he has I'll be pasting these into the chat so you can Access those if you want Go through some disclosures and then we'll jump right in and get going here General disclosure all book map 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 digital currencies involve substantial risk of loss and is not suitable for all investors Past performance is not necessarily indicative of future results. All right. So with that said, uh, we'll jump right in and Welcome Brent. Nice to have you back Thanks Bruce. I appreciate it's uh been a couple months here. It's been a while few months since Yeah, it has So, um You know Brent and I talked about this. We we thought we'd we'd just go through uh some of the levels in um That he offers. This is his product over here with the cloud notes that is within book map broadcasted or within book map here displayed and then there's also this hero indicator down here um that is showing um The hedge impact of uh, you know real-time options Uh with these triangles that you see on here, uh, but um some interesting stuff in here Um, and I just want to let you know about this this hero indicator. What it's showing you here uh is um You about the options as well as these levels here are also uh regarding options from uh When is it updated 3 3 a.m. Is that right? Yeah, okay. That's right So uh every night around midnight roughly eastern time the uh exchanges published updated open interest So we read that open interest and that is what is the underlying for the trading levels that Yeah, yeah. Um, so, uh, I don't know what what what do you think what's going on out there Brent and uh going Yeah, some of these instruments Sure. So this morning what we're looking at here are Some big options levels at 4,300 And you can see that in in white there. It's called 3 now l3 means it's the third largest level that we're reading in the What the biggest options levels are and the basic idea around any of those levels you see in cloud notes is that As the market approaches those levels think options hedging flow picks up So options dealers and market makers may increase their hedging flow around those labeled levels and that is what creates support and resistance uh those strikes Now the second thing that you mentioned is the hero indicator at the bottom. So if you think of The labels in the cloud notes the open interest as the positions that we come in at the start of the day And we think those are key support and resistance Hero indicator Is reading all of the real-time options flow taking place in this case in the s and p 500 So that's the spx index options as well as the spider options and it's showing you what the estimated hedging Of that flow is so as traders buy calls or sell call buy and sell puts We believe that market makers on the other side may have to hedge that order flow So just contextually to to talk about what's happening in the first, you know, 30 minutes of trading so far You can see that the market had rallied pretty sharply. It rejected right around that vol trigger area Which is a major resistance line for us the market, you know on open Receded from that level, but what you can see that the options flow is somewhat bullish to start the day And I say bullish because that green line that you're going to very bottom Is trending up and that is telling us that traders are selling puts and or buying calls And that's what's called positive delta flow Oh, if you are a market maker and you're on the other side of that positive delta flow That means as traders are buying calls or selling puts you are doing the opposite, right? You're selling or buying puts and that leaves you in what's a Negative delta position you need to buy some stock or some futures edge So in general, if I was just look at the screen here on open We dropped just below kind of one of our key levels But the options flow at the is bullish, which tells me that we may mean Yeah, yeah, interesting. So, uh, you know looking at that like, uh, we're down below a key level We have quite a bit here on the bid as you can see here Buyers lining up here at forty two seventy five area And plus you can see that the the the cumulative volume delta for the options overall is is positive here Right, right. And so, you know, I think contextually if you think about what happened over this past weekend People are worried about geopolitical You know, whatever may happen, Russia, Ukraine Situation and so you probably want to own some put protection concerned about, you know, some type Event beyond which we've already seen, right? So you want to own some options own some put protection over the weekend And then as the market opens and it doesn't seem like anything Materially happened at least enough to drive equities lower You probably sell some of those puts because uh, they're bleeding, right? If you want to put over the weekend, you basically just paid a big tax in terms of time decay And or what we would call a, you know, volatility reduction basically implied volatility So your puts are hurting and you want to just close those out quickly on the open And I think oftentimes that's why you that's why you can see in this case you got some positive delta readings Creeping in here to start the day Now if that hero signal was to turn down Say right around now that would tell us that traders probably buying puts And that's obviously a bearer sort of signal or indicator And so we would look to see does the does the hero flow change if we test that 300 levels? Does that tell us that look maybe dealers are hedging or traders kind of have now switched from a unwinding protection to wanting to buy Meaning put Oh, are you still there Brent? I think Oh, yeah, okay. Yeah. Yeah, it's been kind of cutting in and out a little bit. Um, uh, but uh, uh, yeah, I mean, uh Uh, so yeah, once you start to see this this hero starting to turn around maybe um Then uh, kind of look out Yeah, that's right and in our so one of the things we do at spot gamma for those Are new to what we do is we write a daily note so every morning around seven o'clock eastern time We send out a note with our now option Sort of our framework and the way that we're looking at the market based on how options are positioned And one of our core themes here has been that the uh equities has not seemed to react as Violently to selling in some other shifts as some other asset classes I think there's a lot of people who are scratching their head and wondering why equities aren't really dropping farther here In fact, if you look at since february 24th Would you know, that's the official day that russia invaded crane um the s and p As of, you know, roughly this morning up around two and a half to three percent right from the day they invaded And I think that a lot of people feel like it is a Major market negative and you can obviously outline some of the tail risks here and from a humanitarian perspective It's it's it's sad, right? But just kind of causally talking about the markets the s and p's actually up and so why is that? Well, if you remember back to the december january timeframe Uh, people started to get concerned about monetary policy and what the fed was going to do and they started to add Put protection way back then And that put protection was going to cover them for the fomc meeting that basically takes place next week So next week we we flagged that as a major event because you have the fomc 16th and then you have a very large options expiration on the 18th of just next friday And so because the market went into this geopolitical Window here over the last two weeks, uh Well hedged we think that the impact of of the selling or what? The market was able to better absorb basically selling or any geopolitical concerns Because it was already pretty well hedged because of the fomc now If you look historically at major interim bottoms in the p500 they come right after big options expiration So uh, if you were to look back for example in december of 2018 There was the famous, you know sell-off that coincided with, you know, minutiae calling the banks on christmas eve Well christmas eve was the day after a very large quarterly Options expiration and the market ripped higher after that The same thing in march of 2020. The low was the day after March options expiration and And so we had another huge expiration in just just january, right and and there was a significant low In the market the friday after that january options expiration So this this type of expiration is coming again next friday, and we think that that could be a catalyst Combined with the fmc that could be a big catalyst for a for a pretty good relief rally of Now we only look about 30 days out So who's say what happens in the next quarter towards the end of the year? But we do think that that when large put positions expire it can bring a relief rally to the market and And so that's roughly how we're looking at things now over the next so-called week or two interesting I mean so The the puts and the effect of them is actually having kind of a inverse effect Yeah That's right. So if you if you look at these big levels here on your screen We're in what's called a negative gamma situation and many of you may be familiar with this idea But but basically if if we were to have lots of call open interest around the at the money strikes or where the market is trading We would expect volatility much lighter or much lower and that is because as the Market trades and dealers have long call positions on the way that they had basically suppresses market market volatility Makes volatility lower and in this situation. We have very large put positions on in the market Particularly in those strikes are really concentrated around Right here where the market is trading and so Dealers who are short puts have to hedge with the market in that case So as the market goes down dealers just sell stock to hedge and if the market rallies Then they need to buy stock to hedge to re-hedge, right? So what's happening now is we are in negative gamma situation and we'll get headlines that just fly in right You know issues with the you know Whatever the geopolitical headlines are be Headline out those I think could read or traders can react rapidly to those headline Readings and then the negative gamma of the market of the dealers has to also react just as a sort of Byproduct or a derivative of that, right? So imagine right now that it comes out that you know Someone fortunate bombing just took place and the market starts to sell Well, that selling is going to be exacerbated or expanded because market makers have to start selling futures to stay hedged And that's why you'll see you know our levels will spread out a little bit So if you see there's a level up there at 4300, but the next one's not all the way down to about 42 40 And so you get these very large swing Just as a function of the way that That options are positioned in the way that dealers are positioned So if you sort of fast forward one more week to options expiration Well a a large amount of the puts roughly about 35 to 40 percent of all total puts Expired next friday And so that's why we have it highlighted as when all these puts expire Well that that could reduce a lot of this hedging flow right a lot of the hedging requirements That are Volatility sort of high So, I mean, what do you are kind of speculating like? would might be a High probability scenario after options expiration So to me the high if you were just to look historically at what happens around these large Explorations is that monday after expiration is typically when the low is put into the market and and if you go to our site spot gamble.com we've we've You know written about this extensively we talk about in our daily notes and the point here is that over the next 10 days Volatility is likely to remain very high and no one is going to reduce their put positions really until fOMC Right the the monetary policy to me is the number one on market and the number one thing traders are hedging The geopolitical situation, you know is Is Obviously a tail risk here and if there is some type of a ceasefire we could we could get a decent rally, right? Of course we could but we think that that rally be capped in the 4400 to 4400 Area so basically about 100 points up from here now once the fOMC passes and people just understand what monetary policy is Have a better idea of you know the number of rate heights quantitative easing all that Okay, great. Then we can adjust our protect our protection and also look to sort of allocate our assets more efficiently going forward So in other words, no one's going to really close their puts right reduce their hedges Till the fOMC and that's going to keep things volatile That keeps I think tail risk a little bit higher here, right? Because if the market really starts to drop we'll start selling the market will start selling off And we're going to kind kind of keep getting these really large violent directional swings You know every day up until Up until again that the fOMC The other thing to kind of note which some of you all may find interesting is that there is a there are intraday so excuse me Inside of every week now there are explorations for the cues spiders and spx on mondays wednesdays and fridays And so what we'll see in the hero indicator is a lot of times It will register that options order flow is much Larger on those days and we think that's because there's a lot of what we just call day traders, right? That can be sophisticated hedge funds and like but we're just going to bucket them as day traders that are Trying to buy and sell options particularly this high volatility They're trying to sell options or that expires, you know the same day So for example today's monday There's going to be a lot of people trading that front that that front contract right the front options contract And that can serve to exacerbate volatility So volatility we think high overall but on mondays wednesdays and fridays you just get intraday Larger swings in environments also because there's so many people trying to day trade these These contracts that expire in just a matter of a few hours. So that there's a There's like that added position right that that can expand volatility or make things swing a little more violently Wow, wow, I mean I recall like from the presentation like one of your first I believe It was back when covet was just You know coming out and the news was bad and and But yet the market buoyed, you know and stayed, you know and continued to kind of like slightly go up until options expiration Yeah, and it's really it's pretty fascinating. I mean if you do look back at that covet sell-off, it was It really kicked off It was it was the third friday roughly of february and there was a lot of call options actually expired that day The selling actually started kind of towards the tail end of options expiration week and so you know that that expiration those calls seem to kick off or You know release the high so to speak and the market did Korean quite a bit lower And I think over the next week, you know, we could have we could pull down another four or five percent from here Um, I think with ease again because the the options market sort of supports that You know it it throttles the selling a little bit here because of the hedging flows Uh and because traders are pretty well hedged as I mentioned before So we don't get the situation wherein, you know, we'll have like a limit down day, right? But we could have a succession of two three percent down days in a row Just kind of end up grinding lower And if you look at the way that options are positioned overall, there is a ton of open interest Actually in the call and put side at four thousand and so, you know If we were to really get our worst case scenario would be four thousand or the 40 50 levels technically the the exact level that we're watching We're in look if the market does just sell down there We think that it's an interesting place to to look at getting some long exposure Simply off of a technical I guess I would call it an oversold level For lack of a better term and you know people sort of understand that so, you know There's the ability for the market to have a pretty good slide or sell off here over the next several days is It's still pretty high But again, it's feeding into that key time frame of of march 18th, which is which is the big expiration All right, right. Um, so there's a few questions I see coming through about How do you um read and use the the hero uh indicator and uh, you know Maybe a combined here also with your uh, your your cloud notes column Yeah, so to to keep it really very simple There's three things that I will watch one. I obviously watching the price action Around the levels that you see pub published there in the cloud notes Um, the second thing that I watched is implied volatility So for most of you the easy thing to watch is the vixx and then the third thing is the hero indicator And that's not necessarily an order of importance But if I was to look at the way that the market is trading right now Um, I see the vixx is flat, right? It's about 33 68 call it. Um, so it's not really doing much bruce brought up the vixx futures there So, you know, they're they're well off of overnight As um, and they're just kind of trending right the market's trying to digest whatever the order flows coming over the morning Obviously, there's crude oil made, you know, some big moves. So so there's some volatility in other asset classes And I think the market's trying to digest Um, so volatility is in terms of just watching the vixx is doing nothing at this moment And the hero indicator itself for equities is Right, um, which is telling me that it's actually seems to actually be shifting bullish there, right? So the fact that implied volatility is not going and the hero indicator is not dropping That's telling me that traders are not trying to buy put options right now Obviously, there are tons of other flows outside of options that can affect the market So I'm unaware of what those could be But I'm just looking at the options mark right now I think the options market flows bullish because that green line at the bottom is going up And I'm watching for the vixx to confirm right now the vixx is not going higher at the moment So those two things make sense to me for the market to sort of feedback up into that big 3,300 gamma level Now if vixx was spiking Or shifting up and that hero indicator was moving down that would be telling me that traders are positioning for a negative delta Or adding negative delta trades which infers that dealers would have to start selling stock At the moment, I'm not seeing that I see vixx coming down and I see the hero indicator sort of trending up. So Consequently, I would not look at shorting this market doesn't look at looking doesn't mean it can't go down Obviously because who knows what else could be happening out there But the bounce of flow from the options perspective right now is is pretty neutral the slightly bullish I would say so I try to combine all those things in and around those key trading levels If the market was to sell off here pretty sharply I would look for the Those same signals to turn right at again say 30 to 40, which is the next combo level on the way down When I say turn it means again hero going up as a bullish sign vixx going down a bullish sign So you look for those Indicators to all sort of you know combine and sink basically around the the levels that we've laid out Yeah, yeah interesting interesting stuff. I mean I you know, um reading the the hero indicator like um Uh You've mentioned it in the past. It's always kind of interesting how you're reading These flat areas and how the flat areas are actually telling you quite a bit. Um, yeah Right, so you have to think of it in a um So what is actually happening when the hero indicator is moving up like it was from 9 30 to 10 is those are active trades taking place Right, so that is people what we're doing is every single options trade that takes place We measure what the estimated hedge impact is from that trade. So um The fact that the indicator is going up is telling you that traders are actively buying calls or selling puts And then you can see that basically I would think it's around 10 15 to Right about now, right the indicator self is flat And so that is telling you that it's just neutral flow that it's taking place. So you almost have to in a way Segregate what happened before 10 right because over the last 20 or 30 minutes No order flow in the options or in or it's just neutral flow meaning calls and puts are Excuse me bouncing out there, right? So that's a very neutral reading over the last Say 30 minutes. So in it mentally you almost kind of want to like forget what's now happened Earlier on the open right because that's a little bit in the past in over the last 20 or 30 minutes It's been very neutral order flow again, even on the market. It seems to be selling off a little bit here so You're exactly right that once that line flattens out that's telling you the options market's not really doing anything It's it's quiet, right? And you'll see that over the context for those of you who've been watching There can be some very violent big moves particularly around, you know fed headlines or You know other events like that into the close a lot of times particularly today again because there's an expiration You're going to see the hero readings will will move very rapidly as traders exit and enter those Uh short dated expiration contracts. So You'll you'll see again that indicator shift a lot and the fact that it is flat is telling us that there's not much Taking place. So market is selling off, but the options market is is sort of ambivalent to that. I guess Yeah, really really interesting and then I just kind of overlaid the stops and icebergs on here Just to try to get maybe a little bit more kind of additional information on what larger players might be doing in here Yeah, maybe absorbing on the other side Yeah, and in theory here what we should see is when there are big hero readings or or there's a big change of succession, right of of readings like rate before 10 What's interesting to me is that In theory if that hero indicator is dropping that's telling us the dealers have to short futures, right? to maintain hedges and The icebergs will often coincide with that, right and that that to me is sort of telling us, okay There's been enough of a hero move here to draw out actual options order hedging flow From the market. So, you know, again, if you look right at 10 and you just see that the icebergs dropping Maybe you would think oh, hey, there's some news out that I missed or something is going on the market I don't know what's going on what's going on and now if you can see that the hero Indicators dropping you say, okay, look this iceberg order flow these big trades might just be related to options hedging So contextually I understand what's going on, right? It's not that bomb went off somewhere and and people are reacting to that I mean, obviously people could buy or sell puts if if that's the case But if you can't find news and you see the options flows moving then that can explain a lot of that iceberg order flow Interesting interesting dynamics for sure between these these elements Let's see. Did you want to maybe talk about some of the individual stocks or crude oil? Yeah, I mean, we don't so at the moment We don't cover the commodities futures market But what we have seen if you take a look just at XOM for example, we've seen obviously several days in a row of bullish order flow heading into A lot of these names Exxon, Chevron, etc And the options market is fairly large in these entities And so what you will often see here is now there's bullish order flow And when you see bullish order flow for several days statistically we found that that is a positive indicator for the stock going forward. So, you know It's just sort of relentless call buying In these stocks as you could see you keep getting these, you know surges and the cumulative indicator higher And that's telling us that the bullish flow continues to come Which is quite a bit now What is interesting is you can oftentimes see at key spot gamma levels Which we have a tool called the equity hub where you can analyze what the Big options levels are in Exxon that you'll see the hero indicator flow change at some of the big options levels That telling us that that traders are adjusting their positions as we get into the strikes that have a lot a lot of large gamma So for those of you that are looking to play say gamma squeeze or something of the like When you see the line trending higher like it did from roughly 950 to 10 o'clock You can tell that that's a lot of call flow or positive options flow flooding into a stock And then once the indicator flattens out that tells us that that call flow has subsided So even though the stock right now is at a high you can see that the hero indicator itself Roughly below a little bit below zero and has been trending out So the options market has not continued to buy that that next level of high if that makes sense um You can see this, you know really clearly when the options market really goes nuts like it wasn't tesla You know a few months ago The options flow flood into a lot of these Energy names and you'll see sort of the flow turn on and you'll see the line Change or adjust and then the flow will turn off Which means that that the indicator the hero indicator itself flattens out So this has given you a great view into how the options market both from a A technical perspective meaning dealers may hedge but also from a Fundamental perspective or a sentiment perspective, you know are people buying calls or is something else driving Or moving these stocks So so in essence though, I mean like once I mean if you're looking at this hedging back here, um, then Then in the order flow What you're looking for is like, okay. Well if they're buying calls like how is the market reacting to this? Uh, and and they've stopped and hero is flat flat Um, but you know, you still see a lot of buying coming in here in terms of just you know buying of the actual underline um, well, that's You know, they're positioned already. So just look for this to continue on up until the order flow Uh says something different Yeah, the so we state we save all the data from the hero indicator and we've been running statistics on it and What we find is the the best most consistent signal Is What we call mean reversion. So what do we mean by that? It means that When large order flow and this is the trick is figuring out what is large options order flow? But when large order flow goes into a stock or even the index and that order flow shuts off now Be that bullish order flow or bearish order flow when when the when that flow shuts off the stock will mean revert So in this case, you know, if it's large bullish order flow and and and that doesn't look like massive massively bullish, I mean it's bullish order flow on the screen here But I wouldn't call it a you know, several standard deviations larger than what we've seen recently But technically speaking once that bullish order flow now stops, we would see the stock mean revert, right? So if you were looking to want to fade a move, you know, buy a dip or sell a rip so to speak Watching for that hero signal to turn Uh flatten out and turn is is a great Indicator that that the stock may, you know change its trend on on the short term so it and that's that's um That's great. I mean like, uh, I hadn't heard you talk about that one before um And if you I mean if you just think about it, right if you believe that And and we we posted a youtube video about the hero indicator Uh on a youtube spot game And we talked about specifically about how options orders are sent into the market and how they're hedged And so if you think about wall street bets, for example If they all decided that they wanted to buy exxon mobile today They would all start putting orders into their, you know interactive brokers or e-trader robin hood app, right? And when they start pounding a stock buying calls Dealers suddenly have to react to that and the way they're going to react to that, you know Deals are selling all these calls, right to wall street bets people They're going to have to start hedging and the way that they're going to hedge is buying stock So once those calls stop coming into the market, they can stop buying the stock, right? And and that's why the stock can fade, right? It's it's just a matter of watching the order flow come in once that buying is done, right? Because the the options order flow is turned off then the buying pressure subsides, right? The momentum gets lost Yeah, yeah, I mean, I'm just curious though like in terms of a mean reversion Would you do you typically see it come back to some of these price levels where you see the hero? You know the the hedge impact here in real time Yeah I have not studied, you know where the mean reversion comes back Um, I think that you know the the options market is constantly Moving, right? And you can see now in exxon mobile what's happening is it looks like bearish order flows Has come in over the last few minutes because you can see the hero line is now trending lower um, so That's a very interesting concept. It's one I actually should check out, right? Is what does the mean reversion go back to is it is it strikes with large open interest? Is it Sort of the idea of all the block print here Recently and that's where it should fade back to I mean that those are Pretty interesting concepts and I'll have to ask some of the traders actually that are using this a lot to see if they've Kind of picked up on anything like that, but I mean you can clearly see there was a lot of liquidity up there at 87 Uh, regardless of why that liquidity was there it seemed like once the Stock hit that level it seemed to unleash some negative delta trading. So people sold calls likely is what I'm thinking Uh, or they bought puts And it really happened right at that big liquidity level or yeah, yeah, exactly Exactly. I mean, it's a it's a really uh, kind of fascinating way to look at the um order flow A different kind of Angle at it with the options information here. It makes sense. I mean the the mean reversion like you were talking about earlier But like where is the reversion to like, um, you know, uh, what what mean? I mean, does it come back to some of these levels in here or we're going to look at like a vwap Uh, or you know something like that in here Um, yeah, that's uh You gotta think a lot of that is a lot of that's based on on time frame. Obviously, uh What what is the continued order flow, you know, if this is this order flow continues to be bearish Well, that's that's more bearish pressure on the stock now, right as opposed to if the indicator just starts turning sideways Which is basically telling you look the the order flow in the options market has really turned off Uh, and so, you know This this could be more of a short term play What what's awesome and fascinating is is see the order flow come in on some of these names that have been just smoked Like after earnings, for example, um, like if you were looking to play, I remember netflix was one where Uh, the stock was down. I believe it was like 20 after earnings, you know And um, you could see that at a certain point the options flow just turned massively bullish And that was actually a longer term signal that there was a more material bounce in the stock, right because you could see Okay, look if I own puts and I just made 20 i'm happy to take those off now Uh, and that signal actually showed to be a multi-day sort of level You know rally in the stock now two more recent ones paypal and facebook that same bullish order flow never came into the stock In fact that the predominantly The predominant order flow in those names has been to sell calls, uh, which you know can keep pressure on the stock lower so The time frames, you know Had to be I think read in context with what with whatever may be going on in the stock You know in this case there's a there's some day trading flow and some good momentum off the fact that you know Crude is up 10 right? So those mean reversions I think are taking place in the context of a stock that Is is pretty bullish and likely trending Interesting interesting stuff um, are other other commodities that you're looking at like, uh The other the other place that we've been seeing a lot of bullish order flow is in uh, silver and gold So if you look at a lot of the gold miners, uh, silver, you know, you have up your screen there and gold Silver the the ETFs themselves. Um, wow something's going on Uh, the ETFs themselves are a little bit tricky because obviously there's the there's the future, right? So we're watching the options order flow on ETFs themselves And I think there's a lot of arbitrage between the ETFs and the futures So it's a little more cloudy. I think particularly, um On some of the smaller order flow days in in like gold and silver But when you can see it's a lot of big time orders will come in and when you could tell it's a big order because the hero indicator It will have a perpendicular line and it will be a big line So right after 10 o'clock there's two big orders there Those are block trades that make that hero indicator jump like that And the other thing that you'll see is a multi-day order flow coming in bullish particularly in silver Last several days, uh, the gdx and some of the miners are interesting again because you're getting persistent You know every day we'll see big order flow bullish order flow come in on these Uh on these mining stocks Um, and you'll see just continuous sort of uptrend. So you'll get four five six seven ten days of bullish order that That statistically speaking has proven to be you know A great indicator for you know tomorrow and how the stock will react So think of it as like almost like insider buying buying Stock buying backs, right? You're getting the tailwind from the fact that calls keep getting bought in a stock Hmm. All right. Do you find this effect with most of the etfs? Yeah, and and it's it's interesting to watch the order flow in the etfs because um, again a lot of them are tied to futures or You know if gold futures start selling off, well gold gld is going to go with it, right? There's an arbitrage there. So again, you have to read the options order flow a little bit, you know, differently It was it's fascinating to see and watch the same thing the vix you'll get the vix futures are moving and the vix is obviously tied to the price of px options But it's interesting to watch the vix order flow or the order flow in vxx or uv x y I mean as many of you know You know a lot of people like to play that roll down, right the natural decay that's built into the vxx and uv x y And you can really see when people start to short cover or get squeezed out of those positions in the vxx or uv x y Because of vix spikes, right? And I think in gold and some of these other things it's a similar thing where Maybe i'm long gold futures, but I want to I want I want to buy puts as a way to So you kind of have to be able to piece together the way that some of these uh, Uh, these asset classes are trading against each other in order to gold Gold futures gld, etc. Like maybe i'm long futures, but I just buy gld put Or there's some other type of our arbitrage taking place Yeah, I mean it's uh, you know, I mean in book map when we look at some of these, uh, etf's like, um, uh, The the order flow is is is very very different. The behavior is I mean, there's just you know, huge, um, you know hedging and arbitrage And you can see it within this instrument as well here. I mean it's giving nice kind of signal or Readings down here 184 and this kind of 183 75 But if you zoom in here, I mean just look at how close they are here to to the you know the the price and and Yeah, you can see there. There's a great example of a block trade. You see the two arrow there Someone put on some type of a spread and then you see that gap down in the hero Which is just telling you that looks some some type of a Block trade went up And that's how that shows up on the hero Do you think there's any correlation between that and and this spike here? I don't I mean the the the reality is those are two minutes apart from each other, right? So, uh, Yeah, it's it's possible. You have to kind of look at what the order is Uh, put that together. I mean in this same lecture I talked about before Again on our youtube page we talked about the big orders and the fact that when a big order like that comes across the desk A big order usually goes to an upstairs desk, right? Like bank desk or something and they'll hedge Oftentimes before the actual trade goes up. So I would more likely suspect that the big green bar Volume bar there, you know, just a few minutes after like a minute after maybe more tied to that order But that's just kind of speculate I mean It doesn't seem right. They can do that, you know, like they hedge before the position Um, uh, don't they have to take the order first? We have to you have to print it as like the stock, right? So you you can you can I can make an agreement with you that I'm gonna trade, you know, okay You know bruce, we're gonna trade a thousand, you know contracts of microsoft Um, and I can say hey trader put put the hedge on while I sort of negotiate the details here or whatever. So, um I mean, I think in a way it's it's not necessarily Uh, you can look at it two ways, right? If once that options trade goes up, you're you print it on the exchange You're giving away a lot of information to people, right? Uh, and so I think that in general Um, you have to print it as you know, that or that a stock order was tied to an options order And it has to be, you know pretty close to when the trade goes up as opposed You also from a risk perspective don't want to print this down and wait You know half an hour or something like that to do your options trade because because that would throw your risk off. So, um I don't think that's really a nefarious, you know way of operating, but Okay, no, I was just curious about that. Um, but I mean, I think there's ways that, you know, certainly Certainly it's more advantageous to put the hedge up immediately before you put the options order up I mean that that makes sense Um, then doing it the other way, right? But that's the interesting thing about it If you think about an electronic market maker who's just getting pounded with options order flow electronically They're reacting after the fact right after the trade takes place Because they only know the trade takes place when it happens and then they have to react As opposed to if I call you up on the phone and we talk about it, then I know before You know, you put your trade up that that it's going to happen. Does that make sense? Yeah. Yeah. Yeah for sure Um, so you'll see the you'll see the the you'll see the the stock or you know ETF or whatever act a little bit differently before those big prints Um, more often than as opposed to when you see a bunch of really small hero flow that adds up into like a curve That's telling us more electronic order flow and and the hedging impact might come after Um, the result of that, uh, the aggregation of a lot of small order So that that's when you're looking at the CVD, uh output here in hero Right, right. So that, you know, there in that screen, there's not a whole lot going on right We are having some chunky block trades that have moved the indicator lower, but Overall, it's it's relatively flat like you're getting these stair steps and the stair steps each stairs like a big order Right like a block trade of some kind as opposed to you know If you look at tesla, you'll see a very clean curve and we see these curves It's telling you that this is a lot a lot of electronic order flow coming into the market So you have chunky or how you know curve a linear the order flow is in here Yes, there are some, you know gaps, right? But really what this is is there's tons of small orders coming into the market because the The line just looks totally different. I'm not sure the Relay that the idea of that but yeah, yeah, let me let me just kind of adjust this a bit here and See what a thousand looks like or that might be a little way way too much Yeah, it's interesting price action so far this morning. I mean you're seeing I'm looking at my dashboard here But there's some bearish order flow in the cues put buying And and spiders are are neutral is slightly kind of I guess I just call them pretty neutral at this point But so far it seems fairly fairly kind of quiet even though the the features appear to be uh I guess they just more or less mean reverted that move from 7 a.m Yeah, so, uh, yeah, I mean the s s and p here the e mini has just gone down a bit here Yeah, but if you I mean if you look at that order flow there, I mean The options market is not, you know, uh, buy inputs. It doesn't appear to be poised for, uh, You know real large sell today. So, uh That that's the that's the line. I mean implied volatility is still holding up. Um, but The idea here really is that, uh, when nothing happens in the market, right? If you don't get selling implied volatility out, meaning the vix will naturally start to come down, right because the vix needs When the vix at 34 that's implying that options traders are expecting a 2% daily move, right? So if the market just sort of stalls and nothing happens, then then the value of put options starts to come down pretty rapidly Which puts a tail wind back into the market. So, uh You know, it's hard unless you're getting bullet bearish new bearish order flow or, you know Real selling to to keep that momentum, right? And once that once that Selling sort of stops the market's going to mean revert on the fact that there's not doesn't look like there's bearish options Flow, uh, and that and the market is also pricing a 2% move, right? So anything other under that is going to add a tail wind to the market, you know as as options which appear too expensive Get sort of repriced if that makes Yeah, yeah So, uh, so when you're, um looking at, uh, uh the vix, I mean, how are you, um Well, how are you reading that the hedge impact in here or, you know You're looking at kind of Not direct correlation, but uh, which one's moving first or, um What kind of what kind of insight do you get using the the vix with some of maybe this let's just say the stock indexes Right. So when you look at the vix futures, what you're actually seeing from our hero perspective is the hedging impact of vix Vix index options that are trading. So in this case, if you're seeing positive, uh, delta order flow in the vix, that's telling you that people are either selling puts or buying calls So, you know, you could see that rate, uh, looks like whatever 10 o'clock. There's a big line there So it looks like, you know, I mean, you can see the triangles on your screen as well It's telling us those are big trades and the vix going up, uh, and those all look like bullish trades So from the delta perspective when you look at the vix people are positioning For some, uh bullish vix trades, which is obviously saying that they're expecting volatility to spike Or they're or they're anticipating that volatility will spike. Now, of course, the vix In the last moment since we've talked is now pushing back over 34. That's a kind of a bearish indicator there Um, but but that's what this is really watching, right? Are their Major bullish inflows into the vix option space, which is telling you that trades are anticipating volatility spikes Now this will be interesting from some mean reversion perspectives if the vix was to intraday spike very high, right? Or we're going to a major move and you start to see the order flow change. That can be an interesting, you know, sentiment Indicator or telling you something that, you know, maybe traders are monetizing, you know Some of their vix calls if they've all really spikes, but but that's really what you're seeing when you're when you're looking at the vix futures here And you see the I mean, it's just really curious. I mean this looks, uh, uh, you know, it's definitely At least from the cash open here, uh, you know, it's been the vix is is bullish here But and we look over here though, like at the the s&p is just slightly slightly going off or, you know, slightly down here Yeah Yeah, and you know, it's uh The the vix index is in particular pretty tricky, right because everything is everything is linked I mean the the vix is is based off of the price of s&p options, right? Um, and so and then you have the vix futures complex as well as some of these ETFs and then you have You know spiders and yes, so so everything is linked Uh, and and and so it's about trying to figure out which type of order flow is dominant I mean, I don't I don't think that there's I shouldn't say ever, but I don't think oftentimes I mean volmageddon comes to mind once is where the vix options order flow is really going to start to wag the rest of the Market, right? So in the case of watching vix and hero, it's it's more interesting from a kind of a sentiment perspective um But you know the the options order flow and the s&p 500 is is large enough We believe to to control the market. I mean we talk about that every day And if you watch our levels, you know, you'll you'll see them come into play Uh, you know quite often. So, um, again, it's it is curious to me here the fact that Fairly neutral order flow, but you know, the vix isn't selling off, right? We're not getting the volatility release yet Um, so, you know, it's a little bit of a drift lower here, but I know it's a good 10 15 points since we've been talking Yeah, yeah Yeah, interesting stuff. I mean like and then how I mean, I know you have the sp y also in your cloud notes Um product here, um, yeah, nasdaq nasdaq russell Are there we've been talking about ways to expand it into the equities and offer our cloud notes Unfortunately from a technical perspective has been a bit difficult to Offer that number of individual stocks. So so we may just choose to do a handful of the most popular stocks, you know That the apple's tessels of the world And offer some some cloud notes there. Uh, but but here it does work for Uh, around 100 symbols that the list is on bookmap.com and then uh, we offer trading levels on over 3000 different stocks, so You can subscribe to all of that book mac book map marketplace. Sorry a little tongue twister there Yeah, yeah, I can I'll show that here. Um, some people and also I want to get to your website and and show that um, so Because you have a lot of educational materials in there And you know a lot of people have questions about this stuff. So we'll we'll migrate over there in just a second here but so If you're interested in this hero indicator, uh, and the levels that brent's talking about Go to bookmap.com and click on the more button here And then you go to the marketplace. Uh, you can Click on the text here to the marketplace or You know Any of these in here will go to um, let's go to add-ons And should take us there Okay, it's not there it goes. Okay And let's just go to the home page here. Uh, it's right here in the top. Um Top left, uh, and uh, you can Look at some of the details in here of, uh, you know, what you're getting and the different, uh Uh combinations here. I don't know if you want to talk a little bit about that brent Yeah, so spot game of pro is uh, you will get the cloud notes You'll get two two daily notes from us So one around 7am and the eastern time and then another one that comes out The close and we have a an extensive site that analyzes the options positioning Um in over like I said 3000 different names and then some more extensive readings in nasdaq spx, etc And if you go spot game of pro plus hero that bundle, uh heroes, obviously the options real-time options indicator So some of you may elect just to get the hero itself, which is great If you want spot game pro, which is just our daily notes, you know, select that and obviously you can also bundle And again, that includes our our daily notes and anything that we offer at spot gamma doc Okay, so, uh, yeah, that's where you can find it here to to add it within book map And then we'll jump over to the spot gamma website here Anything you want to go through here and kind of point out or go through in here Yeah, so, uh, we have a few different ways to to read the market We have some, you know, welcome notes and things like that that walk people through the different ways that we analyze The s and p 500 individual stocks So if many of you have heard these buzzwords like gamma and vanna and things like that So we have different charts and metrics to look at all of that We do have a discord channel as well. So you can toggle back between ours and uh in book maps And essentially what you're going to see here is Everything we do is about trying to highlight when the options market is in place So we don't think that every move is controlled by the options market But we're about identifying when options could be exerting some force In markets and and we are helping to identify and alert you to those conditions or situations So I'm just kind of curious. So when those kinds of um, I mean with your your your background and experience When you start to see that or you start to see some of these these options metrics and and maybe some of the spikes From what I've seen it you you have already kind of Factored in that scenario And you're kind of looking for it already Or or are you starting to look at the actual order flow? After the event or both You know to give you the direction Yeah, it's really both. I mean the levels that we put out at 3 a.m Are about predicting where order flow will change, right? So when we have the cloud notes with our key levels We think that at those key levels the order flow should change and that's what makes it a support resistance And then with hero it's about unveiling sort of what's happening in real-time intraday and so There we can sort of say, okay Here's what the options market's actually doing and then and then we want to react to that So that's why we're kind of you know mentioning that Well, I like to see how the order flow Reacts when we hit key levels. So, you know the market's sort of selling off here If we do get in the 4240 area I would want to see the options order flow term bullish and then the vixx start to sell off and that would Help me that that is going to be an effective bottom But from our for my lens I don't really have much to do unless i'm short here than maybe I want to cover at 4240, but You know so far again the options flow isn't Is really not very negative at all There's a drift higher in the vixx Which is you know arguably saying that that traders are holding on to their put protection or holding on to their downside protection And on a day like this when you have convex move in in energy and a lot of other things There could be other drivers So I would think that the options market would exist exert more force when we get to our Our levels that have been set out at you know, which are 4240 as you can see The upside it's 42 Yeah, interesting interesting So I mean and these these are the the spx Just so people don't get confused that you know, we're at 42 95 here or exactly Yeah, so right so all the all the options we analyze are spx index options and then obviously spiders So if you see a combo a combo is a combination of the spiders and the spx If it just says l3 that's a spx driven level And we're looking at the size of all the levels combined really so You don't want to ignore spiders. You don't want only look at spx And then the actual label position is at the equivalent futures price So you'll notice that 4,300 is the spx price, but it's listed at roughly 42 94 Which is the equivalent futures price. Good loss to there bruce I'm sorry, so Sorry about that Maybe I could could you go through just a kind of You know, maybe as a reminder or just an explanation here of what you mean By some of these levels in here maybe starting up at the level 4 up here combo Sure So anytime you see combo that is a level derived from looking at the all the options gamma and spiders and spx combined So we combine all that game when we look at basically a total s and p 500 view And then find the five largest levels And print those on the charts now the level has to be of a certain size for us to print those out So in this case, you're seeing five combo levels, right? But If we don't if we don't see that there's enough hedging flow or enough gamma at a certain strike Then it won't show up on the chart. The next you'll see So l1 is the biggest l5 is the smallest the next ones. You'll see our l3. So l123 4 and 5 That's looking at only the spx flow itself not spider flow So that's why it's just as l3 And then the other two levels that you see on the chart there is our vol trigger So our vol trigger is our proprietary level at which we see gamma flipping from positive to negative So many of you are familiar with the term of gamma flip Or the call zero gamma point We have a zero gamma point as well But but we just provide that so that people know basically what everyone else is looking at Proprietary level the vol trigger tells us where we think options Support and resistance based on that gamma flip is set to take place. So you can see in this case It was around 43 25 of the spx that fortunately proved To be major resistance this morning market rejected off of that level. So below that we see negative gamma positioned in the S&P 500 and above that vol trigger levels where we see positive gamma and lower Excuse me and lower volatility taking place Okay, and then the final I'm sorry anything that That has combo means it has spy as well But if it does not if it does not like a vol trigger put wall, you know, or just l3 for example That is just spx Right. So so combo l1 is going to be where we see most of the gamma Positioned and that should be our strongest support and resistance resistance level if you want to think of it like that Um, l2 is our next strongest level l5 is, you know, kind of our our lowest level Now there are hundreds of strikes obviously that also have gamma tied them But they're all for our for our models to care Um, so we only try to show on screen what the biggest levels are quote-unquote And then the the last level you see down there is the put wall the put wall tells you The largest put gamma is so large the strike that has the largest put gamma Interestingly our studies show that the movement of that we see that as a support level But actually the put wall shifting higher is a is correlated with rallies in the market 60% of the time when the put shifts to a higher strike The market rallies the following day. So there's some interesting, uh, you know correlations and studies We're able to produce you can read that article on our blog at spot game Okay, so let me let me find that here. Um, so we'll just go up here to You go to free resources and then blog Okay And then if you just search for option wall on that top sides, it's going to be buried in there a little bit But Okay, search site at the very top. Okay Yep, just type option wall Hopefully it comes up. There it is stats. There you go Okay So in here we have two two level We call one of our levels the wall, which is where most call game is concentrated The second one's called put wall. So if you just kind of read through this article It actually lays out the number of times our those levels have been touched Over the last couple years and what happens to the market Intra day and in the following day based on Interesting Based on when the market interacts with those levels. Yeah, yeah um Also under free resources here, maybe I know you guys did some really good videos. Is that under the free training here? Yeah, so we have a course called 30 for 30, which is a very basic, you know, quick walkthrough of Um, everything from what is the stock? What is it up to some of these core core concepts like gamma and vana and those types of things? So Um, you know, you hear those buzzwords and you just kind of want to understanding what that is That's what these three courses offer you. So there's a free thing called 30 years of education in 30 minutes We also have something called the spot game academy, which is a instructor led course. It's much more intense That's what that next link down there is so you can sign up for that And we will walk you through in depth, you know, what is uh, what are calls and puts obviously But what are all the greeks? How can you trade them? What are the second order greeks gamma vana, etc? What is implied volatility? How do you use it for your trading? And I think one of the key things to note here is that Even if you're just a futures trader and you trade options if you understand these concepts You know, there's the options complex and the s and p 100 is so big And we've all seen over the past year how options can move stocks, right? You know the game stops and amc's of the world's but tessels and all that Just understand that order. I think it really helps to unveil a lot of the price action that you see Uh, it can help you make it a more effective futures or or stock trader Yeah, excellent. Excellent. Um, okay, so Anyway, uh, yep, if if if people are interested in this, uh, you've got the The marketplace here, uh, you can uh, you can check it out. Um, and then uh, you'll have a Lot of resources here from the spot gamma academy, uh, and the blog and the website and courses, etc so, uh Yeah, anything else you want to go over? No, I would say that the the pro service is a free seven-day trial. So You know try it out if if if you like it awesome if you don't know how and and this one here Move along Okay, so, you know, you get uh, we want everyone to it takes a little while to get used to our nomenclature The way we call different, you know Levels out and things like that and get a feeling for what the data is telling you So that seven days should should give you hopefully enough time to to really get a good assessment And uh and figure out if if uh the spot game data is going to help you and Yeah, okay. Uh, well, uh, yeah, thanks print. Um, absolutely. Thank you. Yeah. Yeah, I think we've covered just about everything Let me take a quick look for some questions here. It's a little more difficult here in youtube To try to cover that. Um, but maybe we can uh, we can cover something here. Hold on Sure Yeah, I mean, it's just kind of requests for looking at certain things and then also about, uh, uh, pricing Etc So, uh, um, yeah, yeah, so we've been going just about over an hour. Um, you know, uh Really appreciate it, Brent. Um, you know, it's always just fascinating stuff. Uh, and a very unique perspective uh integrating Not only, uh, you know, real-time hedge impacts here Uh, but all these different metrics and and things that you come up with and correlations Uh, uh, and understanding the market in a much much bigger picture So, uh, yeah, thank you for uh for for all your insights here Yeah, well, thank you for the time to to speak with you and I appreciate everyone Their time as well. I know the market is pretty big here So it means a lot that everyone's taking a moment to listen to what we have to say All right. Thanks everybody and uh, yeah, we'll we'll uh good trading Brent and uh, we'll catch up next time Appreciate it bruce. Thanks. Okay. Bye. Bye