 Hello, everyone. Welcome to options with Doug Streaming live Monday Wednesday and Friday at 1 30 p.m. Eastern time on book map discord and the book map YouTube channel Before I get started. I need to go through the disclosures General disclosure all book map them in a materials information and Presentations are for educational purposes only and should not be considered specific investment advice nor recommendations Riscous goes you're trading futures equities and options involves substantial risk of loss It is not suitable for all investors past performance is not necessarily indicative of future results Here's my contact information the best way to get in touch with me is through discord may name on discord as Doug P Also in book map discord. There's an options dash jug chat channel. That's a great place to post questions Comments and content related to the topics of my presentation and the topics of the channel that I'll go through in just a moment I'm also on X formerly noticed Twitter. My name there is that Doug plus Here are the key tenets to my approach for trading. This is the basis of my approach to trading I believe that options trades and market maker hedging activity are key drivers of price and many stocks and futures and Certainly in the large cap Stocks that I follow the mag 7 stocks as well as the equity index futures like the S&B 500 and the NASDAQ and for the S&B 500 SPX is the underlying index spy as the ETF version of that index and ES the ES in many futures That's a derivative of SPX and when traders buying sell puts and calls and SPX and spy Market makers take the opposite side of those trades and they hedge their delta exposure With ES futures and for the NASDAQ 100 NDX is the underlying index QQQ is the much more liquid for ETF version of that index and NQ is a derivative of NDX and when traders buy and sell puts and calls and NDX and QQQ Market makers take the opposite side of those trades and they hedge their delta exposure within Q futures The focus of my presentation today 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 at the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and Volatility for the day as well as the directional bias and the second step in my process is Execution I look at 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 or entries and exits and when I talk about setups today I will be focusing on an underlying asset for example setups in the SB 500 Can be taken any number of ways with the S futures spy shares spy options SPX options or even ES options Questions and comments are welcome and I will be watching both the options dash jug chat channel and discord As well as the chat and YouTube free questions to comments. Please feel free to post. I'll do my best to answer your questions Here's my agenda for today Monday, April 22nd First of all, I want to go over news items economic data and events coming up for the rest of the week Then I'll go through my positional analysis from earlier today I want to talk briefly about the dispersion trade and that was definitely in play last week And then I'll review some setups from earlier today And then I'll take a look at the live market and when I get to the live market if anyone has any stocks They want me to take a look at please let me know and I'll be glad to do that All right, let's get started first of all news items economic data events. I should add earnings to that For this week really begin tomorrow 945 a.m. Eastern Time tomorrow PMI data comes out and then at 1 p.m There's a two-year node auction and then after the market closes Tesla reports earnings on Wednesday Durable goods orders Economic data comes out at 830 a.m. Eastern Time and at 1 p.m. There's a five-year node auction and then meta reports earnings after the market closes and then on Thursday the GDP Report comes out at 830 a.m. Eastern Time and There's also another node auction. That's at 1 p.m. For the seven-year notes and then Google and Microsoft report earnings after the market closes and then on Friday the big economic data Release for the week PCE data comes out at 830 a.m. Eastern Time and then Michigan consumer sentiment at 10 a.m So Big data releases this week as well as for the 7 mag 7 stocks report earnings this week Or let's move on to positional analysis now I'm going to start with the SB 500 This is the yes futures in book map and Before take a closer look at this chart. I want to step back take a look at a higher time frame I'm going to go to the underlying index That is SPX We've all seen this chart before Rally began last year SPX rallied up for five months before big this correction began on April 1st So let's go take a look at that now So that was a One-day chart for SPX now. Let's take a look at a one-hour chart. This is a 30-day one-hour chart This is showing the top-end of That green trend line High for SPX around 52 65 April 1st downtrend began then began to accelerate All right, let's take a look at the levels on this chart First the dash purple lines are showing the lower and upper weekly expected move. This is based on the options market This is based on the closing price for SPX from last Friday. These lines will remain in place for the entire week and then the Lower and upper daily expected move that's shown with the dash light blue lines Know that SPX is now trading above the upper daily expected move Also based on the options market based on the closing price for SPX from last Friday Those lines are updated every day. I post these levels in In the options dash jug chat channel every evening the day before So again SPX trading above the upper daily expected move All right, so that is a one-day chart now, let's wrap this up with a Of taking a look at the spot gamma levels on this chart The the red solid lines are spot gamma levels. These are provided to spot gamma subscribers They're available on a variety of trading platforms Again, this is thinkorswim. I'm going to point out the key daily levels First of all, here's the put wall at 4900 That's a strike where the largest net negative gamma that can be expected to act as support note that level did move lower from from Friday The next level up is 5000 that is the absolute gamma strike. That's a strike where the largest absolute positive and negative gamma So that's where most of the gamma weighted open interest is concentrated and above that is the volatility trigger that is obscured by the zero gamma level, which is Very close So that is the volatility trigger that is spot gammas proprietary Volatility flip level below that level market makers position on the gamma curve is negative in a negative gamma environment Market makers have to trade with price to hedge their delta exposure That tends to enhance or increase volatility and note. This is a very negative gamma environment Gamma notional at the beginning of the day for SPX was quite negative and SPX is still trading below the volatility trigger in a negative gamma environment and just for reference Above that level market makers position on the gamma curve is positive in a positive gamma environment Market makers have to trade Against price to hedge their delta exposure that tends to subdue or decrease volatility and Just above that is the call wall CW there at 50 100 that's a strike where the largest net positive gamma that can be expected to act as resistance Note that level did move down as I expected from last week. It had moved up to 5,500 On Friday and given the options expiration. I expected that level to move lower and that's exactly what it did In this case down to 5,100. So again, that's a strike with a large net positive gamma that can be expected to act as resistance so the potential resistance at 5,100 potential ceiling for price and potential floor at 4,900 our for SPX volatility trigger put wall and call wall a move lower that is bearish all right, let's Take a quick look at a one-minute chart just to get a closer look at the SPX levels and play for today There's this key 5,000 level Did act as resistance earlier today now SPX trading above that also the upper daily expected move and then this 4977 level Was in play earlier today That was noted as support in the SWAT gamma AM Founders note that is a large gamma 4 level all right gap up move down Lower the day right around 4970 And now SPX continues to rally All right, let's go to book map now In the book map. I have my own cloud notes So I can show SPX levels on this chart. There's that 5,000 level That is the absolute gamma strike that was noted as resistance in the spot gamma AM Founders note There's this 4977 level notice support. I also have spy levels on this chart There's the 500 absolute gamma strike put wall so it looks like The SME 500 has recovered the spy 500 put wall also we have key levels for ES on this chart There's the upper daily expected move and the 5,050 level just above that all right now There is a difference in price between ES and SPX that offset today is right around 37 points so I'm showing SPX 5000 at ES 5037 That does change a little bit every day note that I do post my The index relationships that I'm using every day. I post those in and discord All right, so key levels earlier today For the initial move after the cash open this 498 level that's spy 498 level continued to act as resistance SMB 500 move lower 497 resistance SB 500 broke below the 4977 support level also Spy 496 and is now continuing to move higher Again, the SB 500 has recovered the 5000 level and working on the spy 500 level all right shifts and levels again. I mentioned for SPX Volatility trigger put wall and call wall moved lower and strangely for spy all levels remain Unchanged That's not the case for SBX and DX QQQ so spy kind of stands out with no levels All levels key daily levels unchanged Or let's take a look at NASDAQ And we'll take a look at setups in just a few minutes. All right, so here's the NQ futures a book ma'am Let's take a quick look at The underlying index charts first of all QQQ earlier today the Regular trading hours are shown with a dark shaded portion to the right earlier today just after the open 418 resistance and then the 414 acting as support also this 413 4 6 4 16 point 3 1 C3 level acting as support Then resistance This is before the cash open support then resistance and now QQQ is up to the 419 level. Let's take a quick look at NDX and Then we'll get back to book ma'am NDX all four key daily levels for NDX did shift lower So right now NDX is trading still below its call wall at 17,250 and The volatility trigger at 17,000 220 All right, let's get back to book ma'am Here's that 418 level resistance earlier today and then Yeah, NASDAQ traded down to the 414 level that is also the 17,150 and can you 17,150 and also the NDX 17,000 level so that cluster of levels acting as support All right, so it looks like NQ is now up to its upper daily expected moves So again, I have my own cloud notes so I can show NDX levels QQQ levels as well as key levels for NQ like the upper daily expected move and also the the big round numbers the zeros in the 50s. All right, we'll talk about setups in a few minutes. So again for For NDX all four key daily levels shifted lower that is bearish and for QQQ The volatility trigger put wall and call wall all shifted lower. That's also bearish All right, let's take a look at gamma notional see how market makers were positioned in the options market at the beginning of the day And then we'll get to some setups So this is gamma notional Market makers position on the gamma curve At the beginning of the day for the SB 500 and NASDAQ note all these numbers are negative. They're quite negative And they did shift higher From friday that is to be expected after Options expiration some of that gamma Did expire on friday. So there's still quite negative, but slightly Less negative than than on friday again To be expected After expiration. All right, let's see what what this means I'm going to take a look at the van a model This will give us a graphical representation of what I'm talking about So what this chart is showing is Delta notional market makers delta notional on the vertical axis for spx spot price of of spx on the horizontal axis So this curve is a typical typical of a negative gamma environment All right, there are two curves on this chart actually. So the first Like gray curve shows how market makers delta notional may change with changes in price only And the purple curve shows how market makers delta notional may change with changes in price and applied volatility And that change in delta notional with the change in applied volatility is the van effect van is a second order greek All right, let's take a look some some prices So we know the low of the day Was right around 49 70. Let's see if we can find that on this chart So that's right around here So what this chart is showing as price Is increasing Market makers delta notional Is decreasing So they can buy back short futures This is showing the difference Between the Delta notional to be expected with changes in price only And delta notional to be expected with changes when you add in implied volatility I always like to take a look at this especially in a negative gamma environment So this is adding fuel to any move higher Let's take a quick look at Give me just a minute. Sorry just a moment. Let's take a look at vix So we know that price has been rallying moving higher. Let's take a look at vix As a proxy for implied volatility zoom in on this chart dark shaded portion Regular trading hours vix has been dropping steadily Since about 1115 And we'll see that's That's about when this rally began. So vix dropping So we know the price is increasing implied volatility Is dropping leading us to this Vanna model the purple curve Put vanna rally Contributing to this move higher All right, so based on this thesis number one shifts lower levels that is bearish thesis number two Put vanna rally price starts to increase some of the Put delta Has expired from last week put gamma put delta expired from last week Market is starting to rally and now market makers can buy back short futures All right, so it looks like initially thesis number one was in play and now The main thesis Number two put vanna rally Note the vix Started to shift sharply lower right around 1115. That's when this rally began All right, let's take a look at that some setups now Oh first of all, I want to talk about the dispersion trade This was going on last week Not really in play for today the bearish dispersion trade that I want to talk about this for those for you Spot gamma subscribers spot gamma did cover this in detail in the PM founders note last friday and the reason I'm bringing this up I don't know if anirag is here. He brought this question up yesterday and let's take a look at Go to hero So last week What was happening? Let's take a look at this mag seven signal Both puts and calls were falling What this is indicating is that Large traders with enough money to move the market were buying risk reversals. They were selling calls and buying puts So that was in the mag seven stocks single stocks and to You know, I guess for what a reason to hedge themselves. They were buying long index calls So anirag had asked about the the start difference in the hero signals between mag seven Which were both moving down the put and call line And the in nasdaq signal moving higher traders are buying index calls in the example that Spot gamma provided they were showing that traders were buying spx calls while they were Buying that risk reversal in mag seven stocks All right, so that's the dispersion trade Anirag, I hope you're here and I hope you I assume you're a spot gamma subscriber Hope you saw that More detailed explanation In the PM founders note. So that was going on last week All right, let's take a look at today. So let's move on from positional analysis now to some setups I'm going to start with the sp500. I want to take a look and see what What options traders Have been doing today So this is the everything that we've looked at so far other than the book map is based on static data it's Spot gamma takes open interest data that's updated once a day sometime overnight They apply their proprietary algorithms to come up the levels The put wall call wall absolute gamma strike volatility trader And those levels do change every day As I have shown All right now, let's move on to execution real-time data now I'm going to start with again looking at what options traders are doing And this is the hero signal hedging impact real-time options Hiro, this is available to spot gamma subscribers Again starting with the sp500 what this chart is showing is options trades and market maker hedging activity For a combined signal of spx by xsp and es futures all into one combined signal So if you trade any form of the sp500, this is the signal that you want to take a look at a The lines on this chart the white line is priced for spx The purple line is the hero signal And a falling hero signal Indicates traders are taking negative delta positions That means they're buying puts and or selling calls A rising hero signal means they're taking positive delta options positions They're buying calls and or selling puts All right, let's zoom in on this chart I'm going to zoom in So let's take a look at a couple setups. So first of all this move higher First 20 minutes Was really a head fake Right around 950 options traders started taking negative delta positions And the sp500 chopped around And started to move lower about 20 25 minutes later setting up a great divergent short this morning All right, so let's go take a look at that in book map And then we'll take a look at this reversal higher in just a minute. Yes All right, so you know looking here in hindsight This move lower is it's fairly small Compared to the move higher Later on today. Let's take a look at this. It was a nice Divergent setup In the morning All right, so remember right around 950 options traders started taking negative delta positions And price chopped around the 498 level Started to make lower highs As the hero signal reversed lower And then price broke below vwap Shown by the slight blue line Then we vwap became resistance The volume dots in book map are showing market buy minus sell Green volume dots indicate there are more buyers than sellers Magenta dots indicate more sellers than buyers So as price Traders were taking negative delta positions price broke below vwap aggressive sellers came in Note the falling cumulative volume delta All right, that is the setup The short setup earlier this morning Again pretty small in comparison Compared to the move higher So let's take a look at that So note this high liquidity at 5,005 rejecting price Acting as support aggressive sellers on the way down magenta volume dots Aggressive buyers start to come in note the rising light blue line that's showing Large traders buying that move down with iceberg orders. They use iceberg orders to hide their size Here this is shown iceberg orders shown by the on-chart indicator Not sure why the iceberg orders There are not shown on the on-chart indicator for this this portion of the Subchart indicator moving higher And let's go back and take a look at hero again see what options traders were doing So we know vix started to reverse higher right around 1115 And the hero signal Makes an equal low and then starts to move higher as start traders started taking positive delta positions And that really continues and again S&P 500 has recovered the spx 5000 level as well as the spy 500 level and continues to move higher All right. That's the sp 500. Let's take a look at nasdaq similar pattern Just reading order flow here Here's the cash open 930 quick move higher aggressive buyers And that reverses lower aggressive sellers start to come in shown by the magenta volume dots cumulative volume delta shifts lower sell stop orders shown by the Falling yellow line also fueling the move lower down to this cluster of levels again the qqq 414 level Notice prices moving down large traders are buying this buying the move down fading that move With iceberg orders again, they used to hide their size. Those are by iceberg orders Sellers are exhausted aggressive buyers starting to come in large traders continue to buy with iceberg orders and nasdaq now up to the ndx 250 absolute gamut strike call wall All right, let's go take a look at hero see what options traders are doing All right, so for nasdaq I like to take a look at the mag 7 signal All right, so this has been bullish all day. Let me show you what this is This is a combined signal For the stocks known as the magnificent 7 options trades market maker hedging activity for apple amazon google meta microsoft nvidia tesla All into one combined signal these stocks make up a very large component of the nasdaq 100 And this is what I use when i'm trading the the nasdaq All right, i'm going to zoom in on the morning all right, so here's the Just like the sb 100 quick move up about 20 minutes Hero signal reverses lower Traders start taking negative delta positions nasdaq moves lower All right, i've already talked about the move lower in In book map here the clear signs volume dots Stop orders Nasdaq find support Right around 1115 that cluster of levels let's go back to Back to hero now Zoom back out so nice divergence set up Mag 7 hero signal starts to move lower right around 1025 Setting up this divergence long As the nasdaq move down to that cluster of levels again So dip buyers definitely in here in the mag 7 stocks Let's see what they're doing So they're selling puts and buying calls. I'm going to have to jump jump back All right, so this is This is the smb 500. This is what the uh the smb 500 portion of the dispersion trade looks like buying index calls Put signal fairly flat All right, let's go back to mag 7 So in the mag 7 in this case They're also taking bullish positions Rising blue line indicates traders are selling puts to get advantage of higher implied volatility And they're also buying calls So this is the opposite of that bearish risk reversal in this case. They are selling calls Selling puts and buying calls. So taking that other The the flip side of that risk reversal And this is definitely driving nasdaq higher All right, let's take a look at some stocks There were some uh Good setups this morning First one I want to take a look at is amd I'm going to shift back to the total signal here. Just make this a little bit easier to look at I'm going to have to jump Back Focusing on the morning. This is what I do most of my trading So here in amd We see that 150 is the key gamma strike That did act as resistance Initially the hero signal was pretty flat Then starts to move lower Right around 945 And it Took about 10 minutes for amd to reverse lower at the 150 key gamma strike setting of a very nice divergent short and amd In the morning session. So let's go take a look at book map Let's go to amd Sorry having a little bit of difficulty with my pen tool Let's go to amd All right, here's the reversal at the 150 key gamma strike Let's zoom in on that Now it looks like amd is recovered Trying to make it back up to that 150 level. All right, so when I zoom in you can see that There was some time to set up the short So traders started taking negative delta positions about 10 minutes later amd reverses lower at the Just below the 150 key gamma strike classic absorption there at that level This is the heat map and book map showing a history of the limit orders in the order book And that liquidity typically comes in at the cash open and remains there until Those are in this case limit sold orders They'll remain typically remain in the order book until they're filled And there was absorption just below that level amd reverse lower as traders were taking negative delta positions Or let's move on Next is amazon Right another head fake move lower move higher In the more in the morning first 20 minutes 10 maybe 10 20 minutes aggressive buyers come in And then amazon reverses sharply lower Now trying to recover that 178 level again Let's see what options traders are doing. Let's go to amazon flow alert does come in And that might have been Might have been misleading but quickly the Hero signal levels off moves lower traders taking negative delta positions And price moves lower All right, let's take a look at meta now All right, I did I did post this setup in discord This is a very clear signal meta making a series of lower highs then reverses Right around vwap Just below this 490 level Let's see what options traders are doing Let's go to meta Let's zoom in on this So what i'm looking for a reversal in In hero i'm looking in Looking at or considering Two different circumstances So in this case Let's say case one Flow alert And then the hero signal this is indicating a shift from A significant shift from positive delta to negative delta Or vice versa. So that's what the Flow alert is showing So this comes in a little bit before the signal actually shifts lower So this is case one for a shift in hero flow alert And then the hero signal shifts lower Otherwise I would be looking for a lower high Lower highs lower lows Before Assuming that hero had shifted But in this case I see the Flow alert And then the sharp move lower Indicating traders We're now taking negative delta options positions And that happens Just before 950. Let's go back to book map And this is right at 950 Lower high reversal at vwap Meta moves Lower good for about a 15-point move lower And again, I thought this was pretty pretty clear. I did post it in In discord All right now meta trying to recover that 490 level Back above vwap Let's go take a look at hero zoom out A lot of aggressive buyers coming in Right around 1030 That moves back down So more clear signal Starting around 1120 traders taking positive delta positions Meta now recovering So I thought this move lower in In meta Really kind of led Led the market lower in these uh morning short setups All right next tesla Zoom in on this Very clear divergent short traders were taking Negative delta options positions from the open Initially traders are buying buying the dip in tesla and then that reverses lower Just before 10 a.m As the pressure from these options trades Helps to move tesla lower. Let's take a look at book map Go to tesla All right quick move higher in the morning aggressive buyers Then options traders Start to have more influence on price As they were taking negative delta positions and tesla reverses lower All right, so wrb there you go. There's tesla Let's go take a look and see what options traders are doing now All right, so they started taking positive delta positions Around 11 a.m And then price responded higher About 30 minutes later All right, let's take a look one last look at another stock. I want to take a look at coin All right, so the spot gamma levels have definitely been in play on coin recently Here's the 227 50 hedge wall Acting as resistance more or less Price did not quite make it up to that level So first of all in the morning there was a long Note the flow where it comes in Just a couple of minutes after the cash open traders taking positive delta positions And they take their foot off the gas As coin reaches that Up to that 227 50 hedge wall They start taking negative delta positions And coin moves lower. Let's go take a look at book map go to coin Let's zoom in on this Quick move higher pull back Right to point and control right as the right at the opening print point of control Price moves higher finding resistance Right at 227 just below the 227 50 hedge wall And that is options traders taking their foot off the gas They start to take negative delta positions Price moves lower All right. Note this magenta line. This is the correlation tracker showing the correlation of coin with the Bitcoin futures All right, let's zoom out All right, so at note around 11 11 30 Coinbase starts to respond as bitcoin futures start to move higher Let's see what options traders are doing All right, so the hero signal is pretty flat After that move lower Looks like coinbase may be responding to that Move higher in bitcoin futures All right, does anyone have any stocks they want me to take a look at? Please let me know and I'll be glad to do that note cvd cumulative volume delta moving higher That's shown by the all the green volume dots A lot of magenta volume dots on the move down CVD Initially moves up flattens out Now moving higher again And katinga. Hello. Welcome Um, and you're welcome All right, anyone have any stocks they want me to take a look at All right, let's take a look at Let's go back to the uh index First of all the sp 500 Continues to move higher Check nasdaq so nasdaq ndx 250 absolute gamma strike call wall recovered and the qqq call wall is uh quite a uh Much higher at 450 and the qqq 420 level is in this cluster right here Let's take a look at heroes see what options traders are doing in the mag 7 So they continue to take positive delta positions Again, that's been going on all day With the exception of this Little bit of consolidation here traders continue to take positive delta positions Let's zoom out see if there are any recent alerts most recent alerts spy Sb 500 futures es check meta flow alert coming in Assume in on this All right, so the hero signal was shifting down Now looks like it's shifting higher again All right, does anyone have any stocks they want me to take a look at? Let me scan some Charts here on another screen See if I see anything All right, so it looks like Tesla now it's making Making a lower high. Let's see what options traders are doing Hero signal leveling off Let's take a look at Tesla Just to know when I'm trading I'm looking at multiple screens in the same time. Of course, I can only present on one screen So I have to keep jumping back and forth between Between book map and hero when I'm trading I'm using three main screens I have hero on one screen Book map on my main screen in the middle And then my trading platform on the right So I'm looking at all screens at the same time Putting together a plan for how I want to trade something trade Trade a stock or index future All right, so let's go back and take a look at hero for tesla looks like The hero signal may be turning up. Yeah, it is separate outputs and calls So try traders are buying puts That shown by the negative notional value on the blue line here. Sorry about that I'm gonna have to jump jump back Tesla All right, so right now both the orange line and the blue line are pretty flat So it looks like most recently call buyers were driving price higher shown by the rising orange line Now they've taken the foot off the gas tesla moving lower. Let's go back to Maybe a potential short tesla has broken this This trend line. Maybe I'd want to see more confirmation with hero Let's go back to the total signal I'm gonna have to jump back to tesla zoom in on it a bit All right, so this hero signal is making lower highs All right, let me see if I see anything else All right, looks like coin may be breaking lower as well. Let's check that all right, so remember We saw this before the hero signal was flat options traders not driving price higher Let's go to coin First of all, let's take a look at bitcoin futures. All right bitcoin futures still making Higher highs may be turning lower. Let's take a look at coin I'm on this just a bit So this is showing a slight drop lower in bitcoin futures So it looks like coin made it Queen made it up to 226 That's where this large Large buy orders executed Before the reversal lower Let's go back to hero Now zooming in on this it looks like the hero signal Is starting to rise again All right, so I'd be looking for a reaction Up around this level again All right, everyone my time is up I want to thank you very much for watching Everyone have a great afternoon remember tomorrow PMI data two-year node auction tesla reports earnings then on wednesday durable goods five-year node auction And then we'll talk about that and then meta reports after the market closes on wednesday All right, everyone have a great afternoon. Thank you very much for watching And I will see you on wednesday. Thanks. Bye