 Hello everyone welcome to options with Doug streaming live daily on book map discord and the book map YouTube channel at 1 30 p.m. eastern time before I get started I need to go through the disclosures general disclosure I'll book map them in materials information and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations risk disclosure trading futures equities and options involves substantial risk of loss and is not suitable for all investors past performance is not necessarily indicative of future results here's my contact information and hold on just a second I mean adjusting the quality on my stream on YouTube so just a reminder for those of you on YouTube I am streaming at 1080p and my screen had picked a lower resolution so I just went into the settings and changed it to 1080p so again I'm streaming at 1080p on on YouTube if you have any problems with screen resolution alright here's my contact of information excuse me the best way to get in touch with me is through discord my name on discord is Doug P also in book map discord there's an options-doug chat channel that's a great place to post questions comments and content related to the topics of this channel as well as the as well as the my presentation today so again book map discord options-doug chat channel and by the way book map discord is free and available to everyone whether you are a book map subscriber or not and there's a lot of great content there of course including my channel I'm also on X formerly known as Twitter my name there is at Doug plus the focus of my presentation today and the focus of the options-doug chat channel is options order flow the impact of options markets on stocks and futures and the influence of market maker hedging flow on price action have a two-step process for trading and the first is planning and I use positional analysis I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as the directional bias 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 for entries and exits and when I talk about setups today I will be talking about an underlying asset and setups can be taken any number of ways for example the S&P 500 can be taken setups can be taken with ES futures spy shares spy options SPX options or even ES options questions and comments are welcome and I will be watching both the options-doug chat channel and discord as well as the chat and YouTube for your questions and comments please feel free to post and I will do my best to answer your questions here's my agenda for today Thursday November 9th first of all I'm going to talk about news items economic data events and earnings for today as well as the rest of the week then I'll go through my positional analysis then I'll review some setups from earlier today and then we'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 will be glad to do that all right let's start with news items so today there were actually a couple of events first of all and actually this event is upcoming a drone pal speaking at 2 p.m. so we'll be on the on the lookout for that and then there was also a another bond auction today a 30-year bond auction and unlike yesterday there was quite a reaction to that 30-year bond action that was at 1 p.m. all right so that's today again drone pal speaking in about 25 minutes so we'll be on the lookout for that when he spoke yesterday that was pretty much a non-event as well as the bond action yesterday so maybe drone pal speaking today we'll have more impact on the market like the bond auction did right then tomorrow michigan consumer sentiment comes out at 10 a.m. so pretty light week a lot of Fed speakers and then minor economic data next week just a preview CPI data is out and also next Friday is the November options expiration all right so that's the news now let's get started with positional analysis I'm going to start with the SB 500 this is the ES futures in book ma'am and before I take a closer look at this chart I want to take a look at a larger time frame I'm going to go to the SPX this is a 30-day 1-hour chart let me point out the key turning points in this chart first so this is the October 6th that's a September jobs report first Friday of the month gamma squeeze led to a pre-sharp move higher and the SPX found resistance right around 4390 it looks like the high was 4393 so right around this level right where SPX has been trading now SPX been began to move lower rising yields geopolitical concerns this was the October monthly options expiration very put dominated negative gamma the expectation was for a put Vanna rally that really only lasted a couple of days and the downtrend continued then this was Monday October 30th traders had loaded up on puts over the weekend a concerned about weekend risk and then that Vic started to drop sharply on Monday leading to a huge put Vanna rally and during this time market makers gamma notional began as very negative and has recently shifted to positive so gamma notional for SPX has been positive since since last Friday November 3rd all right so that's that's up to date with the key turning points for the SPX now let's take a look at some levels first of all the dash purple lines are showing the lower and upper weekly expected move that's based on the options market that changes once a week then the dash blue lines are showing the lower and upper daily expected move that changes every day again based on the options market and it looks like the lower daily expected move was tested earlier today all right those are the expected moves let's take a look at the spot gamma levels now these are proprietary spot gamma levels available to spot gamma subscribers I'm going to point out the key daily levels first of all the put wall at 4,000 that's a strike with large net negative gamma that can be expected to act as support and that is well out of play the next level up is the volatility trigger at 4370 that a spot gammas proprietary gamma flip level or really it's a volatility trip 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 and that tends to subdue volatile increase or enhance volatility on the other hand like SPX has been trading now above that level market makers position on the gamma curve is net as positive in a positive gamma environment market makers have to trade against price to hedge their delta exposure and that tends to subdue or decrease volatility so right now SPX trading looks like just around that level let me check just a moment so SPX actually trading slightly below the volatility trigger and it did act as support earlier today we'll see that in one of the setups that I want to talk about all right so that is that's the volatility trigger that level did move higher from yesterday and that is slightly bullish all right the next level up is 4400 and that is first of all the absolute gamma strike that's a strike with the largest absolute positive and negative gamma that is where most of the gamma weighted open interest is concentrated and that's important to know in a positive gamma environment that can lead to pinning around that level in a positive gamma environment as market makers are trading against price and that's also the the call wall the strike with the largest net positive gamma that can be expected to act as resistance so 4400 that is a very important level all right let's take a look at a shorter time frame let's take a look at a one day one minute chart so this is SPX one day one minute SPX now trading below its volatility trigger note that it more or less acted as support earlier today support again and now SPX trading below its volatility trigger so that's another important level for SPX all right let's go to book map now so again this is ES futures and book map and I like to mark spy and SPX levels on my ES chart that's how I look at at price for the SAP 500 futures in terms of again spy and SPX levels so I have my own cloud notes so I can show spy levels SPX levels so this these are the volatility triggers just above that there are two white lines there the white line above is the SPX 4370 volatility trigger and just below that is the spy volatility trigger at 436 and note this was an important support level earlier today so again I have spy and SPX levels on this chart the spy 438 level acted as resistance earlier today it's just a round number that's not a spot gamma level but that's where traders often place their trades so really the the trade today so far up until this bond auction has been between spy 436 and spy 438 and this is we'll take a look at setups in a few minutes and this is pretty typical of a positive gamma environment mean reverting traders buying dips and selling reps pretty reliable and a positive gamma environment and that could be could have been upset by this 30-year bond auction and again drone Powell speaking in about 15 minutes alright so those are levels in play for the SAP 500 let's just take a look down below here alright so the next level down is the is this 4360 support level and just below that the spy 435 absolute gamma strike then below that is the lower daily expected move I'm just going to darken up the heat map a little bit to show the resting orders in the liquid resting liquidity resting orders in the current order book and notice there are some buyers here first at the 4360 level and then also buyers down below just below the lower daily expected move so we're not the only ones that know about these levels and again we'll talk about setups in a few minutes alright so that's the SAP 500 levels in play for today let's take a look at NASDAQ oh and again just shifts and levels spy the volatility trigger also shifted higher just slightly from 435 to 436 and again that very important level today the two volatility triggers just right on top of each other alright let's take a look at NASDAQ now so this is in Q futures in book ma'am another choppy range day today in NASDAQ again typical of a positive gamma environment alright let's take a look first of all QQQ levels and I'm going to go to a QQQ chart so we can isolate those levels so a lot of focus around this 373 level that is a QQQ gamma level as well as a combo level combining QQQ and NDX open gamma weighted open interest into one combined level in this case in terms of a QQQ price and then here's the QQQ volatility trigger at 372 alright so that's QQQ levels in play for today pretty sharp reaction down right at the 374 level after that 30 year bond auction or let's take a look at NDX just for completeness and there's that combo level price is oscillated above and below that level alright let's go back to NQNL so for some reason that combo level is not shown on this chart it wasn't in the list of levels but again it was right around the 373 level and know that is looking at the session volume profile for the entire session that's where the volume it's concentrated that's also a point of control just below that level shown with the dark solid purple line alright the levels in play for today in addition to the QQQ levels and the combo level also the NQ15450 level NQ traded above its upper weekly expected move briefly and then move lower alright again we'll talk about setups in a few minutes alright shifts and levels for the NASDAQ NDX the volatility trigger shifted higher and for QQQ the volatility trigger shifted lower and for QQQ the absolute gamma strike also shifted higher shifted higher so kind of a mixed picture as far as shifts and levels go not really meaningful in either either direction not enough to develop a directional bias alright let's take a look at gamma notional now to see how market makers were positioned on the gamma curve at the beginning of the day this is important to understand how market makers may react to changes in price and applied volatility and note for SPX as I mentioned before remains in a positive gamma environment this means for SPX that traders are short calls market makers long calls and when they're long calls they have to trade against price to hedge their dealt exposure so as price rising is rising those calls are increasing in value they want to remain delta neutral so they have to sell futures to hedge their dealt exposure and spy gamma notional remains slightly negative spy gamma notional rarely goes to positive doesn't stay there very long and also QQQ gamma notional is positive as well alright so for the SMB 500 gamma notional did shift lower so for SPX gamma notional became slightly less positive and became more negative for spy and then QQQ actually shifted a little bit higher so QQQ was the only index product where gamma notional shifted higher all the other SPX spy oops gamma notional shifted lower for SPX spy NDX RUT and IWM all right let's take a look at the Vana model then I'll get a graphical representation to see what that may mean I'm gonna start with SPX this chart is showing delta notional on the vertical axis price on the horizontal axis there are two curves on this chart the first the light gray curve shows how market makers delta notional may change with price only the purple curve adds implied volatility to the equation that shows how market makers delta notional may change with changes in price and implied volatility and that change in delta with a change in implied volatility is the Vana effect all right let's take a look at some prices now let's see where SPX is trading right around 43.64 so it has moved down quite a bit now on this negative gamma portion of the curve earlier today SPX was trading higher let's check prices let's go back to our SPX chart so the high today was 43.93 right so that's right right around the bottom of the curve indicating if price increases market makers delta notional will increase and they'll have to start selling futures and by the way I'm looking at the purple curve that's the one that we want to take a look at then on the other hand like what's happening now price dropping implied volatility increasing market makers delta notional is increasing they want to remain delta neutral so they have to sell futures to hedge their delta exposure so any any tailwind from put Vana is gone in this positive gamma environment and there's a tailwind a headwind market makers trading against price in either direction as price moves when SPX starts at the bottom of this curve excuse me all right let's take a look at spy spy trading around 435 also back on this portion of the gamma curve that's sloping up to the left let's take a look at QQQ QQQ trading around 372 right here all right let's take a look at some setups now so my thesis for today was looking for lower volatility range day mean reverting again traders buying dips selling rips that's typical of a positive gamma environment and that doesn't account for any news or events during the day which could which could change that dynamic right so let's take a look and see what options traders have been doing today I'm gonna start with the SME 500 this is the hero signal hedging impact real-time options this is available from spot gamma to spot gamma subscribers very valuable signal what this chart is showing is price for SPX with a white line the hero signal with purple line and that hero signal is showing options trades and market maker hedging activity for a combined signal of SPX spy XSP and ES futures all into one combined signal so when I'm trading the SME 500 this is typically the signal that I look at and note there's a very very strong correlation today between options trades and market maker hedging activity and price action I'm gonna zoom in on this chart gonna focus on the morning a little bit note the mean reverting price action here this was a short in the morning I pointed that that out at the spy 438 level and then price reversed higher at the 4370 436 volatility triggers so there's your mean reverting range day from spy 438 to 436 and then back again and led by options traders all right let's take a look at book map gonna go back to the SP 500 zoom in just a moment here all right so one of the keys for me is knowing the levels where price might reverse so again the first right around 10 a.m. traders started taking negative delta positions options traders so let's look at book map look at the clues first of all we have that level there a potential reversal level the heat map is showing limit sell orders just above and below that level the volume dots are showing market buy minus sell green dots indicate more buyers than sellers magenta dots indicate more sellers than buyers note the final green dot there buyers are exhausted aggressive sellers start to come in and price drops down to the almost to these levels 436 437 volatility trigger levels note all the aggressive sellers on the way down large magenta volume dots more sellers than buyers a little bit of reversal at the 4370 level 74 level that was noted as support in the spot game I am founders note and then price moves on down to the volatility triggers note this move down was fueled by sell stop orders shown by the following yellow line also these small red dots sell stop orders also note the following dark blue to pink line that's Kim let the volume delta so there's a short set up then some liquidity and the order book just around the volatility triggers price breaks above this little trend line makes a higher low at the support level as aggressive buyers start to come in showing by the rising cumulative volume delta and we saw in hero that options traders were buying the dip let's just go back to hero see if I can show this without an auto zoom do that quickly puts and calls so this adds some additional insight right around 1040 traders start buying calls that shown by the rising orange line they stop buying puts start selling puts so both these lines moving in the same direction moving up and that's a powerful signal it's hard for a product an index whatever to to go against that when both the traders are in this case buying calls and selling puts market makers take the opposite side of that and they have to buy futures to hedge their delta exposure so that's a very powerful signal in the in the in hero all right sorry about that that auto zoom my understanding is that spot gamma is working on it that's a that's a bug they're working on all right let's take a look at NASDAQ now first of all I'm going to take a look at the signal for at NASDAQ not as clear as the S&P 500 notice traders were taking options traders taking negative delta positions from the open shown by the falling purple line that led to a good short setup right around 10 o'clock same time as yes be 500 let's go to go back to book map take a look at NQ all right so the move lower continues oh and drone Powell is speaking now all right so the move lower continues down to the lower daily expected move let's see if I can find any insight about what what he's saying all right so so far I have one note here Powell says greater share progress on inflation ahead may have to come from tight monetary policy not just supply side improvement so whatever he's saying the the market so far does not does not seem to like it all right so it's good to see some two-way price action here all right so that let's go to NASDAQ now we're gonna look for the short setup this morning at 10 a.m. so there it is at at 374 aggressive buyers on the way up shown by the green volume dots and aggressive sellers come in not quite as an easier read as the SMB 500 let's go back to hero one other signal that we can take a look at for for NASDAQ is this let me get back out of this is the this is a new indicator hero indicator this is for it's a combined signal for the magnificent seven stocks known as the magnificent seven Apple Amazon Google Meta Microsoft Nvidia Tesla and then here's this reversal right around noon no traders taking positive Delta positions up until around noon they took their foot off the gas excuse me they take the foot off the gas and turn that around start taking negative Delta positions then as a group start moving lower all right let's go back to NASDAQ now and take a look so right around noon we know that that group of stocks that makes up a such a large portion of the NASDAQ 100 traders started taking negative Delta positions and right around that time in queue trading above its upper weekly expected move options traders start taking negative Delta positions and aggressive sellers start to come in shown by the magenta volume dots price moves lower 30 year bond auction sharp move lower quick reversal up to VWAP also the 373 level that's been so important today and price reverses lower and continues lower alright let's take a look at some stocks and I'm gonna go back to hero so one stock I want to highlight today is Roku and there were a lot of stocks that have been been testing their call walls and I had an alert set up for several days looking for this in Roku a stock that has the stock jumped up right after earnings and I was looking for a short and just waiting waiting patiently for a retest of the 85 call wall and then when I got that alert today I put it in my trading platform that was good for a short set up that can be taken any number of ways now I don't have I don't have this in book map on on this computer I have it on book map on another computer but anyway here's a test of the 85 call wall flow a couple of flow alerts before right at the test and then after the test and of course there was a call wall breach alert as well and then I also had the trading alert set on my trading platform so that can be taken any number of ways buy a put buy a put spread sell a call spread or just short shares of stock all right so that was for me more of a swing trade looking for some mean reversion for Roku but also a good day trade as well all right so that was that was Roku let's take a look at NVIDIA note NVIDIA trading above its call wall and could lead to a good potential call gamma unwind trade tomorrow so that is when traders are buying calls they're typically buying calls especially for stock like NVIDIA they're buying calls that expire at the end of the week that would be tomorrow and as those calls start to lose value due to charm that's a change in Delta with a change in time as time passes market makers so when traders buy calls market makers sell the calls they have to buy stocked edge their delta exposure and when those calls start to lose value market makers can sell their long stock edges again they will always want to remain Delta neutral so anyway it there was a great good long set up this morning and NVIDIA note the floor alerts trainers taking positive Delta positions and as usual that activity stops this time right right before noon they take their foot off the gas and then price starts to move lower very very typical price pattern a bullish price pattern all right let's go take a look at book map let's go to NVIDIA so I think there was good news for NVIDIA today something about selling looks like I need to update my price lines selling chips to China led to a bullish bullish day so far or earlier today up until noon price finally stopping at 482 right around noon as options traders took their foot off the gas right so that's NVIDIA now let's take a look at another story so a tale of two stocks again here is Tesla and I there must have been bad news about Tesla today Tesla at the open opens at the 220 key gamma strike and has been moving lower ever since then high liquidity targets at the zeros and the fives those are limit buy orders that come in typically at the 930 cash open and they stay in the market stay in the order book until they're filled so buyers at 215 210 and also the round number levels in between and these levels of liquidity act as magnets for price let's see what options traders have been doing let's go to Tesla right different story in Tesla hero trending down all day traders taking negative delta positions market makes take the other side and they have to sell futures to hedge their delta exposure or sell stock to hedge their delta exposure true so let's say traders are so they're buying puts and selling calls market makers take the other side that's positive delta so they have to sell stock to hedge their delta exposure here's the 220 key gamma strike Tesla open to that level now testing the 210 put wall sorry about that so that line may be difficult to see that kind of a brown orange brown line let's go back to book map so there's the 210 put wall now acting as resistance alright there's one other stock I wanted to take a look at today Microsoft good long set up in the morning let's go to hero Microsoft here's the long set up right around 1030 traders start taking positive delta positions price moves higher toward the 365 call wall never makes it there they take their foot off the gas again right around just before noon and price moves lower Microsoft has just been on a crazy tier higher so they were buying calls that's shown with a rising orange line here this is what was driving price higher and reverse lower just below the call wall note the abrupt change in the call buying again a very very typical pattern and then they started buying puts and price moves lower and so far both the orange line and the blue line are shifting lower already any questions anybody have any stocks they want me to take a look at alright so in my watch list here I have mostly large cap tech stocks magnificent seven plus a few others so let's I just want to scan through as I mentioned before there were a lot of call walls being tested earlier so for Apple call wall up above at 185 AMD at 115 it breached its call wall earlier today now moving lower Amazon call wall not in play key gamma strike down below looks like IWM moving down towards its put wall at 167 Netflix reversed at its call wall 440 let's go take a look at book map take a look at Netflix so the call wall Netflix 440 call wall acted as resistance twice today and note all the liquidity at that level that's where traders wanted to get short those arresting sell orders limit sell orders in the in the order book shown by the dark red dark orange dark red band at 440 let's go back to hero so I think that really covers all the stocks in my watch list all right let's go take a look let's go back to the SP 500 all right the move continues lower let's just check Vic see what the see what VIX is doing it's been actually we'll take a look at the 10 year 10 year rising pretty sharp move higher from 4.5 up to 4.64 definitely a headwind for stocks let's change let's take a look at VIX sharp rise higher in VIX excuse me really breaking this downtrend that has been in place this is a 10 day chart 10 day 5 minute sharp break of that downtrend and VIX headwind for equities zoom in on this chart one thing I want to take a look at this is the SB 500 combined signal take a look at zero DTE traders just like yesterday they're a little bit more bullish than than the longer-term traders so what this is showing I've got two lines on the chart the purple line is showing the hero signal for all expirations and then the green line or the teal line is showing options trades for next expiry and for the SB 500 that would be options that expire today so both are negative and it looks like the zero DTE traders are taking that notional value is a little bit over a third of the total notional value trading today both negative and traders are buying puts and selling calls I'm sorry they're buying calls and buying puts that show them by the positive notional value for the call line and then that's the the call line positive notional value they're buying calls they're also buying puts shown by the negative notional value and also the falling blue line it looks like of course put buyers more aggressive today and helping to dry price lower let's go back to book map take a look at the SB 500 SB 500 trading now right around its lower daily expected move haven't seen that in a while also finding support at the 4350 level that is SPX 4350 and spy 434 so far today let's see if I can find any other comments by drone pal oops all right so it looks like drone pal has left the stage at the IMF event after arrival of climate pro protesters so it looks like he has stopped speaking all right so before that drone pal said if it comes appropriate to tighten policy further we will not hesitate all right so that is the you know they're they're still data dependent all right so now the SB 500 trying to recover at the 4350 level let's check Nasdaq so far the order flows still looks looks pretty bearish to me looking at the sub chart all lines of the sub chart moving lower light blue line showing large traders selling with iceberg orders sell stop orders feeling the move lower also aggressive sellers now that CVD line has leveled off looks like there are some aggressive buyers coming in let's see what options traders are doing go to Nasdaq so for Nasdaq the hero signal has leveled off hero leveled off let's see what the Magnificent 7 are doing all right too soon to tell all right any questions today I haven't seen a single question if you have questions or a stock you want me to take a look at please let me know and I'll try and answer your question or take a look at the stock you want to take a look at all right let's go back to book map all right so the Reflection Studios wants to take a look at Tesla all right so we can go back to Tesla all right so Tesla may be finding support around the put wall let's go to book map go to Tesla remember 210 is the put wall there were some buyers that level price moved through then that put wall acted as resistance twice actually three times acted as resistance let's go back to hero all right so really what you would want to see for for Tesla or any stock in this situation is for call buyers to step in and start buying so they stop buying puts maybe start selling puts so really for Tesla to move higher you would want to see one or both of these lines starting to increase starting to move higher all right so the dip buyers are definitely coming into the S&P 500 sharp rise higher in in hero for the S&P 500 let's take a look at NASDAQ not so much in NASDAQ let me just take a look at one other thing take a look at the heat map for the S&P 500 note the two stocks that I talked about bullish day for Nvidia Tesla looks like the weakest stock on the board also Disney rising met a slightly higher Broadcom everything else moving lower so just a handful of stocks up everything else moving lower led by Tesla to the downside and looks like Disney to the upside let's go back to book map all right so Tesla still struggling struggling to make it back above its put wall right so the S&P 500 we know that options traders are taking positive Delta positions few large traders in here buying with iceberg orders price moved down quickly met by other traders selling with iceberg orders now the S&P 500 trying to make it above this 435 4360 level after finding support at 434 40 4350 all right my time is up I want to thank everyone for watching interesting today day today great to see a little bit of two-way trade a downward move all right tomorrow remember Michigan consumer sentiment at 10 a.m. and everyone have a great evening and thanks for watching and I will see you tomorrow thanks again bye