 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 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, 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. 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 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 and 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 on SpotGamma Hero to confirm my thesis and for setups for entries and exits. And questions and comments are welcome. And I will be watching the Options, Doug, Chat and Discord and the Chat and YouTube for your questions and comments. So please, again, your questions and comments are welcome. All right. So what I want to talk about today, first of all, the news items, economic data and events for today as well as the rest of the week. And then we'll go through our positional analysis and then talk about some setups. And there were some great setups this morning, both long and short. Okay. The news for today, first of all, the big event for the week most likely was CPI today. And it came in a little bit hotter than expected. So I think, let's see, month over month actual came in higher than the previous number, but as expected, the same. So that was the core and the CPI. Year over year came in a little bit hotter than forecast, both the CPI and the core CPI. So anyway, that's the data and the market has been been up and down based on this event. So so that was the news for today. And then tomorrow, retail sales come out at 830 a.m. Eastern time. And tomorrow is also the VIX expiration. Then on Thursday, the 16th, the PPI comes out at 830 a.m. Eastern time. And then finally on Friday, the 17th, that is the February monthly options expiration. Okay, let's take a look at charts now. Let's let's start with book map. So this is the book map chart for the S&P 500 futures. And this shows the levels that are in play today. Let's go back to thinkorswim now and we'll get a higher time frame view of what's going on today. So this is showing this steady trend line. This is SPX and a thinkorswim chart showing the current spot gamma levels and then a steady uptrend until it broke SPX broke below this uptrend last Thursday. Tested the 4060 level, which was equivalent to the spy 405 level, and then it has trended higher. So that was last Friday. And then today has been up and down in the 4100 to the 41 49 range. And this is showing again the current levels. This is in thinkorswim. And these levels are provided to spot gamma subscribers. And this is showing the key levels. There's the put wall still at 3900 and the key gamma strike at 4000 and then the call wall at 4200 and then the intermediate levels in between. So SPX is trading above its volatility trigger, which is generally considered bullish. So that is the bigger picture view. Now I want to look at another thinkorswim chart. So that's a one hour chart. And let's go take a look at today. This is a one minute chart for today. Again the same levels for SPX and showing the range is around SPX 4100 to 4150, a little bit below and a little bit above. So those are the levels that are in play today, the spot gamma levels. Let's take a look now at book map. And again this is the S&P 500 futures in book map and showing the levels they're in play for today. And on my chart I have two columns of levels. In the first this is the spot gamma cloud notes that are provided to spot gamma subscribers for a variety of platforms. We just saw the the levels in thinkorswim and then in book map these levels are provided in cloud notes which are updated automatically. And this is showing key levels for SPX and that is SPX 4100 converted to an equivalent ES number. So right now spot gamma is adding 10 points to SPX to come up with an equivalent ES number and that's that's pretty close to correct. And it's also showing combo levels which combine SPI and SPX levels into one level that are converted to an equivalent SPX number and then converted to an equivalent ES number. Okay thank you JEC. Yeah the 10 is close enough. Okay so the levels that are in play today first of all this morning right after the data this combo level L5 level acted as resistance price went down and tested the SPI 410 key gamma strike and that was noted as support in the AM founders note spot gamma AM founders note and then price went back up to this 41 this is 41 50 level so that's the combo L3 41 49 level as well as the SPX 41 50 level and note that's also the upper edge of the expected move and that's shown in the second column here this is my cloud notes and I'm showing things like this upper edge of the expected move and the key SPI levels so again there's the SPI 410 key gamma strike and again act as support price broke and now price tested somewhere between the zero gamma level and the SPX 4100 level and we'll we'll take a look at spot gamma hero in a minute to see how options traders were setting up both longs and shorts in the S&P 500 and let's just let's take a look at spy and we can see the levels and play so here's that test and the just after the data of the 41 75 level 41 74 SPX 41 74 the test of the key gamma strike back up to the 415 level back down to 410 and then down to the four SPX 40 100 level and note on the these are I'm using my cloud notes as well and I have the spy levels shown that just the round number levels are in yellow the spot gamma levels in white with red text and then I'm showing the key SPX levels as well and I just enter all these numbers in our spreadsheet and they're displayed and the lines are drawn on the screen so that's the S&P 500 those are the levels that are in play and let's talk about shifts and levels now and there were very few overnight from yesterday for the S&P 500 the only shifts and levels were minor the spy volatility trigger shifted up from 407 yesterday to 408 today and then the call wall actually shifted down from 420 yesterday to 418 today so minor shifts and then for QQQ the put wall shifted up from 285 to 290 so minor shifts and levels as traders were making their final preparation set up for the CPI report today all right let's take a look at the let's take a look at the gamma charts now and these are the absolute gamma levels so these are this is where those numbers come from what I'm looking at this is again absolute gamma market makers absolute gamma and above this zero line that's positive gamma recall gamma shown by the black lines or black bars and negative gamma or put gamma below the zero line shown with the teal bars so this 4000 level this is SPX 4000 still remains the key gamma strike the put wall is at 3900 so the put wall is the strike with the largest net negative gamma and that can be expected to act as support and the key gamma strike or the absolute gamma strike is the strike with the largest absolute gamma and then the call wall is up at 4200 and that's the strike with the largest net positive gamma and that can be expected to act as resistance so the thing did the thing notable thing here is really the call gamma above the 4000 level so between 4000 and 4200 the concentration of call gamma again shown by these black bars so that's SPX let's take a look at spy now and here is the spy 410 key gamma strike and the put wall is pretty obvious at 400 the strike with the largest net negative gamma and the call wall has actually shifted down to 418 but I would I wouldn't be surprised if it shifted back up to 420 tomorrow so the concentration of gamma in spy is 400 to 420 so put wall at 400 put wall at 400 key gamma strike at 410 and the call wall at 418 but really the you know the concentration of gamma is up to 420 so what spot gamma and the AM founders know what they were calling for today was 410 acting as support which it has for most of the day and then 420 acting as resistance so this is very similar to SPX with the concentration of gamma for SPX between 4,000 and 4200 and for spy between 400 and 420 all right let's take a look now at the NASDAQ and we'll take a look at QQQ and 300 is the key gamma strike and now the put wall has shifted up from 285 yesterday to 290 and then the call wall remains at at 310 so that's the QQQ all right let's take a look at data now and a couple of things I want to point out first of all the spot gamma implied move for the for the day and this is based on on their data and the options market the implied move for SPX from the RTH open plus or minus 41 points and I think SPX has come pretty close to that and right now it's it's pretty much flat but it is as we've seen it traded in quite a range up and down all right then the thing that I normally concentrate on is the gamma notional and this is market makers position on the gamma curve and this knowing this number how market makers are positioned on the gamma curve helps you to anticipate movement for today for the day especially on days of there's big economic data like today or around expiration so today this is showing SPX in the left column spy gamma notional in the middle column and QQQ gamma notional on the right so we can see that for SPX market makers position on the gamma curve is positive slightly positive at 287 so this means that just thinking in terms of SPX market traders are short calls market makers are long calls and this is a positive gamma environment as price increases they have to sell futures to hedge their delta exposure and as price drops they can buy back those short futures so they're trading against price in a positive gamma environment and that tends to subdue volatility and it's just the opposite for spy here market makers position on the gamma curve is negative for spy so that means that traders are long puts and market makers are short puts and as price decreases they have to sell futures to hedge their delta exposure and then as price increases or implied volatility drops they can buy back those short futures so and then QQQ is also slightly negative so the shifts in levels were all positive or less negative today so SPX yesterday gamma notional was 50 and today it shifted higher to 287 yesterday spy gamma notional was minus 1061 and it is less negative today at minus 689 and then QQQ was minus 272 yesterday and has become less negative today at minus 141 so minus 689 for spy that's not not necessarily a lot of fuel for a a banner rally put banner rally although i think the key today and i'll i'll talk about this just a little bit more was to watch vixx today and that gave a lot of clues about direction of the market all right let's take a look at the vantage charts now and these charts are a graphical illustration of what i was just talking about so this is SPX and this shows how market makers delta notional changes as price changes so delta notional their delta exposure shown on the vertical column price or strike is shown on the horizontal column and you can look at this chart and see how market makers delta notional will increase as price increases and this green line also shows how it changes with changes in implied volatility and that's the van effect the change in delta as implied volatility changes so this is showing in a positive gamma environment that market makers delta exposure will increase as price increases and they have to sell futures to hedge their delta exposure and then spy just the opposite negative gamma environment market makers have to sell futures as price drops to hedge their delta exposure and they can buy back those futures as price increases and the black line is showing how their delta exposure changes as time passes and that's the delta of the charm effect the change in delta as time passes and then finally qqq also in a slightly negative gamma environment all right so remember i'm going i'm going through the steps of my planning process and this is something that i track every day these are the key gamma strikes for all the stocks of my watch list and i track the previous key gamma strike the key gamma strike from the previous day and then i compare that with the current key gamma strike that's the key gamma strike for today and i know whether the change was higher or lower so if the key gamma strike increases i color coded green just a kind of an easy easy visual reference and then color coded red if it dropped so that's just a starting point and then the last thing that i want to point out this is a note that was in the spot gamma am founders note there's usually a pretty comprehensive note and this is just one little snippet so noting that if the cpi is more or less in line which i i think it was just month over month as expected year over year slightly worse than expected that that will lead to a reduction in implied volatility and markets testing the 4200 call wall so that was really the base kind of the basis for my thesis of looking at watching implied volatility so again i think that was one of the keys today so implied remember that uh for spy market makers position on the gamma curve was negative so as implied volatility drops there those puts are losing value and market makers delta exposure decreases and they can buy back their short futures short future hedges okay so again the watching vix was a was a key for today so here's vix up and down up and down and then overall for the day down quite a bit down about seven percent that's shown you know i i certainly don't expect anyone to be able to see that but it's down about seven percent right now so pretty significant job drop in vix so that that actually helped me quite a bit my long-term positions were in a little bit of about too much positive delta so this dropping vix really really helps those longer term positions okay so my thesis for today based on all this was primarily to watch vix there were um you know noting that spy gamma notional was somewhat negative and there were very little shifts in the levels for sp uh the s and p 500 so again watching vix waiting to see how traders reacted to the data all right so let's go back let's take a look at some setups now and here's the this is the s and p 500 spot gamma used to call this the es futures and now they're just showing this as the combined signal for sp x and spy and this is what goes into the into a signal for the s and this is what you want to look at if you're trading es trading the s and b 500 futures so let's expand this and this is going to be again this is a combined signal of sp x and spy and it's going to be mostly spy but again it's adding in the spx number so what i saw this morning was confirmation long after this quick drop down price dropped down quickly and then moved up as traders were taking positive delta positions so that was the first setup and then this setup this short was i think even even better a divergence short let's zoom in we can see this more clearly and what i'm talking about here is hero stops starts dropping and price follows well it looks like about 10 minutes later so all right let's take a look and see what what was vix doing in this time frame from 9 30 to 11 so let's go let's go take a look at our vix chart and so we're looking for vix falling first and then rising and so there it is vix jumps up just right after the open then drops down then starts increasing so that is the that's the 9 30 actually this is showing vix open at 9 15 so there's the vix from about 9 15 to 11 confirming the setup and jc says he he took that divergence great great trade all right so there's a confirmation with vix and with order flow and hedging flow let's go take a look at the let's just look at the spy chart now very similar the divergence here i think is a little bit more clear to see so confirmation long then hero starts to drop and price follows oh it looks like 15 20 minutes or so later all right so let's go take a look at book map now so we see the confirmation long and the divergence short so we're on the spy chart now maybe a little bit easier to see so let's zoom in just on the morning session here and you can see how order flow confirms that first of all notice the absorption of the big green dot here just after 9 30 that's market buy orders aggressive buyers coming in and buying around that 410 level and notice all the green dots moving up aggressive buyers up until price gets to the spx 41 50 level and then finally finding resistance at the spy 415 level that's an lg2 level large gamma 2 and the gamma levels are ranked from one being the highest or the most significant gamma 2 5 being the least significant so this resistance early in the morning at the 41 74 that was a combo 5 level and this 415 was a more significant level and the thing to note here in the order flow look at all the pink dots coming in aggressive sellers start coming in and remember that traders were taking negative delta positions at this time and vixx was starting to rise so all leading to the short setup here with two entries and notice the change in cumulative volume delta positive here and then shifts lower at 10 o'clock actually as price continues to increase all these dots again pink dots coming in trader selling and finally price reverses lower and there are actually two entries two primary entries first of all around the 41 50 415 level and then another trend break here around 411 down to the spy 409 spx 4100 level so that's that's the s and p 500 good setups both long first thing right after the open and then short setups and it looks like now the s and p 500 is making it what it's way back up to the spx 41 50 level let's go take a look and see what a hero is doing what options traders are doing so now this is showing a potential short divergence setup let's just see if looking at a shorter time frame helps and now they're swinging back to positive delta and we can also take a look puts and calls here so they're starting to buy calls again and selling puts and notice how that becomes a lot more clear when you change this rolling window period down to 30 minutes so this is just looking at the the last 30 minutes of data kind of like a shorter term moving average okay so that is the s and p 500 and let's take a look at some stocks now apple there was an okay set up in the morning very strong confirmation traders taking positive delta positions price reacting very closely to options trades and hedging flow so let's go take a look at book map we'll take a look at apple and up and down just like the s and p 500 but here's the there's a long setup in the morning i thought the setup in spy was a lot more clear than this but anyway that's apple let's go take a look at and by the way i'm jumping from screen to screen here when i trade i actually i have two monitors i'm looking at uh hero on one screen and book map on the other so i don't when i'm actually trading i don't have to jump jump back and forth like this here's amd strong rally in the morning a reversal off the 82 level which is the put wall and the hedge wall let's go take a look at let's go take a look at hero now take a look at the and traders were primarily buying calls so i would consider this somewhat of a divergent setup first thing in the morning traders buying calls price drips down to that put wall level and you anticipate that acting as support so that 82 level was definitely in play and traders were buying calls and that was a good entry point for a long let's go back and look at book map we'll zoom in on this just on this morning so there's the reversal uh bullish order order flow notice all the green dots the market buy orders aggressive buyers coming in at that support level the 82 support level and taking price up to liquidity targets above at the 85 level and for those of you who may not be familiar with book map this is the heat map shows a history of resting liquidity in the order book and price seeks these levels so at the 85 and 86 level before price is absorbed there and reverses lower so good for a four point move in in amd which is a pretty strong move for an 80 85 dollar stock and again confirmed by options trades and market maker hedging flow all right amazon yeah jc amd is whom the last is moving yeah this move uh today was uh was a large move for amd sometimes it does move very slowly all right so here's amazon take a look at hero now not as strong a correlation until you separate outputs and calls and see in the morning that uh pretty similar to amd that traders were were buying calls as price dropped and then started to move higher so that's shown by the rising orange line kind of a call divergent setup there all right let's go back and take a look at book map amazon we'll zoom in on this increase the dot size a little bit often with stocks the opening print and the closing print the volume is so large that it dominates everything else so i'm talking about this here's the opening print this big pink dot price drops lower and these small green dots are showing a buy sweep at that level and notice the these volume dots change to green so aggressive buyers are coming in with their market buy orders just below this 98 hedge wall level and start to take price higher as traders are buying calls up to the first target at the 100 key gamma strike and then can't quite make it up to the 101 liquidity so that's the setup in amazon and pretty similar to other stocks a quick reversal down and then option trades and aggressive buyers coming in and taking price higher all right so up and down like a lot of other stocks here's google and google still can't get up off the mat after it was knocked down with this ai the competition i guess between microsoft and their new chat gpt and google so google has floundered around this level for several days now let's just take a look at hero in very strong correlation between price action and hedging flow so there is a there's a short setup with this trend break as hero turns lower and then notice as hero turns higher price starts to move higher so not a lot of movement in in google but they're uh you know just to point out there's a pretty strong correlation between hedging flow and price action today all right the next is meta all right so jec says uh amazon was his trade of the day and took the hedge wall to the above the key gamma strike so good trade all right here's meta pretty strong correlation between hedging flow and price action in the morning let's go take a look at book map so i'm going through all these stocks because there's because there was a a pretty strong correlation between hedging flow and price action and many of these stocks so here is meta again quick reversal down to the 176 level and as traders are taking positive delta positions price moves up to the 180 key gamma strike and the liquidity at that level that was the first target and then reverses lower at the upper edge of the expected move and that's the expected move for the week and that's based on the options market there's meta and then still uh chopping around the 180 key gamma strike microsoft up and down today let's take a look at hero strong confirmation of the morning for up and down long and short let's go back to book map and there's long in the morning not really confirmed that well by by order flow we just zoom in on this or at least long was not i think there's a better confirmation for the short what i'm looking at is the the color of the dots and falling cvd so pink dots coming in absorption at the 275 high liquidity level trend break and price or versus lower as traders started taking negative delta positions and know the target for the down move again you can see these pink dots more clearly now the shift to negative order flow pink dots aggressive sellers coming in and taking price down to the 270 key gamma strike and that was the target for a short setup all right the next was Nvidia great this great long this morning if you could catch it i've got the 230 level there without a label i believe that's the call wall let's just check on that so we'll go to Nvidia see if it's showing on this chart yeah it is so 230 is the call wall and traders are buying calls yeah Nvidia straight up tesla the same thing we'll take a look at tesla in just a minute so traders buying calls and driving price higher up to the 230 call wall liquidity at that level so let's go back and take a look at book map again so again you had to be pretty fast to catch this let's just zoom in so definitely bullish order flow and bullish hedging flow notice the reversal here at the 214 215 level all the green dots coming in and moving price higher to the to the first target actually the first target i would say was the 220 key gamma strike next target at 225 liquidity there and then the target above at the 230 key uh call wall okay so that's Nvidia i'm just reading through questions and comments and we've talked about the S&P 500 let's just take a look and see what spy is doing so for today what i've been looking at and what i trade this was the um i thought this was the best setup this was the easiest to read the easiest to trade i like the the clear divergent setups again confirmation in the morning this first move up with hedging flow and order flow and vix so three strong confirmations and then the divergent short down to the 4100 level and let's we'll just take a look at that in the ES so i think the order flow here in ES really confirms the same thing look at this area right here so the up move look at all the green dots aggressive buyers all the way up to around the 4170 level and then pink dots coming in the aggressive sellers with their market sell orders as traders were taking negative delta positions and vix was increasing and price drops let's just zoom in on that level on that price range so notice in the sub chart here i have cumulative volume delta with this pink dark blue line rising and falling and also stop orders shown by the yellow line so buy stops helping to drive price higher and then sell stops helping to drive price lower so a number of ways to trade this the s&p 500 with the es futures spy shear spy options uh or spx options any number of ways to to trade this right so right now price is just starting to uh is chopping around the es 4150 level just below that let's go back and take a look at spy so notice the two volume levels here shown by this session volume profile right between 412 and 413 and then between 410 and 411 that's where volume is concentrated for the day all right let's finally let's take a look at tesla another straight up move in the morning confirmed by order flow first so price goes down checks the 190 the high liquidity at that level buyers absorb these sellers and the green dots come in aggressive buyers come in and take price up to the first of all that this range from 199 to 200 200 is the call wall and the key gamma strike notice all the liquidity at that level 199 to 1200 and then price continues higher notice all these buy sweeps here these small buy uh bright green dots heading up to the 205 liquidity and then order flow shifts bearish and price versus lower right let's go take a look at hero now so that's invidia take a look at tesla and there's almost always a very strong confirmation between hedging flow and price action and tesla so mainly driven by calls traders buying and selling calls and price responds so there's the long set up in the morning price reverses lower that's just a pullback and then price continues higher let's go back and take a look at book map now take a look at the our day notice that order flow is somewhat bearish today except for this first move higher but traders continue to buy calls so price is moving higher and looks like that 205 liquidity is uh could be on deck shortly all right finally i would just want to wrap it up let's just take a look at hero for spy again and see what traders are doing take a look at a 30 minute look back period and now they're taking positive delta positions again so they're buying calls and selling puts and i changed this to a again a shorter time frame shorter rolling window to get more clarity on that and finally we'll take one last look at spy and book map and again chopping around the 412 to 413 level okay that is that's all i had for today jc thanks for your commentary today it always helps to know somebody's listening when they're typing questions and comments so i appreciate your your dialogue that that helps quite a bit and everyone again that's all i had for today remember tomorrow data coming out is retail sales at 8 30 am vixx expiration today and just in takeaways for today i think the the keys for today were to watch order flow hedging flow and the vixx for confirmation and they all gave great confirmations for longs and shorts today in the s&p 500 so thanks again everyone thanks for your questions and comments and i will see you tomorrow thanks again bye