 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 disclosure. 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, creating 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 and 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 a directional bias. And the second step in my process is execution and I use real-time order flow and book map and real-time market maker hedging flow and spot gamma hero to confirm my thesis and for setups for entries and exits. And just to be clear, I will be talking about setups today and I will be talking about setups in an underlying asset and I will show some options trades from time to time, maybe today. But in general, I will be talking about, again, a setup in an underlying asset that can be taken any number of ways with shares, options, or futures. And now let's get started. My questions and comments are welcome and I will be watching the options-dug chat channel in Discord and the chat in YouTube for your questions and comments. Then finally, my agenda for today, what I wanna talk about today, first of all, economic data for today, events and earnings, and then also talk about upcoming economic data and events. Then I'll go through my positional analysis, then I'll review a few key setups and then I'll talk about the live market. Okay. So first of all, news items. There were a couple of data items that came out this morning. The PMI data that came out at 9.45 Eastern time, and this apparently did seem to have some impact on price action. Price reversed lower just a couple of minutes after that data release and that was much less than expected and also anything under 50 indicates contraction, non-expansion. And then also the jolts, number of the job openings came out at 10 a.m. and that was a little bit better than forecast. All right, so that was the data this morning. Then for the remainder of the week, there I think there is more PMI data, Fed speakers throughout the week and then also I believe the debt ceiling vote should take place sometime this evening. And then finally on Friday is the jobs report at 8.30 a.m. Eastern time. All right, let's take a look at positional analysis now. This is part of my planning process and this is the book map ES futures, SAP 500 futures. Before I dig into this chart, I'm gonna take a look at a larger timeframe. I'm gonna start with an SPX 30 day one hour chart and showing that SPX is now is still trading within a fairly narrow range right now between 4150 and 4200 and there are some key levels on this chart that I wanna point out. First, here's the lower and upper edge of the expected move for the week and SPX is trading well within that. And then also that's shown by the purple line, the purple dash line and the dash blue lines are showing the lower and upper edge of the expected move for the day. And now it appears that SPX is trading just above that level. There are also some key spot gamma levels on this chart. These are provided to spot gamma subscribers from a variety of platforms. And let me point out the key levels. First of all, here's the put wall at 4,000. That's the strike with the largest net negative gamma that can be expected to act as support and that there was no change from yesterday. And then the 4150 is the absolute gamma strike. That's the strike with the largest absolute gamma and that is there's no change there from yesterday. That is 4150 and then the volatility trigger at 4175. That is spot gamma's proprietary gamma flip level and it appears that SPX is trading just above that level. What that level signifies is 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 increase or enhance volatility. And then on the other hand, above that level, 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 or decrease volatility. And then finally, the call wall remains at 4,300. That's a strike with the largest net positive gamma that can be expected to act as resistance. So the only change in level for the SPX was the volatility trigger move slightly lower from 4185 yesterday to 4175 today. So that is a 30 day one hour chart for SPX. And let's take a look at one other SPX chart. This is a one day one minute chart. So now it looks like SPX is definitely trading above the volatility trigger and the lower edge of the expected move for the day. And Sarkis notes and YouTube sound is a bit low. I've heard that before. I'm sorry, there's nothing I can do about it. My microphone gain is set to max. If you're having trouble on YouTube, I suggest joining us in Bookmap Discord. It is free for everyone, whether do you have a Bookmap subscription or not. And we often, there are very many, many interesting discussions in Discord about options, future stocks, et cetera. All right, so those are the levels that are in play for today. And it looks like the 4,200 level up above could be a target if the price continues higher. All right, so again, here's Bookmap, ES Futures. And I have a couple of columns here of notes. The first, the Spot Gamma Cloud Notes. These are the same levels that we just looked at. Again, provided for a number of platforms, in this case for Bookmap in the form of Cloud Notes. I also have my own column of notes here. So I have the same SPX levels. So here is the 4,175 volatility trigger. SPX, I also have SPI levels on this chart. There's the 4,19, that is a combo three level. And that did act as resistance this morning. Just after the 9,45 AM data in other SPI levels, there's the 4,18, large gamma three level. And there's the lower edge of the expected move for the day. And that is for ES, not SPX. So slightly different level. All right, so we'll talk about setups in a few minutes. So those are the levels that are in play for today. And again, for SPX, the only shift in level was the volatility trigger shifting lower. For SPI, the volatility trigger shifted higher from 4,19 to 4,20. So a fairly small shift higher. And then the put wall actually shifted lower from 4,15 to 400. And the call wall and the absolute gamma strike remain the same for SPI. All right, so that is the S&P 500. Again, we'll talk about setups in a few minutes and get back to the live market as well. All right, let's take a look at the NASDAQ now. So this is the NASDAQ futures, NQ futures in book map. And I'm gonna take a look at a QQQ chart to take a look at some levels that are in play today. All right, so here's QQQ, let me just expand this a little bit. All right, so for QQQ, this is the 350 level here that did act as resistance this morning. And the 350 level is the absolute gamma strike. And that remains the same from yesterday. And then not shown on this chart is the call wall at 360 and that increase from 350 yesterday to 360 today. And in the spot gamma AM founders note, they noted that was most likely because puts were added to the 350 level. And remember the call wall is the strike with the largest net positive gamma. So if puts are added to the 350 level, then it's likely that the, that makes sense that the call wall could be at 360. And then also here's the volatility trigger for QQQ at 349 and that increased from 339 on yesterday. And it looks like that may be acting as resistance now. All right, so those are the primary levels that are in play for QQQ. And I'm showing all these levels, again, in my cloud notes for NQ. So here's the resistance area this morning. That was also lined up that that's the QQQ 350 lining up with the NQ 14,400 big round number as well as the NDX QQQ combo level at 14,355. That's a combo three level. And then now here's the QQQ 349 volatility trigger that level potentially acting as resistance. And note that NQ traded down and below the lower edge the expected move for the day. And those upper and lower edges daily expected moves have acted as very good support and resistance for NQ. They've been very reliable levels. So again, the lower daily expected move for NQ acting, apparently acting as support. All right, again, we'll talk about setups in a few minutes. I'm going over the levels in play again for QQQ, the volatility trigger shifted higher, the call wall shifted higher, most likely due to the addition of puts at the 350 level. Okay, so those are the shifts in levels and the levels that are in play. Let's take a look at one other thing, actually a couple of other things. First of all, this is the Vana model for SPX. And I like to look at this every day. What this chart is showing is how market makers Delta Notional showing on the vertical axis changes with changes in price shown on the horizontal axis. There are two curves on this chart and the gray curve is showing how market makers Delta Notional changes in price only. And what this is showing is if price increases from this level, market makers will need to sell futures to edge their Delta exposure. And that's typical in a positive gamma environment. And what the purple curve is showing that adds implied volatility to the equation. This curve right here. What this is showing is if price increases, then market makers will have less Delta Notional to hedge as predicted by the Delta only curve, the gray curve. On the other hand, price decreases. Market makers will have more Delta Notional to hedge so as price starts to fall and implied volatility increases, they will have to sell futures to hedge their Delta exposure. And that's typical of a negative gamma environment. All right, let's see where SPX is trading now. And I've got around 4182. So let's locate that on this chart, 4182. All right, so 4182 is above the volatility trigger. What this Vana curve is showing is if price continues to increase up to a certain point, market makers can buy back short hedges. So they will be providing a tailwind to price up to a certain level, then they'll have to start to sell. On the other hand, if price decreases from this level, they'll have to sell futures to hedge their Delta exposure. And that will tend to enhance a move down. All right, so that is the Vana model for SPX indicating how market makers can be expected to react as price moves up and down and implied volatility changes. And then finally, let's take a look at some key levels that I watch every day. This is the Spot Gamma Index and Gamma Notional for SPX by NDX and QQQ. And this is indicating market makers position on the Gamma curve for these index indices. So first of all, the Spot Gamma Gamma Index, that's a proprietary measurement of total market Gamma and it ranges from minus four to four for being indicating positive Gamma and that would indicate, again, market makers would need to trade against price to hedge Delta exposure. And we can also look at the, just the numbers here. So market maker Gamma Notional for SPX is positive and that number did decrease from yesterday, it became less positive, but still positive. And then for SPI, the number is negative, but they became less negative than yesterday and then for QQQ, the number is slightly negative and that yesterday the number was positive. So slightly negative Gamma for QQQ and SPI and positive Gamma for SPX. So these numbers are not significantly large or small, somewhere in a, I guess, kind of close to a neutral range. All right, so that is the positional analysis based on this. I was really looking for a range day with not much of a directional bias for the index products. I think really what has been driving the market for the last few days, actually the last few weeks is large cap tech stocks. And then most recently with the artificial intelligence AI stocks kind of leading the way. So here's the heat map for the S&P 500 today. And of course, in the recent few weeks, these stocks have been leading. Apple, Microsoft, Google, Nvidia, Amazon's not showing on here and I'm looking for Tesla. Don't see it at the moment. Oh, here it is over on the right. So these stocks have been leading and they're not so much today and it looks like today is more defensive, healthcare, utilities, consumer staples leading today as well as Apple, which is typically a fairly defensive stock. All right, let's take a look at some setups now. So again, thesis for the day, looking for lower volatility based on the gamma notional, positive gamma notional and somewhat of a range day. All right, so let's take a look at some setups now and let's go to take a look at hero. This is for the S&P 500. What this chart is showing is price for in terms of SPX and market maker hedging flow or hedging pressure for a combined signal of SPX, spy, and ES futures into one combined signal. Notional value right now is positive. Positive 631, 661 million. So this is showing options, trades, calls and puts and market maker hedging activity. And before I zoom in on this chart, let's just take a look at the individual components. So here's SPX and that is positive notional value for the day, 581 million, spy, and this is very negative minus 2 billion. And this is pretty similar to yesterday that spy traders were taking negative delta positions. So they're most likely selling calls and buying puts, negative delta positions, or could just be the put buyers dominating. And then the final is ES futures and that's positive 2 billion. So that's canceling out the spy trades and it's up to SPX to get the positive 2 billion. To give us the total signal here. All right, so let's zoom in on this. All right, so this is at the start of the RTH session. And what this is showing is, I'm gonna zoom in on this now, that this first setup for the morning was a confirmation short. So traders right after the 945 AEM data and remember that reversal that we looked at in the bookbap chart. So hero indicated that traders were taking negative delta positions and price responded lower. All right, so let's go take a look at bookbap now. I'm gonna zoom in, let's go back to ES. All right, so here's the reversal that I talked about earlier. Trend break, reversal at the spy 419 level as well as the ES 4200 level. Note the shift in order flow. All the aggressive sellers coming in there. You can see that with the pink volume dots and then also cumulative volume delta shifts from rising to falling. That's shown by the blue line here, the dark blue line and then the falling yellow line is showing sell stop orders, fueling the move lower down below the lower edge of the expected move and actually below the volatility trigger until finding support around ES 4175. And note all of the bookmap showing all the buyers coming in there with the limit by orders. So that was the setup confirmed by hedging flow and stops and also order flow. So there was a question in Discord earlier on what I use for confirmation. And here it is. I'm looking at order flow. We just looked at hedging flow with SWAT Gama Hero and stops and icebergs and it takes a while but the larger traders, oops, wrong tool, larger traders start selling the move lower with iceberg orders they use to hide their size. All right, so there you go. Take F, not sure how you pronounce that. That's what I use for confirmation. There it is. Again, hedging flow and order flow. Very good confirmation of the trade and fake outs. He had asked about before fake confirmation. If you're concerned about that, just buy a put and let it play out. So I think there was a very strong confirmation for short here, no question about it. All right, so that is the short setup this morning in the S&P 500. Let's take a look at NASDAQ now. NASDAQ, let's go take a look at Hero for NASDAQ and this is a combined signal similar to the S&P 500 for NDX and QQQ. Assume it on this. And this was in the morning, the setup was more clear. This was a nice, nice divergent short. So Hero started falling. Then Price follows a few minutes later, giving you time to look for a level to lean against for short. All right, so Truman asked in YouTube, if the blue or yellow colored lines in bottom chart go below zero, that indicates a cell stop or cell iceberg. We'll look at that in just a minute. All right, so there's the divergent short setup for the NASDAQ this morning. Let's go to book map now. All right, so what Truman is referring to are the lines in the sub chart here. And this is the blue line showing iceberg orders. And this is what large traders use to hide their size. And I'm not looking at above or below zero. I'm looking at the slope of the line. So I know here large traders are buying with iceberg orders. And then that stops and starts to drop. And now it has picked up again. So that is the light blue line showing iceberg orders. These are in some mode and that's what I prefer. So I have the sub chart indicator again for icebergs light blue line. And then I also have the on chart indicator to show the incidence, the particular order. So there's the, there's cell iceberg orders there. Shown by this, I don't know what, I don't know how you would describe that icon with the E34 slash two or E369 slash four indicating 369 contracts executed for different transactions. All right, so that is the iceberg indicator. And then the yellow line is showing stop orders. And a rising orange yellow line indicates buy stop orders. So that was kind of a, that was a buy stop fueling that sharp move higher buy stop orders, stop, stop run up to this level here. And remember that an hero showed that options traders started to fade this move. They were taking negative delta positions. So then the stop orders level off and then stop orders, cell stop orders helped to fuel the move lower. And then finally this pink line, it changes from pink to dark blue. That is cumulative volume delta all in accumulation or some mode. So I'm just looking at the slope of the line. But then if you do want to look at the numbers and sometimes it is important, you can look at the total numbers over here. This is for the entire session. And really stops and icebergs don't come into play until the 930 cash open. All right, so we saw that options traders started fading this move higher a few minutes before price move lower. Let's zoom in on this. So this again, there was a stop run up to the, that kind of cluster levels there and then order flow shifts bearish as options traders were taking negative delta positions. Note the aggressive sellers coming in, all the pink dots and moves price lower to the lower edge the expected move for the day. So very clear short set up there in the NASDAQ. And there were a number of ways to take that. You could have sold futures or bought a put in QQQ. And let's take a look at that. So here's QQQ put. So per contract taken off at the lower edge of the expected move, about $115 profit per contract. And that is buying the 350 put that expires today, 31 May at the 350 level. So a couple of ways to take that trade again. One was just selling futures, either full futures or micros or you could sell QQQ shares or buy a put. And really one of the easiest ways to take that trade was just to buy a put. All right, so that's the NASDAQ this morning. Nice short set up, strong confirmation. Let's take a quick look at some stocks and then we'll go to the live market. All right, so here's AMD. Let's take a look at HERO for AMD. So HERO here is showing that traders, we'll zoom in on the warning just a bit, were started selling calls and buying puts shown by the falling orange line for calls, falling blue line for puts, and the notion of value is negative for both of these. Let's take a look at the total line. So options traders were fading this move. Let's take a look at one other thing. Now I posted a setup for AMD yesterday and this is one of the AI meme stocks that has gone parabolic in the last few days, really after the NVIDIA earnings last week. And let's just take a look at something. I'm gonna take a look at the, an options chain for yesterday. It's a little bit more pronounced from yesterday. Sorry, I just updated to Microsoft 11 and there's still some confusion about certain things. So anyway, this is from yesterday and this is an options chain that helped provide confirmation for setup yesterday. So what I wanna point out, again, this is an option chain for options that expire on Friday, 2 June, expires on Friday. And this is an option chain again for AMD from yesterday at the close yesterday. And what I wanna point out, the thing to look at is the implied volatility for puts and for calls. And note that the numbers for the calls are higher than the numbers for puts. And this is somewhat unusual to have such a skew. So let's take a look at, right now, at the time that I took this, AMD was trading at about 125. So let's take a look at, let's say a five point out of the money call. So the 130 call. And I'm judging the expense of this by the implied volatility. So that is 70%, 70.33% for a call that is five points out of the money for AMD. Now let's take a look at a put that's five points out of the money. Let's say one to be down one. So there's the 120 put at an implied volatility of 57%. So 70% for calls and 57% for puts. And that is pretty unusual that there's such a call skew. And when this is really how the, I don't know from the AMC GameStop, Meme Stock, Mania several years ago, this is really one thing that contribute to the end of that is that the implied volatility for the calls, the implied volatility for the calls became so expensive that it was not, it just didn't make sense to buy those calls. And in this case, it's made a lot more sense to sell this on high implied volatility rather than to buy it. And that's what traders were doing yesterday. And that appears to be what they're doing again today. So I'm showing this from yesterday that the skew is not quite as pronounced after the drop yesterday. And there's not as much demand for buying calls, right? So again, that's from yesterday and similar for Nvidia. And we'll take a look at the live options change today. So let's go take a look at book map for AMD. So AMD downtrend, let's see 120, see if that's a spot gamma level. AMD, no, it's not. The 125 is the key gamma strike. So AMD is trading below that strike. And similar for Microsoft, not quite as strong an AI component, but definitely included in the AI cohort. So there is Microsoft and traders are buying puts and buying calls, put buyers winning, right? Let's go take a look at Microsoft and book map and another downtrend. Let's go back and take a look and see if there are any spot gamma levels. So the call wall, 330 is the key gamma strike and the call wall, this level. And was the target for the move down this morning. Note the high liquidity at that level. Call wall, key gamma strike target. So now Microsoft is trading again above its call wall. And then finally, let's take a look at Nvidia. And this is a huge drop. Huge drop in Nvidia. And let's take a look at Hero for Nvidia. All right, so Neo Core asked, what was that SKU taking just after the open, the SKU chart that I showed that the options chain for AMD was taken at the close yesterday. So that again, that's an options chain for AMD for June 2nd, Friday expiration that was taken yesterday. All right, Nvidia, note the 400 key gamma strike acting as resistance and traders taking negative delta positions and they can continue to do that and they're selling calls and buying puts. And they could be selling the calls to finance the puts, which would make a lot of sense. Let's go take a look at book map again. So remember 400 is the key gamma strike and price reverse shock sharply at that level, 400 key gamma strike and good for an almost 20 point move lower. So those traders selling calls and or buying puts made a fortune today for Nvidia. And let's take a look at, let's go to thinkorswim. We'll take a look at an options chain for Nvidia. Well, this is one trade that I was looking at. This is a 132 butterfly, kind of a high probability trade. And at the time the, and this is for the second, June 2nd, and the one standard deviation move was right at the breakeven around 412. So what this is showing is if price increased, you could make a maximum profit if you held it right, right there to expiration, you know, four to 500. Otherwise you take a $59 credit. So one way, one kind of conservative way. Let's take a look at the options chain. This is for Friday. Right now, Nvidia is trading around 385. So let's take a look at say the 400 strike implied volatility 60%, and then so that's 15 points out of the money. Then we'll go to the 370, and that's trading for 53%. So again, there's still somewhat of a call skew in Nvidia as well. Certainly probably not as pronounced as yesterday. All right, so Truman asked, do you think AI stocks will be the new meme stocks? And yes, they already are. Now again, this may not, you know, who knows how long this will last. This, you know, again, this effect of the implied volatility increasing indicates an increased demand for calls. And at a certain point, and as we've seen yesterday and today, that increased demand, increased price, increased implied volatility tends to attract call sellers, not call buyers. So that tends to kind of stop the call buying that is driving price higher on these stocks. You know, whatever they are right now, you know, it's AI related. So Sean asked, so with IV so high, why not sell some call spreads way out? Yeah, I'm sure traders are doing that. I mean, you can do anything, you know, anything you want. I'm just showing kind of an immediate example of the closest expiration, June 2nd. And I showed another way to trade that with that ratio butterfly. You know, again, there are any number of ways that, you know, infinite number of combinations of expirations and trades that you could take with options. The point is that there's a call skew that implied volatility on the call side is higher than the put side. And they're just, you know, I guess a couple of other stocks. I haven't looked at these yet. Let's, we'll take a look at an options chain for Marvell also included in that cohort and slightly higher implied volatility for calls. There's another one. And I think this company C3 AI reports earnings after the close today, the volatility on the call side and the put side's high, little bit higher on the call side up to 400%. All right, so that's, you know, just another tool that you can put in your toolbox to look at these stocks. All right, let's take a look at live market now. Let me check for questions and take F, ask can I access to the live stream chat for questions in the future. So, yes, you want, it looks like you are in the options with Doug live stream. So apparently you're watching and then you can post your questions in the options dash Doug chat channel. All right, so block whiz ask if you get a chance. It would be great to see how to map QQ Q level in the NASDAQ book map. All right, so let me show you what I do. And I don't have the badge shown on this chart. Let me find another chart. So what I have block whiz is a series of think scripts and I posted all these in the options dash Doug chat channel. And here is one that calculates the NQ QQ ratio and it calculates it in real time. So I just watched this for a couple of minutes kind of take a, you know, take an average. So what I'm using today is the NQ to QQ Q ratio of 41.133. That's what I'm using today. And again, I've posted these all in the options dash Doug chat channel and discord. Just take a look at the pin icon in the upper right and you will, you'll find all of the the scripts. And these are, this is for think or swim. And if you don't have think or swim, you can take a look at the script and perhaps write a script for whatever platform you use. All right, so there's a question to take a look at NQ. So here you go. NQ again found support at the lower daily expected move. It took a while, a couple of tests, deep test almost down to the 14,250 level. And note that larger traders are starting to buy with iceberg orders looking at the rising light blue line. And you can also see the orders for buy iceberg orders as price makes the low down at the lower daily expected move. Let's take a look at hero and see what options traders are doing for NASDAQ. And they're, for Nvidia, they're still taking negative delta positions. Let's take a look at NASDAQ. And NASDAQ, now they are options traders are starting to fade the move and they actually started around 130. So at 140, let's take a look at that on the NASDAQ chart. So here's 140. So they at the QQQ 349 level and that's the volatility trigger. And also the NQ 14,350 level, they started taking negative delta positions. And since then order flow has also been negative. Note the following cumulative volume delta cell stops. And then also now larger traders are starting to sell this with iceberg orders, sell iceberg orders. So I would certainly be looking for a short here. Let's take a look at the SB 500. Now that doesn't, that's not a recommendation. You know, that very well could be wrong. It looks like order flow, all these aggressive buyers are coming in. It looks like some aggressive sellers coming in, some small pink dots, something to keep an eye on. Let's take a look at the SB 500. Looks like the ES has made it all the way back up to the 4,200 level. And then the also the SPI 419 level that acted as resistance this morning. Let's see what options traders are doing with the SB 500. All right, so we know for NASDAQ, they're fading the move higher, look at the SB 500. And options traders may be starting to fade the move higher as well. Let's just see if changing the look back period to 30 minutes gives us a little bit more clue that yes, options traders were fading this move higher. And let's take a look at VIX. And VIX is definitely continues to drop. All right, kind of a mixed picture for the SB 500, but options traders are starting to fade this move higher at the resistance level from earlier in the day right here at the SPI 419 level. All right, that's all I have for today. Take-off and block whiz, I hope I answered your questions. It looks like you're both in the live stream. So again, I hope I answered your questions. And Truman says, I use VIX as a poor man spot gamma. Is that a decent idea? Yes. Now keep in mind that the VIX is an equation. It mainly looks at options around 30 days to expiration. So it's not perfect, but it's definitely something to look at. And it can be a very strong confirmation of price moving higher or lower. I look at VIX all the time. All right, so options traders continue to fade the move lower. We looked at NASDAQ, they were fading the move lower, also with the SB 500. All right, that's all I have for today. It's been an interesting day, interesting week so far. And I will see you tomorrow. Thanks for all your questions and comments and have a great rest of your day. Thanks, Mike.