 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 a materials information and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations risk disclosure training futures equities and options involve substantial risk of loss and it's not suitable for all investors past performance is not necessarily indicative of future results here's my contact information if you have any questions after the webinar or at any time the best way to get in touch with me is discord my name at discord is Doug P and also you can post questions content all related to options order flow hedging flow in the options stash Doug chat channel and discord and then I'm also on x formerly known as Twitter my name there is at Doug plus so this is the the best way to contact me the focus of my presentation and the focus of the options stash Doug chat channel and discord is options order flow the impact of options markets on stocks and futures and the influence of market maker hedging flow on price action I have a two-step process for trading and the first is planning and I use positional analysis I look at how traders and market makers or positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as a directional bias and the second step in my process is execution and I look at real-time motor flow and book map and real-time market maker hedging flow and smart gamma hero to confirm my thesis for setups for entries and exits and when I talk about setups today I will be talking about setups and an underlying asset and the setups can be taken with futures shares of stock or options questions and comments are welcome and I will be watching both the options stash Doug chat channel and discord as well as the chat and YouTube for your questions and comments and again if you have questions comments after the after the webinar post them in the options stash Doug chat channel in book map discord or you can contact me Doug P in discord my agenda for today what I want to go over is news items economic data events and earnings for today as well as the rest remaining remainder of the week then I'll go through my positional analysis then I'll review some setups from this morning and then I'll talk about 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 you know please let me know and I'll be glad to do that right so let's start with news items economic data first of all there was some data out at 10 a.m. today the jolt's data and consumer confidence both came in less than expected lower than expected and apparently the the market like like that tomorrow ADP comes out at 8 15 a.m. that's the ADP employment report GDP at 8 30 a.m. Eastern time and then on Thursday the PCE data comes out at 8 30 a.m. Eastern time and then Friday is the jobs report the first Friday of the month at 8 30 a.m. Eastern time right so that's the data for today market interpreted data as bullish and then a couple of key events next week this week key data reports PCE on Thursday and the jobs report on Friday all right let's get started with positional analysis now so let's take a look start with book map this is excuse me oh excuse me had to sneeze this is the SAP 500 futures wow what a day I will we'll go over this in a few minutes so before I take a closer look at this chart I want to take a look at a larger time frame I'm gonna go to a think or swim chart so I can see a larger time frame here this is the SPX in a 30-day one-hour chart and let me point out some things on this chart first of all this is the this rally began on Friday the 18th that was the monthly options expiration for August and that was a somewhat of an equal call dominated put dominated slightly put dominated rally anyway there were puts that expired market was in a very negative gamma position market makers position on the gamma curve very negative a lot of puts expired traders were long puts market makers short puts short futures to hedge their position and as price began to move higher those puts quickly lose lost value due to charm and Vanna drop at the passage of time they were expiring that day as well as the drop in implied volatility and the rally continued up until last week right the day before Jerome Powell spoke at the Jackson Hole symposium price dropped pretty significantly and then when the market interpreted Jerome Powell's comments as not as bad as expected the rally resumed and continues today so SPX trading now well above the upper daily and weekly expected moves so the lower and upper weekly expected move shown with the dash purple lines and then the lower and upper daily expected move shown with the dash blue lines that information comes from the options market and then note also there are some key spot gamma levels on this chart I'm going to point out the key daily levels these are shown with the dark red horizontal lines first of all there's the put wall at 4300 that is the strike with the largest net negative gamma that can be expected to act to support and the next level up is 4400 that is the absolute gamma strike that's a strike with the largest absolute positive and negative gamma then just above that is the volatility trigger at 4420 that a spot gamma is proprietary gamma 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 enhance or increase volatility on the other hand like SPX trading now well above that volatility trader market makers position on the gamma curves positive in a positive gamma environment market makers have to trade against price to hedge their delta exposure and that tends to subdue volatility and then finally the call wall now has dropped down to 4500 so that is the next strike in play it looks like that is that is imminent the 4500 call wall that's the strike with largest net positive gamma that can be expected to act as resistance and note that level did drop again from 4600 yesterday to 4500 today and the volatility trigger moved up slightly from 4415 to 4420 so those are the shifts and levels for SPX and normally I would interpret that move lower in the call wall as bearish but not today all right so those the the daily levels and weekly levels expected move as well as the spot gamma key daily levels right this is the S&P 500 ES futures and book map and I have my cloud notes here where I have the SPX levels so there's the 4500 call wall I also have spy levels here's the 442 volatility trigger for spy that level did move up slightly from 440 yesterday and note that level was the support support level at 830 a.m. Eastern time and that was the you know maybe the launching point for this rally to move higher that really gained steam with the cash open at 930 and then the 10 a.m. data right so that is the and there are number of levels in between so again SPX levels 4500 call wall note there is a difference in price between ES and SPX and it's varying today between 8 and 9 so ES minus SPX is let's say around 8 to 8 and a half right now I use the round number 8 so I'm showing the SPX 4500 call wall at 4508 and here is the so let me mark the key level so there's the SPX 4500 call wall here's the spy 4446 call wall note that level did drop lower yesterday pretty significantly from 446 from 460 to 446 today so again I would normally interpret that as bearish and other levels in between upper daily and weekly expected move there so the range again the spy 442 volatility trigger and the right now it looks like ES is just right around the ES 4500 level and you know the SPX 4500 level definitely in sight for today right so those are the levels for for SPX spy on the ES chart and again shifts and levels volatility triggers shifted higher for SPX and spy call wall shifted lower all right let's take a look at NASDAQ so here are the NQ futures and I'm gonna take a look at a at a couple of charts in think or swim here just to get a picture of what's going on today so first of all this is QQQ and just like spy the volatility trigger for QQQ at 366 acted a support right around 8 30 a.m. Eastern time and then price accelerated higher at the 930 cash open and again at the at the 10 a.m. data so that is the volatility trigger for QQQ that did move higher from yesterday and then the next level is 370 that's the call wall for QQQ so that is the level that's expected to act as resistance QQQ's pause briefly at that level and is trading now significantly higher than at 370 levels also the absolute gamma strike all right let's take a look at an NDX chart I know the reason I'm looking at all of these index products spy SPX QQQ and NDX options trades in these products are a key driver typically key driver of price action in the ES and then Q futures and also the gamma levels at these at these index products are where market makers are expected to react all right so let's take a look at one final chart NDX so this is a one-day one-minute chart for NDX and just to point out this 15,000 level I've talked about that the last few days has definitely been in play and now NDX has broken out well above that level note also an interesting move higher in the put wall for NDX up to 15,175 so from 12,500 yesterday to 15,175 actually above the call wall that happened last week that happened last Thursday and quickly moved back down to the 12,500 level so you know an odd move higher in the put wall for for NDX all right let's go take a look at at NQ take a look at the levels and play so again you can't see the label here but there's the the support at the QQQ 366 volatility trigger there's the upper daily expected move the 370 call wall and the upper weekly expected move just a brief pause at those levels so big move in NASDAQ those are the levels in play next level up is the QQQ 375 level all right shifts and levels again for QQQ the volatility trigger shifted higher also the put wall shifted higher and for NDX the put wall shifted higher all right let's take a look at some additional information I use in my positional analysis first of all gamma notional market makers position on the gamma curve at the beginning of the day was still negative for SPX spy and QQQ so this indicates that at the beginning of the day traders with long puts market makers are short puts and they have to trade with price to hedge their delta exposure I normally don't look at NDX it is just not significant compared to the other numbers so again gamma notional for SPX spy QQQ at the beginning of the day still negative but less negative than yesterday all right let's take a quick look at the Vana model we can see what this means in a graphical representation here I'm going to take a look at the spy Vana model so what this chart is showing is market makers delta notional delta exposure on the vertical axis price on the horizontal axis there are two curves on this chart the gray curve is showing how market makers delta notional changes with changes in price only remember market makers want to remain delta neutral so if their delta exposure increases they have to sell futures to hedge their delta exposure on the other hand if price decreases they can buy back their short futures the purple curve adds implied volatility to the equation showing how market makers delta notional changes with changes in price and applied volatility and that is the Vana effect Vana is a second order Greek all right let's take a look at so this is the this is the low 442 at 8 30 a.m. Mr. Time remember that is the volatility trigger for spy so that was low at 8 30 so this is showing that there was somewhat of a van a tailwind for price moving higher so right now spy is trading right around 448 so that is right around this level right here so right at the bottom of the curve so helping to fuel the route the rally higher today this this put Vana as implied volatility drops and price increases market makers delta notional decreases and they can buy back short futures so that was definitely helping to fuel the route rally this morning but that it looks like that Vana fuel put Vana fuel has been used used up so with the spy now trading again right at the bottom of this curve there is no more put Vana rally put Vana fuel according to this chart so as price increases from here that will be a slight headwind market makers delta notional will increase as price increases and they will have to start selling futures to hedge their delta exposure so we know also that spy is trading spy SPX QQQ and DX all trading above their volatility triggers and I would expect if this rally holds for today that this game notional would most likely shift positive for SPX and much less negative if not positive for a spy and QQQ right so I'm going to leave it there so that was the that's my positional analysis today looking at looking at the levels potential areas for market makers to react and also the gamma notional Vana rally and then that my job after that is really to figure out what is what's driving the market so let's take a look at one thing and this is a heat map of the SMB 500 and NASDAQ and when all these stocks are green like this large cap tech stocks semiconductors Tesla Amazon most everything read very green I'm sorry green indicating that these stocks are moving higher the index products SMB 500 NASDAQ are going to move higher so large cap tech driving price higher today let me take a look at one other thing alright so also bonds are moving higher today so yields are moving lower and that is certainly helping to drive large cap tech higher with I see the T and X here is is moving lower let's just take a look at one other thing here here's Vicks take a look at Vicks for today looks like may Vicks of me may have found a bottom so far around 14.45 take a look at the 10-year note also moving lower yields moving lower helping to drive large cap tech higher all right let me check for questions all right so Andrew asked how do we add the section where it says C levels to book map all right so what Andrew is asking about is this right here so this is my my cloud notes and I use an add-on that's available in the book map marketplace called price lines so I have added all the information I want to see in this CSV file I pointed to it and I have to update that information every day so I have update the all the levels that I want to show the spy levels SPX levels and those race the ES to spy ratio changes a little bit every day I have a script in thinkorswim that calculates that and then I also have in a watch list just the ES to SPX difference so I account for that in my spreadsheet here it is so this is all the information that I want to show here the spy levels SPX levels and the upper and lower weekly and daily expected moves so this is price lines not price levels price lines available in the book map marketplace and then the gamma levels but gamma levels come from spot gamma I like to see them in one column in my own cloud notes here so I do it manually and then I have also other other levels round number levels for spy and SPX right so Truman ask are the daily book map cloud CSV notes and the daily think script levels both from spot gamma the same data more or less I think there are so first of all let's go to thinkorswim zoom in on today so these levels here that's a spot gamma level those are available from spot gamma to spot gamma subscribers and spot gamma provides a think script every day and there's some manual intervention here I have to make a copy of the think script and then I'll go in and edit the think script with the new data so I'll just delete the think script the old think script I leave the name I edit I paste in the new think script updated apply that and then I get the new levels on my chart and these levels this upper daily and weekly expected move I do that manually so I just draw those on my SPX chart here every day so that is for that's thinkorswim takes a minute or two to update the chart and then again for spot gamma subscribers spot gamma provides cloud notes for book map but I I like to see my own levels just one column where I have spy levels so that spot gamma cloud notes just have SPX levels and I I want to see one column with SPX levels and spy levels and in the other levels I want to put in so Truman says book map has a link for the CSV could I just point my cloud notes URL box to that link yes so you can just open a new column make it cloud notes and then paste in the link for the spot gamma cloud notes and you have the spot gamma cloud notes again I want to see all the information in one column so I just have my own cloud notes all right Truman I hope that answers your question all right let's take a look at at some setups right now so I'm going to start with hero let me just show one thing this is from yesterday give me just a moment to find it all right this is from yesterday so this was an example of the hero signal again from yesterday so this chart is showing price for SPX with a white line the hero signal for all explorations with the purple line and this is a combined signal for SPX spy XSP and ES futures all into one combined signal showing options trades and market maker hedging activity so the purple line is all explorations the green line is zero DTE options that that expired at the end of the day yesterday and this is just pointing out and and spot gamma has pointed this out recently and their founders notes that this suppressing action with zero DTE options traders buying the dips and selling the rips tends to subdue volatility that will and if you recall yesterday both the SMB 500 and NASDAQ traded at a pretty narrow range it was about a two-point range for spy for the SPX for the SMB 500 trading in a two-point range for spy and a large part of that was due to this volatility suppressing action of zero DTE traders so you can see as price was moving up yesterday options traders were taking negative delta positions and then as price moved down they started taking positive delta positions and when price got to the same high again they started taking negative delta positions when the price got to the same low they started taking positive delta positions so selling rips and buying dips and tending to subdue volatility so that was yesterday so we'll take a look at today so again this is the hero signal hedging impact real-time options this is available to spot gamma subscribers this chart is showing again SPX price with a white line and this purple line is showing a combined signal for all expirations for SPX spy XSP and ES futures all under one combined signal options trades market maker hedging activity all right let's zoom in on this chart so today let's take a look at the next expiry which would be the zero DTE and that subduing action of options traders is still there but not as prevalent as yesterday and note the close correlation between zero DTE and the so the green line and the purple line showing all expirations very close correlation indicating that zero DTE trades are making up a large portion of the the total options volume today all right let's turn that off so generally I'm you know it looks like initially options traders were taking negative delta positions and then they got on board with the move higher right around 10 10 10 15 a.m. Eastern time and since then it's been up and down so if anything all of this has done this up and down action after about 1130 or so 1145 has slowed slowed price down all right so you know I guess the best you could say for this is the options trades market maker hedging activity hasn't had the volatility suppressing action that it did yesterday all right so let's take a look at book map now oh let's let me go back to hero again zoom in on this we'll take a look at calls and puts so what this is showing and this this helps to understand drivers of price action traders are buying calls that show by the rising orange line note the positive notional value there and they're also buying puts that was that behavior really went on till about 1030 buying puts and then this line has really leveled off since then so they're not as of 1030 really not buying or selling puts that hero line is leveled off that number is negative negative notional value indicating traders buying puts so it looks like from an options point of view that call buyers have really been driving price today and note they were buying calls from the open that has continued higher better to somewhat slower pace right so when we slice and dice this hero signal it gives us a better better understanding of what's driving price today all right so let's go take a look at book map again the 442 volatility trigger acting as support move higher at the cash open 938 I'm Eastern time then another boost with the data that came out at 10 a.m. we'll zoom in a little bit so what looking at order flow here what has been driving price you can just see all the green dots here green volume dots these volume dots are showing aggressive buyers market buy minus sell this is what drives price higher market market orders moving price higher again volume dots showing the delta of buy minus sell green dot indicates more buyers than sellers that's also shown by the rising cumulative volume delta line that line that changes from pink to dark blue and then the rising yellow line is showing buy stop orders helping to fuel the move higher and those are also shown by this on-chart indicator here these small green dots are showing buy stop orders helping to fuel the move higher zoom in on this a bit more so after this push higher that begin around 11 a.m. note the liquidity coming in this the heat map is showing a history of the limit orders the passive limit orders in the order book and note all the buyers coming in so first of all they came in as price move lower just above the upper weekly and daily expected moves coming in again at 11 30 to 12 right around 44 88 coming in again and then the sell orders start to come in at 4500 so their buyers around 44 90 and right now sellers in the order book just above 4500 and note some large iceberg orders coming in these are what large traders use to hide their size that shown by the light blue line in the sub chart that number right there that's 4551 contracts executed in six different transactions that's a large large set of iceberg orders large traders in their selling at that 4500 level right so obviously the setup today was just to find any way to get long you know look at it any pullback find it find a way to get long all right let's take a look at NASDAQ now pretty similar story again the move higher at the QQQ 366 volatility trigger 8 30 a.m. Eastern time buyers rush in at the cash open and then the move higher at the 10 a.m. data water flow pretty similar drivers we just tone down the tone down the heat map here a little bit make this price action a little bit easier to see all right so pretty similar to yes B 500 aggressive buyers do it all the green volume dots there mark it by minus market sell green dot they're more buyers than sellers shown by the rising cumulative volume Delta that's the pink to dark blue line also the rising yellow line showing buy stop orders helping to fuel the move higher note the the numbers going to be a lot smaller than the SB 500 526 for buy stop orders that's pretty significant though for the NASDAQ more buy stop orders fueling the move higher and large traders have been selling this with iceberg orders so far they're they're not getting the way maybe slowing price down a little bit so let's see what options traders are doing so let's go to NASDAQ right Truman I'm not sure I understand your question he asked do do I use stops and if so what is your calculation for the amount of stop so do I use stops personally or are you talking about do I look at stops as part of my let's say confluence or confirmation for a trade and the answer to both questions is yes and my own personal stop is I guess beyond the beyond what I want to talk about on this webinar I'm talking about a bigger picture and you know that your stop that you use may depend on the size you trade the size of your account your risk tolerance so but yes I you know when I trade futures or shares of stock I do use stop orders when I trade options when I buy or sell when I buy put or a call I do not use stops that's the beauty of using options it's a divine risk trade the stop is already built in alright so let's say I bought a call today I would not have used to stop there's no no need for it again it's divine risk if I bought bought a futures contract then well so Truman yeah that happens sometimes Truman says just asking because he got stopped out on Nvidia went and had a lot to go so stock generally I may use a stop of a dollar or two depending on the size I'm trading and depending on the stock as well so if I'm trading Apple I'm not gonna I'm trading Apple versus Nvidia Tesla in video I'm gonna trade smaller Tesla's trade smaller with a wider stop and for Apple or AMD or Amazon lower price stock that doesn't have the the range of movement compared to Nvidia or Tesla I'll trade larger size with with a tire stop same for spire QQQ I'll use larger size and tighter stop so again a way to avoid that all together is just to buy a call or buy a put and not worry about having a stop alright let's take a look at NASDAQ so NASDAQ this is a combined signal for NDX and QQQ let's see what options traders are doing I'm gonna separate out puts and calls so pretty similar to the SV 500 traders are buying calls shown by the rising orange line positive notional value they're also buying puts shown by the falling blue line and the negative notional value there so call buyers really more aggressive today the call buyers notional values 922 million positive versus minus 457 for puts so call buyers more aggressive definitely helping to drive price higher today when traders buy calls market makers sell the calls and they have to buy stock or in this case futures to hedge their delta exposure all right so that's NASDAQ and for both the SMB 500 and NASDAQ the options trades especially looking at calls versus puts definitely provided a confirmation or a confluence helping us to understand what was moving price higher stocks some stocks were definitely easier to read so let's take a look at some stocks now I'm gonna start with Nvidia and if you recall yesterday Nvidia had a quick drop down about a 10-point drop that was good very good for short and then around 10 a.m. Nvidia began to rally as options traders started taking positive delta positions so I'm gonna zoom way in on this just to show what I saw early in the morning so right around 940 941 942 options traders started taking positive delta positions and price responded so very strong correlation confirmation between options trades market maker hedging activity and price action and video let's go take a look at book map so here's Nvidia one of the key drivers of price action in the NASDAQ and SMB 500 today especially NASDAQ I'm gonna zoom in just about the first 90 minutes here so notice the order flow was pretty bullish right from the start you could see the shift in volume dots here a few few market buy order sell orders so some aggressive sellers down around the 465 level and then the aggressive buyers start to come in as options traders started taking positive delta positions they were buying calls and selling puts we'll go back and take a look at that in in just a minute so shift in order flow here pretty easy read just go along at 465 there that was a fantastic entry and one thing to point out is right around 940 oops I shouldn't have done that we zoom back in sorry about that so right around 948 a.m. I've got that highlighted here right around 948 there was an alert in in hero let's go back and take a look at so for some reason the alerts are just a little bit the graphical point of alert is not shown on my hero chart here in in Windows but it is on my in Chrome on my Mac so I'm using Chrome on Windows Chrome on my Mac not shown here but there was an alert that came in right around 948 so it was a hero alert one of these hero flow alerts it was a green one I assume that's bullish these are new first time they were in they were available maybe six weeks ago but I think they were only available to a few users beta users I was one in that group and then I know spot gammas continued to work on these so that alert was right around 948 that was a bullish alert at first I thought it was too late but you know looking in retrospect now it was pretty timely and that's not so the alert came in right around here and that was definitely a good alert bullish alert let's go back take a look at book map so it looks like now Nvidia has stalled around the 490 level huge move from 465 up to 490 right Truman says there's a beta with large options trades that may be what I have I guess so so I'm part of the beta group yeah I have not watched the he's Truman is talking about the subscriber Q&A I don't have time to watch that live it starts typically starts at 1 a 1 p.m. just a half an hour before my session starts and then I just have to wait for the recording to watch it so I'll maybe the recording will be available this evening and I'll watch it all right so anyway valuable alerts so Truman I assume you're not seeing the alerts all right so anyway very bullish day in Nvidia let's go back the hero so note that as this hero signal has leveled off so is price separate outputs and calls so today traders have been buying calls shown by the rising orange line and also buying selling puts shown by the rising blue line and the positive notional value there right so that's Nvidia I thought that was the stock trade of the day just like the last few days very very easy read both in hedging flow and order flow looks like my time is almost up so there were you know we could take a look at any number of stocks all all large cap tech stocks not clear not as clear for meta here but still bullish hedging flow bullish order flow Microsoft also bullish but not as clear as as Nvidia let's take a look at Tesla call buyers also put buyers all right let's check on the SB 500 and Nasdaq now SB 500 right traders still buying calls also buying puts these numbers are have been much higher I've seen the call number up to six billion it's at just under two billion now I think I've seen that call number up around six billion very high number so this is you know could go much higher let's go take a look at we'll take a look at Nasdaq real quick and then we'll take a look at book map so this call line has leveled off again traders buying calls buying puts call buyers in charge call line is leveled off for both the SMB 500 and somewhat for Nasdaq and SB SMB 500 let's go take a look at book map go back to the SB 500 right so so far SB X somewhat trapped between the buyers here around between 44 87 44 90 and then the sellers right around 4500 now looks like moving their orders up just a little bit to 4502 4503 again large traders selling with iceberg orders assume by the following light blue line large iceberg orders 4500 1300 so progress higher so far so stalled the price continues higher next target up at the 4500 call wall and then the 4510 liquidity just just above that right so kind of kind of tech ask how do I anticipate if my level like a volatility trigger or expected value would work as resistance or support so generally I assume that if a level is tested from above so price moves down to a level I assume but don't don't act on it immediately I assume that level will act as support and then I'm watching order flow to confirm that so that doesn't mean I put a buy order there necessarily I'm assuming that that level will act as support if tested from above and then the for example the call wall here at 4500 I assume that will act as resistance that is the put wall and the call wall are typically put wall support call wall resistance so my assumption is if put wall or volatility trigger tested from above it'll act to support and then of course the call wall if tested from below so price moves up to that level I assume that will act as resistance and spot gamma has stats that show that that is the case for put walls and call walls support and resistance but then I almost always watching order flow and price action to confirm that one last look at NASDAQ so we know call buyers have taken their foot off the gas and prices stalled right around the 15,400 level all right my time is up I want to thank everyone for watching thank you very much for your questions and comments and I will see you tomorrow thanks again