 Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern Time. Excuse me, before I go any further, I need to go through the disclosures. General disclosure, all Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk disclosure, treating futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. As a reminder, the focus of my presentation 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 and 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 look at real-time order flow in Bookmap and real-time market maker hedging flow in SpotGamma Hero to confirm my thesis and for setups, entries and exits. And questions and comments are welcome on topic questions and comments. Again, remember we're talking about options, order flow and the impact of options markets on stocks and futures. So again, questions, comments are welcome and I will be watching the options-doug chat channel and Discord and the chat on YouTube. All right, let's get started. So what I want to talk about today is all economic data, events and earnings for the rest of the week. And then there was quite a lengthy discussion in Discord over the weekend and one of the topics that I want to address is a Call Gamma Unwind and Put Vanna Rally exactly when to look for those, what they are and I talked about this last week pretty extensively with the Call Gamma Unwind. It was a pretty bullish week for certain stocks so that led to the Call Gamma Unwind on Friday and I'll go over that briefly again if you have any more questions or are interested in that I urge you to watch my webinar from Friday and that's in the bookmap channel on YouTube and it's in the archive section there. And then I'll talk about our positional analysis for today and then go over some setups. So first of all, the news today. Let's take a look at this economic calendar. So news for today. Coinbase reports earnings after the market closes and then tomorrow, the big event is the release of the FOMC minutes. Oops, wrong color there. Let me try that again. So the release of the FOMC minutes is the last meeting at 2 p.m. and that is a big event for Wednesday and for the week really and then also tomorrow NVIDIA reports earnings after the market closes. Then on Thursday at 8.30 a.m. eastern time economic data comes out the GDP again at 8.30 a.m. eastern time so after the market closes Moderna and Block report earnings and I believe those are both after the market closes on Thursday and then on Friday the PCE report comes out at 8.30 a.m. eastern time and then consumer sentiment at 10 a.m. So that's the rest of the week. Economic data earnings and events. Okay, so there was again some discussion about Putvana Rally, Call Gamma, Unwind and these are I guess really specific setups that I have observed over the I guess really the last couple of years. So first of all the Putvana Rally I primarily look for that in or I exclusively look for that in the indices primarily the S&P 500, SPX and SPY and let's think about what traders do with how they trade the index S&P 500 versus single stocks. So the S&P 500, SPY, SPX are really much more complex. There are a variety of traders and they're doing a variety of things. One of the primary uses of SPX especially for big portfolio managers, money managers is they will hedge their portfolio. They may have a portfolio with dozens or even several hundred stocks and they can't buy puts in each of those stocks. So they buy puts in SPX they beta weight their portfolio determine the amount of delta that they want to hedge and then they will buy calculate the number of SPX puts that they need to buy really buying longer term puts. So now they would most likely be buying March expiration puts that is the next big quarterly expiration and the put banner rally occurs in a couple of circumstances. First of all around big events like CPI report, FOMC announcement traders will want to hedge their portfolios going into that event and more often than not well almost always volatility is going to drop after the news there's no more unknown the news is known the CPI data is known and quite often recently has come in as expected or a little bit better than expected and the market rallies after that partially because of the build and put gamma, negative gamma so the way this works traders are buying puts traders money managers investors buying puts market makers sell the puts and they have to sell futures to hedge their delta exposure and then after the event again implied volatility typically drops price may increase those puts lose value market makers delta exposure decreases and they can buy back their short future hedges and that tends to help to fuel rally after big events and this also occurs at the major monthly expirations primarily the February was kind of a minor expiration but again we're looking at March as being the next big expiration and if gamma, put gamma in SPX and or SPI is quite negative you know SPI minus 1500 minus 2000 that could potentially lead to a put Vanna rally after expiration that was pretty typical of last year with the with the market moving down quite a bit so that's a put Vanna rally index only and I look at the S&P 500 I trade the S&P 500 or the call gamma unwind is something that I look for in single stocks and the way that works and I gave several examples last week for whatever reason traders are bullish on a stock they buy calls during the week and they're buying the calls that expire at the end of the week they're buying the weeklies and then as Friday approaches especially Friday afternoon those calls there's some a lot out of the money they quickly start to lose value as time passes and that's the charm effect they're changing delta as time passes and so traders have been buying calls market makers sell the calls and they have to buy stock to hedge their delta exposure as these calls start to lose value market makers no longer need their long stock edges and they can sell their stock edges and in a bullish environment or at least with bullish stocks where you know that there's a large amount of gamma expiring on Friday and then there's call gamma then that's a pretty reliable strategy so that's the difference in the two put Vanna Rally for the index index products and call gamma unwind for single stocks okay any questions about that alright let's take a look at our positional analysis and we'll go back to the S&P 500 and this is the this is book map this is the ES the S&P 500 futures and just a steady down trend today let's before we dig into that let's take a look at a larger time frame chart and this is SPX in a thinker swim chart just showing price and levels and these are the this is SPX this is the spot gamma levels for today shown in the red horizontal lines and this is the right now this is the put wall at 3,900 and the key gamma strike has moved back down to 4,000 so last week recall that the key gamma strike moved up briefly but now it's back down at 4,000 and then here's the call wall way up at 4,200 and the levels that are in play for today we'll take a look at in just a minute in a one minute chart and the thing to note here is the shift in ranges so there's this trend break here and then SPX traded in a pretty narrow range most of last week between 4,100 and 4,100 and 4,150 and then Friday broke down below that and traded for the day in a range between 40,50 and 4,100 and now it looks like that range is broken again down now to the 4,000 to 40,50 level trading in that range alright so that's the bigger picture and it appears that the again the trend is broken consolidation here in the 4,100 to 40,150 level and that is broken and now SPX is moving lower and so far finding support around the 4,000 level alright let's take a look at a shorter time frame and notice that here this is I'll talk about this chart in just a minute but this is the SPX 4,000 level this number is not quite correct it should be a little bit lower and I'll talk about that in a minute so let's now let's take a look at a shorter time frame chart this is SPX for today again showing SPX trading in a pretty steady downtrend from 40,50 at the open down toward the 4,000 level and the 4,000 level was noted as support and the spot gamma AM founders note alright so that is just price and levels now let's go back to book map and what I'm showing here I've got two columns of levels this is the spot gamma levels these are cloud notes that are provided by spot gamma to subscribers these are updated automatically every day and here showing key SPX levels and the reason I say this number is correct right now spot gamma incorrect is spot gamma is using a 10 point difference between SPX and SPI and the number is somewhat less than that I think around 7 points I just took a quick look so this level should be maybe around 3 points lower so it would show that that level really hasn't been touched yet so that is the spot gamma levels and then I have another column here these C levels and these are my cloud notes and I mark first of all the big round numbers in ES so that is 40, 50 and this I've got two things here the first is the white is the SPI 400 level that's the SPI 400 key gamma strike and that's also the put wall I'm sorry that is the put wall that's not the key gamma strike my mistake so that's the 400 SPI 400 put wall and the LEM that's the lower edge the expected move for the week so the ES has already hit the lower edge the expected move for the week and that's based on the options market so these are the levels that are in play again reversal lower around 450 just a few minutes after the open and steady downtrend down to the SPI 400 put wall and the SPX 4000 key gamma strike level alright let me check for questions so there's a question so being short puts makes the market maker in a positive gamma and no that's not correct when traders are long puts market makers are short puts that is a negative gamma environment and that means that as price drops market makers have to sell futures to hedge their delta exposure and that's typical of a negative gamma environment and that tends to increase volatility so again when when market makers are short puts there that's a negative gamma environment and then Sheena asked what do you get those levels and those levels are available for SPOT gamma subscribers so you need a SPOT gamma subscription and I showed think or swim charts with the SPOT gamma levels and that is available daily to SPOT gamma subscribers in a script you have to manually update that every day and then for SPOT gamma subscribers as well these cloud notes are available and those are updated automatically so again those are made available to SPOT gamma subscribers alright so those are the levels in play then let's talk about shifts in levels and for the SPX and SPY volatility triggers dropped for both SPX and SPY SPX dropped from 4095 last Friday to 4055 today and SPY volatility trigger dropped from 408 to 406 and the volatility trigger is SPOT gamma's proprietary gamma flip level and below that level that means that market makers are positioned in the negative portion of the gamma curve and again that just means what I just talked about they have to sell futures to hedge their delta exposure and both the SPX and SPY are trading below their volatility triggers and also for SPX the put wall dropped down from 4050 to 3900 and then the key gamma strike as I mentioned before dropped down from 4100 to 4000 so for SPX back down to familiar levels and then for QQQ the put wall dropped from 300 to 290 alright let's take a look at the S&P 500 gamma charts now and see where those levels come from so this is excuse me this is the SPX the absolute gamma levels and this is the zero level so above this horizontal line that's positive gamma shown by the black bars and below that line and that's called gamma below that line that's negative gamma or put gamma shown by the two bars so it's pretty clear that the 4000 strike is the key gamma strike that's the strike with the largest absolute gamma 3900 is the put wall and that's the strike with the largest net negative gamma and that can be expected to act as support and then here's the call wall at 4200 that's the strike with the largest net positive gamma expected to act as resistance and that is pretty far away that's pretty far out of play right now and it looks like the range from probably 3900 to potentially 4100 is in play so that is the SPX gamma absolute gamma levels let's take a look at SPI I'm going to zoom in on this alright so for SPI 410 is the key gamma strike the strike with the largest absolute gamma there's 400 that's the put wall and that's pretty obvious the strike with the largest net net negative gamma and then the call wall is up at 4200 so it looks like we can see that the gamma has started to shift down and then there's potentially somewhat of a tone change in the market here with gamma shifting down really for right now concentrated in the 400 to 415 level so we'll keep an eye on that this week and see if gamma shifts to more negative and that shifts down alright let's take a look so that's the SPX and SPI let's take a look at the NASDAQ this is absolute gamma levels and we'll look at QQQ so for QQQ 300 is the key gamma strike 290 is the put wall again remember that shifted down from 300 on Friday and then 310 is the call wall so call gamma concentrated above the 300 level and then put gamma concentrated below alright so overall to me this looks like a starting to be potentially a shift from a lot of call gamma above to put gamma below so a build in input gamma and in YouTube she and I asked the red levels on the charts are from spot gamma yes so spot gamma provides their levels to subscribers for a variety of platforms and I use book map and thinkorswim and they provide levels for both of those platforms with book map being updated automatically and thinkorswim requires some work every day to get those levels on the charts just basically copying the script and pasting it in replacing that your older script with a new script for the day alright so those are the gamma charts let's take a look at the data now and there's a question in discord I'll get to that in just a minute let's take a look at the data see this is gamma notional this is market makers position on the gamma curve SPX is shown in the left column SPY is shown in the middle column and QQQ on the right and again this is market makers position on the gamma curve it's negative for all three instruments and shifted actually slightly positive today from Friday and I compare morning to morning so SPX on Friday was minus 254 and today it's minus 82 and remember Friday was expiration so there are going to be some shifts and levels and traders will start to build up march positions now so SPX shifted from minus 254 to minus 82 SPY shifted from minus 1487 to minus 1304 and QQQ shifted from minus 3 actually shifted more negative so SPX and SPY shifted to a little bit less negative and then QQQ shifted more negative from minus 345 to minus 377 so in all three cases the market makers position on the gamma curve is negative again meaning that traders along puts market makers are short puts and they have to sell futures as price decreases to hedge their delta exposure and if price increases they can buy back their short futures so they're trading with price in this negative gamma environment let's take a look at the VANA charts now on these charts illustrate graphically what I was just talking about so this is SPX and this chart is showing how market makers delta notional shifts with changes in price so they're delta notional shown on the vertical axis the strike price is shown on the horizontal axis and the green curve shows how their delta notional changes with changes in price and implied volatility and that's the VANA effect the change in delta with a change in implied volatility and so this is showing exactly what I was just talking about as price decreases market makers delta notional increases and they have to sell futures to hedge their delta exposure so that's SPX and there was just this is just showing the slight shift from Friday here's spy same thing negative gamma slight shift from Friday and QQQ to slightly more negative okay so I'm doing all this this is my positional analysis my planning and preparation for the morning and the last thing that I want to look at so I focused on primarily on the indices here the S&P 500 and a little bit of the QQQ and one thing that I keep track of every day is the key gamma strike for all the stocks on my watch list and I compare the current key gamma strike that's the key gamma strike for today with the key gamma strike from the previous day and that's shown in the right column and then the current key gamma strike is shown in the D column there and note that on Friday all the shifts lower in the key gamma strike and that was a good alignment with the call gamma unwind thesis for the day so that was an added confluence or an indication to look for short and then that has continued today with more the only stock with a rising key gamma strike was Disney for all others for the others shown here in red the key gamma strike dropped so given all that the drops in the key gamma strikes in the stocks here as well as the shift lower in the volatility triggers for SPX and spy and then the shift lower in the put wall for SPX and the key gamma strike for SPX and what appears to be a shift lower in put gamma as well as just looking at the SPX chart and seeing those levels broken my thesis for the day was bearish okay so there's a question in discord one of the consequences exactly when next expiration gamma is 83% high on a stock in equity hub so first of all I ask you to tell me which stock you're looking at and we can take a look at that stock so I talked about this on on Friday so I look at several things first of all I sort my watch list by the next expiration gamma percent do you mean Tesla or TS LS is that a typo or is that a stock I'm not familiar with that stock we'll take a look at it in just a moment so I sort my watch list by next gamma then I'll go through an equity hub oh that's inverse Tesla okay so that'll be interesting we'll take a look at that in just a moment so I sort my watch list let's just go ahead and take a look at equity hub and now this is not really going to apply on Monday we'll do this on Friday in a bullish week so far it appears that this may not be a set up that we want to look at for this week if the market continues down like it is today so anyway I sort my watch list by the this next expiry gamma percent then I I look for here snowflake so Friday the Friday expiration is 224 so I would look for larger than 30 percent here expiring this week and then I would come down here and I would look for look for some green in this region here I want to see some some indication of of call dominance in part of this chart so we can look at so the call dominance really doesn't start until above 200 so you know it's too soon to tell but that's that's my process that's what I look for so let's go to the stock the TS LS I would not touch the stock with options at least I would not base any any strategy on options on this stock for a couple reasons first of all primary reason is there doesn't appear to me much options activity so I'm looking at the very light shade of pink in this curve and this is indicating that there's not just not much options activity here's the position size shown in this right column let me redraw that alright so that's the first thing I'm looking at a very light shade of pink not much options activity and then also I'm looking at this line right here this outline excuse me just a minute okay so I'm looking at this line right here and it's just very light showing very low recent activity so I wouldn't make anything of this stock alright let's move on now and let's take a look at some setups alright so the first thing actually let me I don't know why chrome is resetting so this is my watch list let's take a look at something that's pretty interesting today is the divergence in the hero signal between SPX and SPY notice what I'm looking at right here the notice this very weak hero signal for SPX and the very strong hero signal for SPY kind of an unusual divergence here and so let's take a look at SPY now and notice that for most of the day the divergence and hero showing traders were taking positive delta positions and price continues lower and then SPX much more of a confluence with options trades and price action order flow I'm going to zoom in on this and what I can do first of all is stick with the total and look at next expiry I don't know why that's chopped off there so what I saw this morning we'll take a look at this is the next expiry puts and calls this may be a little bit confusing but in the morning especially what I noticed was this light blue line especially this is the zero DTE options for the driving order flow let's clean this up a bit get rid of the zero DTE so that's SPX overall hero there's some bumps here but hero trending lower SPX options trades driving price action alright let's take a look so let's go back to book map now and there's order flow confirming the hedging flow and SPX again what seems to be driving today and just the steady downtrend now and prices broken both the spy 400 foot wall level and the SPX 4000 level it looks like at least for a while today some big traders were fading the move this is shown by this light blue line large traders were in there buying with their iceberg orders they used those to hide their size and you can see the large iceberg orders down until this line levels off and meanwhile this yellow line showing stop orders has been bearish all day that's showing sell stop orders and I have found that that is usually a good price confirmation price usually moves in the direction of the stop orders so price action order flow is confirming at least as far as the stops and the trend CVD confirming what the options market for SPX is showing alright let's take a look at a few stocks now few set up so this is the S&P 500 let's just go back to hero now and again sometimes you just have to investigate here look at SPX and spy and let's see if we can we'll search for the SPX plus spy that's the combined signal and at least starting around 1pm is showing a stronger confluence with hedging flow and price action but I think the key for today for S&P 500 traders was to look at this SPX and then again I think primarily to watch what the zero DTE traders were doing and that's shown by this green or teal line alright let's take a look at some stocks now and I'm going to take a look at let's take a look at Microsoft first and in the morning there was a very strong confluence between price action and hedging flow an interesting move right here at just before 945 let's just see what traders were doing so they came in and they were pretty aggressively buying calls that's shown by the rising orange line and then selling puts and then that quickly reversed they started selling calls and price reversed lower let's go take a look at book map we'll take a look at Microsoft and I'm going to zoom in so we can see this more closely and here's that reversal this is showing at around 255 so we know that traders were buying calls pretty aggressively driving this price up to the 255 put wall that's the 255 put wall hedge wall and see these small green dots or red dots I'm sorry red dots that is a sell sweep so those buyers were met with aggressive sellers price reversed lower and did a retest of the 255 level and then has been gradually moving lower and it looked like the look like this 250 key gamma strike that's the key 250 key gamma strike and key delta strike was a target was in play and may still be but it looks like price has reversed 252 level let's go back and take a look at hero and see what traders are doing so traders started taking positive delta positions around 1145 something like that got the wrong tool there let's get the arrow traders started taking positive delta positions and then price started moving higher about a half an hour later so a little bit of a divergence short set up in the morning and then a slight divergence long set up so that's Microsoft let's take a look at NVIDIA now and remember NVIDIA has been market leadership and is moving lower today there's a strong confirmation with price action and options trades hedging flow and traders are selling calls and buying puts let's take a look at book map and the the dip buyers were in early in the morning and that didn't last long notice all the aggressive sellers coming in here as price jump sharply and that's by the pink dots there and then price reversed very quickly to 210 and now continues lower let's just see what what sort of target is down below and there's the 205 hedge wall and that may very well be in play today alright so there's one of the market leaders definitely in a downtrend today moving lower and let's take a look at QQQ and here this is showing a buy sweep up toward the 299 level and then note the shift from green dots and that final buy sweep to pink dots right here and price moves lower let's take a look at hero see what options traders were doing so clear confirmation with with Nvidia and pretty much the same for QQQ and this is clearly showing that traders were buying puts and there's a slight slight divergence traders started buying puts and just maybe about five minutes later the price starts to respond lower let's go back and take a look at book map so traders continued to buy calls but it looks like again puts are driving let's go back and take a look at book map so we know that around 940 traders started buying puts stopped selling puts and started buying puts and book map we can see that final sweep buy sweep around 945 and then again the aggressive sellers come in as traders were buying puts let's take a look at tesla and notice the very very bearish order flow all the pink dots so a pretty similar pattern to some other stocks that we've looked at this quick jump up aggressive sellers come in right here at around 209 and the whole time cumulative volume delta just from a few minutes after the open has been bearish and very few green dots in there, volume dots showing aggressive sellers market sell orders first target was the 200 key gamma strike shown here and the liquidity at that level price bounced off that level and now has broken through that level so there's your other one of your other key market leaders tesla and a downtrend as well today alright I've got a few minutes left let me check for questions so Persian lion says 399 was in V P O C some sort of point of control I will tell you Persian lion in this channel we don't look at that stuff that is other than the you know the session volume profile here today I don't look at that that's arbitrary and I look at gamma levels liquidity and round number levels which are often all the same levels so again if you want to focus on that something that you want to take to another channel so here we're focused on a new way of looking at markets that's based on options and positional analysis and the key gamma levels and liquidity in book map so let's go back we have left and there were a few other stocks that we can take a look at first of all let's go to Amazon another steady downtrend more chop in the open let's go take a look at hero and pretty strong confirmation between hedging flow and price action and pretty choppy action in hero but definitely negative delta bearish overall let's go back and take a look at book map I'd say pretty bearish order flow all together notice the cell sweep here the small bright red dots price makes a series of lower highs and test the key delta strike and is continuing lower not a lot of range in Amazon today definitely better trades in the S&P 500 NVIDIA Tesla, Microsoft some of the higher price stocks higher beta stocks and let's go take a look at let's go back and take a look at hero now so some other stocks that I saw this morning Coinbase and showing a pretty typical strong correlation between options trades hedging flow and price action and Coinbase and again remember Coinbase reports that there are some bad things after the close let's see how traders are positioning themselves so they are buying puts that's shown by the following blue line so that's Coinbase IWM and this morning there was a strong correlation after this jump up between hedging flow and price action Moderna hedging flow and price action and remember Moderna reports earnings on Thursday and that was all I have let's go back and check the S&P 500 again now it looks like hedging flow for spy has shifted positive again let's zoom in on this so traders continue to buy calls let's take a let's take a look at a shorter look back period 30 minutes so looking at just the last 30 minutes of hedging flow this is showing that traders are starting to sell puts at least temporarily and buy calls we'll take a look at SPX also and then we'll end up by looking at book map look at ES one last time so overall for SPX the hedging flow continues to be bearish negative delta let's end up by looking at wrap up by looking at ES and book map still continues to be in a downtrend as Bruce says no reason to you know zoom otherwise until it does you do see a shift so still still in a downtrend nothing has really changed let's see what's down below and it should be pretty clear sailing no levels down below until the put wall at 3900 at least on here we can take a quick look at the gamma levels again S&P 500 so there's some gamma put gamma but not a lot so here's what's down below 3950 and 3900 okay any final questions alright I'm gonna wrap it up that's all I have for today and I want to thank you for your questions and comments and thanks for watching and I will see you tomorrow thanks again