 Hello everyone welcome to options with Doug streaming live daily on Bookmap discord and the bookmap YouTube channel at 1 30 p.m. Eastern time Before I get started. I need to go through the disclosures general disclosure all book map limited materials Information and presentations are for educational purposes only and should not be considered specific Investment advice nor recommendations risk disclosure Creating futures equities and options involves substantial risk of loss and is not suitable for all investors Past performance is not necessarily indicative of future results The focus of my presentation 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 changed from day to day to develop a thesis regarding the expected trading range and volatility for the day and the second step of my process is Execution and I look at real-time order flow in bookmap and real-time market maker hedging flow in spot-gamma hero To confirm my thesis and also for setups and our directional bias So just to be clear I'm looking at the options market as the basis for my planning and preparation And I will talk about setups today But the the setups will be in an underlying asset and you can take the trade any way you You prefer Whether it shares or futures or options the analysis again is based on the options market, but the setups that I'll show are in an underlying asset and Again the instrument that you prefer to trade is is entirely up to you All right and questions and comments are welcome And I will be watching the options dash Doug chat channel in discord in the chat and YouTube For your questions and comments All right, let's get started and What I want to talk about today my agenda for today is to go over a couple of news items Economic data that was released this morning Then I'll go through my positional analysis, and then I'll talk about setups So first of all the news today at 8 30 a.m. The retail sales came out and All of the numbers were negative and lower than expected And that was at 8 30 a.m. Eastern time. It didn't look like the market had much of a response to that data and then at 10 a.m. Michigan consumer sentiment was released as well as this one-year inflation and the Both of these numbers came in higher than forecast and The market definitely had a negative reaction to this data and Made for some very interesting setups both The QQQ and spy were trading at their call wall levels which Generally are expected to act as resistance And that's exactly what they did as this data came out and also options traders were Fading the move ahead of the data release as price QQQ and spy moved up to their call walls and Thank you very much RJ for pointing out the QQQ call wall act as resistance, and then I posted a Setup a divergent setup for SPX Moving up to the spy call wall. I posted that in discord All right, so that is that wraps up the data for the week and I'll talk about those setups in And more detail in a few minutes All right, let's take a look at Charts now and this is book map showing the ES SAP 500 futures and before I dig into this chart. I'm going to take a look at a larger time frame I'm going to go to a think or swim chart for SPX and This is just showing price SPX and key spot gamma levels And let me point out a Couple of things on this chart first of all SPX Over the last ten days or so has been trading in a very fairly narrow range and Attempted to break out of that range Yesterday and now is trading back within that range somewhere between around 4070 4065 on the downside and Around 41 30 on the upside so a very narrow range for the last few days and SPX is now back in that range And let me point out Some of the key spot gamma levels. These are provided to spot gamma subscribers For a variety of platforms here. This is think or swim And these are key gamma levels first of all Here's the put wall Back down at 3,800 you remember for the last couple days the spy SPX put wall has been up at 3,900 and now it has moved back down To 3,800 that's a strike with the largest net negative gamma that can be expected to act as support Here's the 4,000 level That is the absolute gamma strike or the key gamma strike and That can act as support resistance or a magnet for price Here's the 4,100 level and There's the cluster of levels there shown on this chart the key level is the 4095 Volatility trigger and that spot gamma is proprietary gamma flip level Below that level market makers position on the gamma curve is negative and that indicates that they have to trade With price to hedge their delta exposure and above that level like SPX is trading now Market makers position on the gamma curve is positive and that indicates that market makers will need to trade Against price to hedge their delta exposure and that tends to subdue volatility in a positive gamma environment and then finally Here is the 4,200 call wall The strike with the largest net positive gamma that can be expected to act as resistance So those are the primary Gamma levels key daily levels that I track every day And again that's shown on a 20-day one-hour chart, and I just want to point out Kudos to Lewis who posted a very simple think script in discord Then a showing he had it showing the difference between the SPX and ES and I just flipped it around To show a positive number Showing the difference between ES and SPX. This is showing in in real time and that number is Somewhere between 25 and 26 and Right, so I just took the number that I and I'll show why that's important in Just a minute when when I look at the bookmap chart So there's the difference between ES and SPX That may be difficult to see up in that upper left corner But the difference is around is somewhere between 25 and 26 and I just used a difference of 25.5 For my charts, so thank you very much to Lewis for posting that All right, let's take a look at another chart now before I get to book map. I want to take a look at Another SPX chart. This is just showing Price action for today. So this is showing price action for SPX and the levels that are in play for today and Here is the Probably the primary level this is the 41 30 level this was noted as resistance yesterday and support today and Earlier today it did act as support briefly and now As price moved below it acted as resistance and note up here. We'll Talk about this reversal in a minute and that reversal was at the Spy 415 call wall. All right, let's take a look at book map now so here is Here are the levels on The book map chart first. I'm showing Spot gamma cloud notes. These are again provided by spot gamma to subscribers for a variety of platforms and for Book map they're provided in the form of cloud notes, which are updated automatically sometime overnight So you get new levels every day automatically Right now spot gamma is using a 27 point difference between ES and SPX and I calculated again just from looking at that That little think script the difference I'm using is 25.5 So the cloud notes are showing the key SPX levels and again converted to an equivalent ES number 27 point difference. So there's the 41 50 level and then I have my own cloud notes and I'm showing Also showing the SPX levels. This was noted as a pivot level in the Spot gamma AM founders note and there's the 41 50 level and I have adjusted it. So it's one and a half points down from what spot gamma is showing and then I'm also showing the key daily levels for spy and there's the 415 call wall and Note that acted as resistance just as the consumer sentiment data came out and when I talk about setups, I'll show that options creators in SPX were fading that move Ahead of the data as price approached that 415 call wall So right now the spy 410 key gamma strike shown here seems to be acting as support So again, that's the spy 410 key gamma strike The spy volatility trigger at 411 and note the here's that 41 30 level that I pointed out on the SPX chart acted as support for a while Then it's price move lower acted as resistance All right, so we'll we'll talk about setups More in just a few minutes when I finish the positional analysis So one of the keys for me in my planning and preparation is to get get these levels right on the ES chart I'm showing the SPX and spy levels the key gamma levels those are I think both very important as you can see here Now ES reacts at these different levels All right, there were a few changes in levels from yesterday and First of all as mentioned before the SPX put wall shifted down From 3,900 to 3,800 so the SPX put wall has been down at 3,800 for quite a while shifted up to 3,900 for a couple of days and now it is back down at the 3,800 level and Spy the volatility trigger shifted up from four eight yesterday to 411 and then the call wall also shifted up from 412 to 415 and Then the QQQ volatility trigger shifted up slightly from 315 to 316 and The key gamma strike shifted higher from 315 to 320 So there's a pretty high concentration of Gamma at the 320 level for QQQ All right, let's take a look at the gamma charts now and we'll see where those levels come from It's like I need to do a refresh here We'll start with SPX Going to expand this chart. So this is the absolute gamma levels for SPX market makers position at these levels and The orange bars are showing positive gamma or call gamma and the blue bars are showing a negative gamma or put gamma And here is the 4,000 key gamma strike That's the strike with the largest absolute gamma that can be expected to act as support resistance or a magnet for price Here's the put wall down at 3,800 again the strike with the largest net negative gamma and then here's the call wall at 4,200 The strike with the largest net positive gamma that can be expected to act as resistance So that is SPX Take a look at spy and zoom in a bit here So for spy There's the 410 strike. That's the key gamma strike. That's pretty obvious Strike with the largest absolute gamma Here's the put wall strike with the largest net negative gamma. That's also pretty obvious And then here's the 415 level the new call wall that acted as resistance today the strike with largest net positive gamma Right, usually you have to do a refresh before I show QQQ and that's going to be the case today Do a refresh go to QQQ and we'll zoom in and There's that concentration of gamma, especially called gamma at the 320 level So that is the key gamma strike as well as the call wall and then the put wall for QQQ Still down remains down at 300 That's QQQ The other thing that I want to take a look at the Vana models And we'll focus on SPX and what this is showing is how market makers Delta notional or Delta exposure Changes with price and first of all, I'll focus on price alone That's shown by this Like gray curve and for those of you who've seen this before I'm sorry. I This may be repetitive I'm not sure if who's new and who's been here before but I'll just go over this quickly. So this is showing This is based on information at the beginning of the day Showing how market makers Delta exposure changes again with changes in price and What this is showing is that? Primarily market makers Delta exposure will increase as price increases and they have to sell futures to hedge their Delta exposure as price increases Market makers always want to remain Delta neutral So if price increases they have to sell futures to hedge their Delta exposure and That's shown by the light gray curve and then the This pink purple curve is showing how their Delta notional changes with changes in price Again on the horizontal axis as well as changes in applied volatility So this is a little bit more realistic taking into account The changes in applied volatility and what this is showing is that as price increases Implied volatility to any drop in implied volatility is not going to provide much of a Tailwind over Delta That's typical of a positive gamma environment. There's no put Vanna Available to boost a rally and then on the other hand as price decreases And implied volatility increases market makers Delta notional will increase And they will have to sell futures to hedge their Delta exposure as price drops and That is the Vanna effect the change in Delta with a change in implied volatility and note the Kind of the transition point here. It's just around For the purple curve like 41 70 to 41 50 something like that All right, so that's the Vanna model. That's for SPX And let's take a look at spy and just a slight shift in spy and QQQ Right, so that's the S&B 500 and the Nasdaq All right, let's take a look at some data and what I want to take a look at is Market makers gamma notional and this will just reinforce the What we just saw in the Vanna model and what this is showing is market makers gamma notional or their position on the gamma curve and Note for SPX spy Ndx and QQQ those are the ones that I that I track Market makers position on the gamma curve is positive So for an index that means that traders Spot gamma assumes that traders are short calls Market makers are long calls hence the positive gamma position and they will have to sell futures as price increases to hedge their delta exposure and Then when price drops they can buy back their short futures. So on a positive gamma environment, they're trading against price and That tends to subdue volatility so that tends to subdue volatility in a positive gamma environment and Truman asked as a purple line. I assume you're talking about the Vanna model Combine the effect of implied volatility and price or just the impact of implied volatility. I assume it Includes both but that is I You can always go to the Spot gamma help center to get more information on that And I will certainly I'll do that after this webinar to confirm that But my assumption is that The purple line is really the one that you want to take a look at Alright, so Truman again I'll I'll take a look after the webinar and I'll I'll post a response and discord and You can feel free to look for yourself as well Okay, so that is the planning preparation that I do for index products and this really is just setting the setting the stage for What to expect today today again given given this data expecting how Market makers are likely to react So the key for me recently has just been to like I said get my level set correctly on the charts Understand market makers position on the gamma curve at the beginning of the day and how that may change from day to day and then to watch the price action the order flow and book map as well as the hedging flow in In hero one of the reasons for that is the the Importance recently a very short-term trading has really governed price action from day to day And we'll take a look at some examples of that So let's start with setups and by the way, this is Friday. Typically. I look for a call gamma unwind in Stocks in my watch list And I checked for that this morning and there were some stocks that did have a Significant amount of gamma expiring today, but they did not seem to be Call dominated. So what I'm looking at is this next expiry gamma percentage And then I'm looking at the date and that's the expiration date. So that's all today and these stocks Snowflake, Nvidia, Tesla and Google all have Somewhat significant amounts of gamma expiring today, especially snowflake and invidia But we'll just take a quick look at this composite view and this red under lot underneath the curve indicates that this stock The gamma it's put dominated So there's no really the call gamma unwind is Occurs in stocks that that have more that have green somewhere under this curve that are more called call dominated in a certain price range and those calls Typically traders will buy Calls that expire on Friday So today is Friday expiration they buy weekly calls and those calls start to lose value as Expiration approaches and that is the charm effect the change in Delta with the change as time passes change in time and Market makers when traders buy calls market makers sell the calls They have to buy long stock to hedge their Delta exposure and then when those calls start to lose value they can Sell their long Long stock edges But that's not the case all there's no call domination. This is all pink or orange or red Well except for Google So there may be a call gamma going on on one going on on Google, but this number 26.6 26% it's a little bit under the threshold that spot gamma recommends of about 30% So this is we're not and I don't actively trade Google typically So this is not something that I was looking for so what I was watching is first of all the S&P 500 This is the hero signal for those of you who may not be familiar with us. This is showing Price with a white line and the hero signal with the purple line and what this is showing is a combined signal for SPX spy Xsp which is not significant and also new this week ES futures. So this is a combined signal taking options trades for SPX spy and ES and combining that all into one signal and recently What I have found is SPX provides the The signal that is closest to Price action and providing the best signal. So let's just take a look at so that's the combined signal and what I was watching is the The setup in the morning for the reversal at the 415 spy 415 call wall So there's the combined signal and Let's take a look at the individual components now. So there's spy Really not it. There was a confirmation for the move up in the morning for spy But spy recently has not provided a very clear signal. So that's spy Now let's take a look at the S&P 500 futures So it took The futures signal a little Little while to respond but now Traders are taking negative Delta positions in ES futures. So we've looked at the combined signal We've looked at spy and ES separately and now let's take a look at SPX This is what I was watching this morning and this is what I was using yesterday. I posted a Very nice setup Yesterday I posted this in Discord at the end of the day or at the end of the evening really and posted it on Twitter as well a Very nice setup long setup Using just the SPX signal and my recent experience is that SPX alone Is providing the most the clearest signal for the S&P 500 At the one that I feel most confident Acting upon so let's zoom in here and Yesterday it was all zero DTE options trades and traders were buying Zero DTE SPX calls and selling which is kind of unusual selling SPX puts Normally they're buying calls and buying puts and it's just a matter of seeing who's winning the call buyers or the put buyers and yesterday They were buying calls and selling puts both positive Delta Positions so today I was just looking at the total hero signal and remember that This price for the S&P 500 ES SPX spy all approaching the spy 415 call wall That should act as resistance and note that SPX traders started taking negative Delta positions. Oh about 15 minutes Before 10 before the data was released and That set up a great short at that 415 resistance level so the the way that I approach this when I see that divergence when I see the divergence and Hero signal then I'll look at the bookmap chart and look at a level a potential level for a reversal and there it was the 415 call wall for spy again expected to act as resistance So Bartos asked please have a look at the zero DTE and coming right up. We'll take a look at that So this is showing next expiration And that for SPX that's today Since SPX has options that expire every day and that initially provided a clear signal in the morning very close to The total signal all trades all expirations and just to be thorough here this the hero signal did confirm Along from the open All right, let's Let's zoom out now Alright, so it looks like the Looks like the zero DTE traders are now a little bit more bullish Than the all expirations So this is the green line this green line is showing Next expiration or zero DTE for SPX and then the purple line is showing all expirations and RJ ask can we break out puts and calls for SPX? Sure. All right, so I'm going to to avoid confusion. We'll look at first of all that We'll turn off next expiry. So we'll just look at the total signal and we'll look at puts and calls and This is a little bit unusual typically, there's a pretty steady line of Call buyers and a pretty steady line of put buyers and right now it is showing kind of a mixed signal here. So traders Initially were in the morning in this short setup They were selling calls and started buying puts Sometime later that shown by the falling blue line and then now more recently They've started selling puts shown here as price moved down to the spy 410 key gamma strike and Have also started buying calls So that is the total signal So put sellers into the low So put Traders were selling puts started selling puts at the 410 at the Excuse me. They started selling puts as price approached the 410 level. That's the spy 410 level Let's go take a look at book map And so we're going to look at somewhere between 1250 and 1 o'clock so there's Zoom in so they started selling puts as price approached This spy 410 key gamma strike so they were Just like they did before at the 415 level They were trading they were fading that move starting to take negative Delta positions as price approached the 415 level and then as Price approached the 410 level the key gamma strike. They started taking positive Delta positions And we'll take a look at the spy chart also That was just a beautiful short from the 415 call wall down to the 410 key gamma strike All right, let's go back and take a look at hero again All right, so that is the all expirations puts and calls Now let's take a look at next expiration right, so the green line is calls and the blue line is Is puts So this is pretty typical for zero DTE Traders are buying calls shown by the rising green line and they're buying puts So that's in the zero DTE So the simplest thing to do is Just look at the total signal and for all trades all expirations and this number the notional value is negative minus 417.8 million so net net Options traders and SPX are taking negative Delta positions price continues to move lower. Well, let's see that's I'm not showing the complete chart Sorry All right, so that that Position is the time that I was looking at it at 1230. It was negative and now the total notional value Is positive so they're again taking positive Delta positions as price approach that 410 level All right, let's let's just take a look at the total signal for the S&P 500 and overall that looks Pretty similar to the SPX Just slightly more bullish All right, so that is the S&P 500 And I thought that especially looking at the SPX chart which recently has given me the most confidence in Taking a trade Led to a great short in the morning All right, the next setup that I want to take a look at is QQQ and Again, thank you to RJ for pointing this out on discord and This is a very clear signal Which doesn't always happen with QQQ, but today it was just Just a beautiful setup here notice the call wall and the Key gamma strike and remember all that call gamma that we looked at in the in the absolute gamma levels charts and Traders started taking Started fading this move as price approach that call wall level Setting up a great divergent short and let's go take a look at book map. So there's spy and Again the great Set up took a while to for it to play out but a good five-point move in Spy here's QQQ There's the reversal at the 320 call wall and notice all the activity up at this level by sweeps shown by the these small green dots here and Then sell sweeps as well By sweep small green dots Sell sweep small red dots and eventually this resolves as aggressive sellers come in show by the Pink volume dots start to move price lower and now down to the 316 volatility trigger and I meant to look at Yes in Book map here and show how to read this setup as well and Let me zoom in Actually, let's zoom in on the morning session and I think the Order flow and in book map here for the ES is Typically the easiest to read Compared with spy and QQQ and you can clearly see the A couple of things here first iceberg orders Coming in this Yeah, that may be easier just in show that here. I'm showing that pink number with the e 791 contracts iceberg orders large traders Use iceberg orders to hide their size and there was a stop run Up into that level show them all this rising orange line Meanwhile Large traders are fading the move with their iceberg orders and note the shift in order flow from green dots on The way up green volume dots By minus sell buyers are winning To these pink dots Sellers are winning there. There's a market sell orders dominating as price moves down Below the forty one fifty level below VWAP and again, I showed how the 4130 level acted as support initially and then resistance and Price moved on on down gradually down to the 410 spy 410 key gamma strike level Or just above it zoom back out and these lines on the sub chart This is a little bit unusual to see Iceberg orders going the same way as stop orders and cumulative volume Delta what I'm looking at in the sub chart This yellow line those are sell stop orders helping to fuel the move lower and the light blue line is showing iceberg orders and Typically larger or often large traders will use iceberg orders to Buy weakness and sell strength and here they were They were selling weakness. They were joining the the move lower And then finally cumulative volume Delta shown with the dark line that shifts to the pink line as Cumulative volume Delta goes negative. So that was the move lower in ES spy and qqq And now as we saw options traders are starting to take positive Delta positions and Price is moving higher. All right. I've got a couple of minutes left about 10 minutes left. Let's look at some stocks First of all is Apple Let's take a look at hero. So there's qqq the great setup Let's take a look at Apple so first thing in the morning there was a confirmation long for a quick long and then This is similar to SPX and qqq note the divergence here heroes the purple line starts to make lower highs Price is making pretty much equal highs and then follows a few minutes later After the data release at 10 a.m. Oh, and I missed your question and Kenobi in in discord Do I have a recommendation for online resource or book for good understanding of gamma and its use in the impact for hedging? So your first resource the best would be to the spot gamma website and The spot gamma YouTube channel The spot gamma Website has a lot of free resources Just go to the free resources link on the spot gamma website And they have a pretty thorough Help center there support center and then the second resource would be the spot gamma YouTube channel Both are highly recommended And if you're not listening now, I will I'll post links And after the webinar Alright, so that's a setup in Apple. Let's take a look at Let's take a look at book map now for Apple There's the reversal at the 166 level note these cell sweeps coming in small red dots multiple cell sweeps Not a lot of range a couple of points moving price lower To the 164 level So that was Apple And let's take a look Take a look at Microsoft and we'll take a look at hero for Microsoft and confirmation long and short Quick long in the morning traders are taking positive Delta positions Pretty similar to Apple let's zoom in on the morning note how hero levels off. Let's just see what traders are doing So this is showing that traders were buying calls in the morning They stopped buying calls and they were just slightly buying puts and then as the Data came out they started selling calls Price moves lower. Let's go back to the total signal and net it is Negative Delta. Let's go take a look at book map there's Microsoft and There's the reversal at 10 a.m. Note the shift in order flow we've got Green dots market buy orders these volume dots moving up order flows shifts bearish Pink dots market sell orders as well as that cell sweep. They are shown by the small bright red dots Price moves lower it moves up does a retest of VWAP and moves down past the 285 hedgewall Down to the liquidity the price target at 284 and note the if price If traders decide to take price lower It looks like they got through the 284 liquidity And now it has come back in But if they move price lower and get through that 284 and 283 level There's the 280 put wall and given that the time of day that may be a Maybe a long shot Let's go see what options traders are doing now So they have stopped Taking negative delta positions and looks like slightly bullish positions now with a sloping Hero line starting to slope up about one One o'clock 1 30 Right, so that's Microsoft Just take a look at Nvidia Nvidia is up and down today Hero provided confirmation long pretty good short signal here Hero leveled off Starts to move down price moves down with everything else Confirmation long and a little bit of a lagging indication for a short setup and this Vertical line here shows a Block order a large institutional order And let's just see what that is So it looks like call buyers coming in a large block order for calls And that helps to move price up On around 130 140 something like that around 140. All right, let's go take a look at book map Go to Nvidia and choppy session pretty wide range up and down and notice how price is somewhat Focused and accumulating at this 265 hedge wall That's showing the session volume profile Volume concentrated So far that 265 level with hero leading the way Up and down or providing a good strong confirmation signal. Let's take a look at Tesla zoom in just on the So the morning I You know, I guess I really wouldn't know how to interpret this hero is not Not showing much in the morning fairly flat and Price moved down toward the put wall at 182 before reversing higher And I would take that as a confirmation long then definitely a divergence short setup With a lot of other stocks Options traders were fading that fading the move higher Let's go take a look at book map and there's Tesla the reversal very Very fast V shape reversal Just above the put wall there Here's the put wall and then the reversal lowered the absorption showing of the 186 level price did make it down to the 182 put wall And now it's moving higher past this 185 hedge wall and let's go back and see what options traders are doing right now So so far today they have been Slightly net buyers of calls Still buyers of puts as well, but they have started selling those puts now as price Hit the put wall They're selling those puts and prices moving higher and they've started Starting buying calls again shown by this rising orange line and the total signal gives a More clear picture All right, so that's Tesla. Let's just take one class last look at the S&P 500 We'll start with the total signal definitely Definitely bullish Note the value there 1.23 billion SPX 154 billion million. Yes futures and that's actually negative 1.23 billion Let's take a look at spy 1.96 Billion all giving this total signal of 1.19 billion Okay, so I was looking at SPX the hero for SPX this morning that set up that great short and The S&P 500 ES SPX spy And also as again as RJ pointed out the great setup for a QQQ short with the reversal at the 320 call wall key gamma strike call wall All right, that's all I have for today Hopefully I've answered your questions. I want to thank you for watching Thanks for your questions and comments And everybody have a great weekend and I will see you on Monday. Thanks again. Bye