 Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 pm Eastern Time. And before I get started, I need to go through the Disclosures. General Disclosure, all Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. General Disclosure, trading futures, equities, and options involve 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 in Discord is Options, Order Flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading, and the first is planning, and I use positional analysis. And I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as a directional bias. And the second step in my process is execution. And I look at real-time order flow in Bookmap and real-time market maker hedging flow on SpotGamma Hero to confirm my thesis and for setups, for entries and exits. And just to point out, this is a new way of looking at the market for me and for many probably. People are familiar with technical analysis or fundamental analysis. And again, this is a new way of looking at the market using options, the options market really to help you develop a thesis and to guide your trades. Again, it's a new way of looking at the market, and I think it provides a significant edge. And on topic, questions and comments are welcome. And I will be watching the Discord chat, option stash, Doug chat, as well as the chat and YouTube for your questions and comments. So again, please feel free to post on topic questions and comments. All right, let's get started. Just to point out, these little widgets here are part of the Bookmap market pulse add-on, and I've been using this for a while. I normally don't keep these up during my webinar. I will try and see if it's, if somebody finds it too distracting, I'll go ahead and close these or if they get in the way or whatever. So we'll, you know, I'll keep those open unless they get in the way or somebody feels like they're distracted. Okay, so what I want to talk about today is first of all, we'll go over the news for the week, economic data and events. Then we'll go through our positional analysis, and then finally, we'll look at some setups. Okay, so first of all, the news for the week. And they're just a couple of major items, and they are major. First of all, Jerome Powell, Vege here, Powell testifies, I believe this is a semiannual testimony before the Congress. So here at 10 a.m. on the 7th, tomorrow, let me just go up so you can see this. So that's tomorrow, the 7th. And then again on the 8th, Wednesday the 8th, again at 10 a.m., Jerome Powell testifies. And then finally on Friday at 8.30 a.m. Eastern time is the unemployment, the employment situation report. All right, so three major events this week. Something to keep in mind, and that should, will certainly affect how the markets trade and react after the data as well as potentially how traders are positioned going into those events. All right, let's take a look at our positional analysis now. And this is my pre-market planning. And let's start with a, so that's book map. This is a book map chart, the S&P 500 futures. And we'll dig into this chart in a little bit more detail in just a moment. But let's start with a larger time frame. And this is SPX showing just price and key spot gamma levels. And these spot gamma levels are provided to spot gamma subscribers. And they mark the key gamma levels, the levels of high gamma. And we'll look at these, the gamma level charts in a few minutes and see where these levels come from. So the main key levels that are in play for today, first the put wall. And I'll talk more about what these levels are, what they mean. Here's the volatility trigger. And then 4,000 is the key gamma strike as it has been for some time. And then finally, up here, 4,200 is the call wall. And that has also been in place for some time. So those are the levels that are in play for the, yeah, I guess next few days, next, you know, for this week. And then we can take a closer look at a, so this is a 20 day one hour chart. And let's take a look at a one day, one minute chart again in thinkorswim just showing a simple chart of price and spot gamma levels that are in play for today. And this is the 4050 level here, and that is a combo that's an L2 level. And that means the level of gamma is, the significance is one being the highest, five being the lowest. So this is a fairly significant level of gamma, the 4050 level, that's SPX 4050. And that level has been in play for quite some time. There's the combo L5 level today, 4066. And then these are two levels that were noted as resistance in the spot gamma AM Founders note, the 4060 level and the 4070 level. Okay, so those are the levels that are in play. And again, these are just simple charts that are showing SPX and the key gamma levels that are in play for today and price. Now let's go to book map and we'll add in order flow to the view here. And I'm showing spot gamma levels on this chart as well. So I have two columns of notes with levels. First of all, this is the spot gamma cloud notes. And these are provided to spot gamma subscribers just like the thinkorswim charts, except these are in cloud notes. They're updated automatically as opposed to the thinkorswim think scripts, which you have to update manually. Okay, so the levels are in play and we can see the 4050 level. And then there's that combo L5 level. And note I have marked those levels one point down. This is my cloud notes, the C levels column. And here I'm showing that 4070 resistance and the 4060 resistance. And the reason for the slight difference is spot gamma is using a five point difference between ES and SPX. And I just did a quick calculation today and saw that the difference was closer to about four points. So I'm showing this 4070 level, for example, at ES 4074. And those levels have definitely been in play. You can see the 4060 level here acted as resistance pre-market, then a level of consolidation and breakout. And now price is heading lower back down to the 4050 level. And one other thing I'm showing on these charts are the big round numbers for ES. And there are no spy key spy levels that are in play today. But if they were, they would be on this chart. I show like the spy volatility trigger put wall call wall and key gamma strike. But they're not not in play on this chart, any of those levels. All right, so that is, again, the levels that are in play for today, the 4050, basically the 4050, 4060 and 4070. Again, SPX levels. All right, let's talk about shifts and levels. And first of all, the primary shifts and levels were the volatility trigger and zero gamma levels for SPX, spy, NDX and QQQ. Both those levels, volatility trigger and zero gamma level shifted higher. The volatility trigger is spot gamma's proprietary gamma flip level. And that means that below that level, market traders are long puts, market makers are short puts, and their position on the gamma curve is negative. And then above that level, it's just the opposite. Traders are short calls, market makers are long calls, and their position on the gamma curve is positive. And in a positive gamma environment, they have to hedge against price. And that tends to reduce volatility. And in a negative gamma environment, they have to hedge with price. And that tends to increase volatility in a negative gamma environment. Okay, so that's the volatility trigger and zero gamma is just exactly what it says. So again, all these levels have shifted higher for SPX. Volatility trigger shifted from 3975 on Friday to 4020 today. Spy shifted higher from 398 to 403. And then QQQ shifted higher from 294 to 300. And then there were a couple of other significant shifts higher for spy. The call wall shifted higher from 402 to 408. And then the QQQ key gamma strike shifted higher from 290 to 300. Okay, let's take a look at the gamma charts now and we'll see where these levels come from. So these are absolute gamma levels for SPX and we'll look at spy in just a moment. And this is showing, here's the zero line, this horizontal line is the zero. And this is showing positive gamma or call gamma above the zero line shown by the black bars. And put gamma or negative gamma below the zero line that's shown with the teal bars. And it's pretty clear that the 4000 level is the level of highest absolute gamma. That's the key gamma strike. And that can act as support resistance and a magnet as well for price. And then the 3900 level is the put wall. And that's the strike with the largest net negative gamma. And that can act as support. And a reason for that, a couple of reasons traders may take, at that level, may take profits on their puts. And market makers may need to re-hedge to change their hedging position. And then 4200 is the call wall. That's the strike with the largest net positive gamma. And that can be expected to act as resistance. So that's where those levels come from. And note the predominance of put gamma below that level, the 4000 level, and the predominance of call gamma, positive gamma above that level. OK, that's SBX. Let's take a look at SPI. And for SPI, 400 is the key gamma strike or the absolute gamma strike. And 390 is the put wall. Strike with the largest net negative gamma. And the 400, 408 level is now the call wall. And again, that shifted up from 402 on Friday to 408 today. And that is a bullish signal. All right, while we're on this screen, let's take a look at these combo strikes. And this is combining SPI and SPX strikes into one combined level. And then shown in terms of SPX. And it's very clear to note at about this level the dominance of call gamma above that level and put gamma below that level, positive gamma above, negative gamma below. And let's just see what that level is. So that's around 4021, 4025. And it just so happens that is the volatility trigger at 4020 around that level. And then the zero gamma level at 4027. And another thing that I like to take a look at on this screen is the open interest and volume adjustments. And this is showing volume traded in the black bars and open interest in the teal bars. And the volume, well, first of all, the volume traded includes all options at that strike. And this shows the predominance of the 4,000 level. This is for SPX. This is put data. And the anything open interest would be trades that are held at least overnight, longer term than zero DTE. And so this is showing a couple of things. Again, the predominance of the 4,000 strike for puts, predominance of the 4050 level for calls. And then also notice these teal bars. There is some build and open interest and calls above the 4050 level. And then this open interest for put shows the build and interest in puts below the 4050 level. And you can see that with the teal bars. So that's, again, I'm focused on how traders and market makers are positioning themselves in the options market and how that is changing from day to day to develop a thesis for the day. And now let's take a look at NASDAQ. And for NASDAQ, we'll just look at QQQ, NDX. The options market at NDX is not significant. So for QQQ, the key gamma strike is 300, the strike with the largest absolute gamma. And again, remember that shifted up from 290 on Friday to 300 today. And then 290 remains the put wall, the strike with the largest negative gamma. And there's 310, the call wall. Let's take a look at data now. Let's move these down so we can see exactly what we're looking at. So I'm looking at gamma notional here. And this is market makers position on the gamma curve. And note the, I'm looking at the sign, whether it's positive or negative, and the shift from the prior day. So SPX is shown to the left column, spy in the middle column, and QQQ on the right column. And all of these numbers have shifted either to positive for SPX or less negative for spy and QQQ. And again, this is showing market makers position on the gamma curve. For SPX, this is just mildly positive, indicating that market makers position according to SPX here is in the positive gamma environment, meaning they will need to hedge against price to hedge their delta exposure. And this is really neutral at 37. And then so for last Friday, the gamma notional for SPX was minus 310. So it has shifted to positive. And then for spy, the gamma notional on Friday was minus 1994. And today, it has shifted less negative to minus 1364. And for QQQ on Friday, gamma notional was minus 682. And it has shifted to minus 437 today. OK, so Archer Bowman asked in YouTube, why not just use VIX and SKU? I do look at VIX. I look at SKU also. But SKU only changes once a day. So it's not really that helpful. I look at SKU for positioning longer term trades. VIX, yes, I do look at. But I'm looking for an edge here. And everybody can look at VIX. And not everybody looks at this information. And again, this is showing how market makers are positioned on the gamma curve. And I talk about this every day. This can have a large impact on how traders and market makers react, especially at certain events, either announced like a CPI report or an FOMC announcement or like last week with the comments of Atlanta Fed President Bostick that seemed to spark a rally higher and gamma notional for SPX and especially SPI was quite negative at that point. And that helped to fuel a put-vanna rally as implied volatility dropped and price increased. Knowing this market makers position on the gamma curve was quite negative. That gave you confidence that that was helping to fuel the rally higher. So again, I'm looking for an edge. That's why I look at this. OK, so that is gamma notional. And we see that it has become either positive or less negative for all these indices. And now let's take a look at the Vanna charts. And this will be a graphical illustration of what I was just talking about. So here's SPX. And this is showing market makers delta exposure delta notional on the vertical axis and the strike price on the horizontal axis. And remember for SPX, the gamma notional was 37, which is essentially neutral. And what this is showing is that market makers will have some minor hedging to do as price moves up and down. Their delta notional is not going to change a lot. And this green curve shows how their delta notional changes with changes in strike price and changes in applied volatility. And that's the Vanna effect, the change in delta with the change in applied volatility. And let's just look and see how that has changed over the last few days. So here's Friday. And you can see that market makers delta notional has become less negative from Thursday to Friday to today, basically neutral. And we can take a look at SPI. And here it's still negative, indicating in this case that market makers will need to sell futures to hedge their delta exposure as price decreases. And as price increases, they can buy back their short hedges. And we can also see how that has changed from the last couple of days, just becoming less steep. And then finally, here's QQQ. So that shows the difference between negative gamma notional for SPI and QQQ and then the neutral reading for SPX. And one other thing that I want to take a look at, this is my key gamma strike list. And this is just one point of data, one point of reference that I look at for the stocks on my watch list. So this is one point of reference that I look at for the stocks on my watch list. And this is the number that I choose to track. But if any stock here on this list attracts your attention, it's worth digging into Equity Hub and see how the other levels have changed as well. What this is showing is the key gamma strike for, sorry about that, this is showing the key gamma strike for the previous day. So this is from last Friday, shown in the far right column. And then the current key gamma strike is shown to the D column. And that's for today. And what I do is compare the number from the previous day to the current day and color code these. So green indicates that the current key gamma strike increased from the previous day. And that is a bullish signal that traders are accepting higher prices and they're positioning themselves in the options market for higher prices and building open interest at those higher levels. All right, so given all that, my thesis for the day was bullish. You're looking for this trend that began last week to continue. And again, this is until something changes. Bruce talks about that all the time. And now it looks like potentially this 40, 70, 40, 75 level may have become a short term resistance. Who knows? Again, there's a lot of key events coming up this week. So anyway, that was my thesis for the day. And then I look at this. So I would look for just based on this and pre-market planning, look for potentially bullish setup in Apple and QQQ and Amazon. All right, so let's take a look at some setups now. And let's start with the S&P 500. And I'm going to have to get rid of these. They're just going to be in the way. But I did use that this morning when I was trading. It was helpful. I'm going to zoom in. And I usually, I primarily trade in the morning session. That's obviously busy right now. So this is what I look at. And I was watching that market pulse right around here, 950, something like that, that market pulse started clicking pretty loudly. I could see the green bar was a lot higher than the red bar. I saw the green dots coming in here. And then I'm going to go to hero. So that's the order flow. Looking bullish, small ice buy here. But generally, the icebergs are negative here. And let's go take a look at hero now. And this is the spot gamma hero, hedging impact of real-time options. And this is showing options trades and the corresponding market maker hedging flow. This is what I was looking at this morning. So I'm going to, this is first of all, the combined signal for SPX and SPY. And this is showing options trades, again, in SPX and SPY, calls and puts, into one combined signal. So if you trade ES, this is what you want to take a look at. I'm going to zoom in on this chart. And this is the morning session looking up until about 10, 15, 10, 15, 10, 20. And this is what I saw. It's first of all this, I guess somewhat of a divergence here. Definitely a confirmation. Hero moving higher. And then the price dipped down. And the bullish order flow came in. We just saw that on the ES chart. And then price moved higher. So that's the setup that I saw this morning. There were a number of confirmations. Again, that market pulse was a new one for me, watching that and using that as a confirmation or a confluence for the trade, as well as hero. And then let's go back and look at book map again. And the shift in order flow from pink dots, that quick drop down, then the shift in order flow to green dots. And price targets, several price targets above. And just for a short scalp at the 4060 level, and then the 4066 level, and then finally the 4070 level. And the cumulative volume delta shows that shift from a more bearish or neutral order flow to bullish. Again, all the green dots coming in there. And then the stop order shown by this yellow line. So CVD, cumulative volume delta is the dark blue line. And stop orders by stop orders, helping to feel them move higher, are shown by the yellow line. And also this on-chart indicator here. It's kind of obscured. That's 700 by stop orders. That green dot, 983, 711. So all that helps to fuel the move higher. And that is really somewhat of a hero kickoff, is a strategy, a term that I came up with, that options trades seem to initiate the move higher, or help to initiate the move higher. And then other players take the field, like the aggressive buyers here with the green dots, the market buy orders, as well as the buy stop orders. And this negative light blue line, those are sell iceberg orders. That's pretty typical, with larger traders will sell strength and buy weakness with their iceberg orders. Sometimes it has a direct influence on price, and sometimes it takes a while. All right, so that was the setup in the S&P 500 that I saw this morning. And let's go take a look now at the full chart. So that was the morning. And then let's go again, we'll take a look at hero and see that that quickly turned somewhat bearish, with hero ticking down. And then price finally falls sometime later. Now it looks like traders are taking positive delta positions again. All right, so that's the S&P 500. And let's take a look at some other setups. So here's Apple. And I'm going to zoom in on the morning session here. And actually, I'm probably going to have to do that again. All right, so I'm separating output and call transactions here. And notice that traders were buying calls. And this is from the open. And then they stopped buying calls, but price moves lower and just does pull back and then continues to move higher. Let's take a look at the total signal. All right, so not the most clear signal in hero, but definitely bullish in the morning, positive delta. Let's go take a look. And remember that the key gamma strike increased from the previous day. So that was one of the stocks in the watch list that you might, in the my watch list, that you might want to concentrate on. And there are a couple of other interesting things here. First of all, note the shift to the positive order flow. So I'm looking at, I have two screens. I'm looking at hero on one screen and book map on the other screen and interpreting what I see in hedging flow and in order flow. And order flow was definitely bullish here. Note the shift, the green dots coming in, market buy orders, price targets at the 155 call wall and the 156 liquidity level. Now, the interesting thing about this call wall is this is something that Spot Gamma talked about. They host a subscriber Q&A session every week. And last week, Brent Kuchuba, the founder of Spot Gamma, talked about the differences in call walls between indices, SPX and SPY, versus single stocks. And there is something to look for is the reaction at the call wall for single stocks. And a breach of a call wall in a single stock can actually be an accelerant. And those calls at that level and the 150 key gamma strike in this example for SPY, they go in the money. And those, and market makers have to continue to hedge their delta exposure since those calls are, so traders buying calls, market makers are selling calls. And as those calls go further in the money, market makers are losing more money becoming, they're becoming, whether delta notional is changing. So they want to remain delta neutral. So they have to hedge their delta exposure by buying futures. So they're becoming more negative delta and they have to buy stock to hedge their delta exposure. And let's just take a look at Equity Hub. And we'll see, get a closer idea of what I'm looking at. So this is over here, whoops. All right, so this is what happened this morning. This is the, this is Apple in Equity Hub. And showing call gamma in the orange bars above. And remember for single stocks, SPOT gamma assumes that traders are long calls and or long puts. So market makers position for single stocks is always negative gamma. So they are short stocks and short puts. So always negative gamma. So again, as price increases above this 150 key gamma strike and notice all the call gamma there and all the call gamma, the orange bar at 155, as price goes above that level, those levels, those calls become deeper in the money. And as price increases, market makers may have to continue to buy stock to hedge their negative delta exposure. Okay, so that's just something to keep in mind. And last Friday, I showed two really good examples of bullish trades in Tesla and Meta. And Meta, for example, was an instance of this. The 180 call wall, a breach of the 180 call wall acted as an accelerant for Meta. And I can't remember how high Meta went, but it was substantially higher. And that was a great setup of using that breach of a call wall as a potential entry point. And one other thing to point out that now, spot gamma is providing these alerts. And here's the notice about the Apple call wall breach at 942. And I think that may, well, let's go take a look at the book map chart. I think that may be an initial breach. So let's go back to book map. Yeah, that's this breach right here. So in this case, the call wall initially acted as resistance. Aggressive buyers came in around the 153.50 level and move price higher up to the 155 and the 156 level. Okay, so just something new to keep in mind and something new to watch for. All right, let's take a look at a couple of others here. First of all, let's look at Google. So very strong trend and Google was knocked down, I guess, I don't know, a couple of weeks ago with the news about Microsoft incorporating chat GPT into their Bing search product. And anyway, that had a negative impact on Google. And finally, Google has caught a bid now. So let's take a look at Hero. Let's go to Hero. We'll take a look at Google. And Karma Trades asked, does the same effect happen with put walls? No, I don't think so. This is something that I need to study more, but I don't think that is the case. You know, it could be, but I know that Brent specifically mentioned the call wall. But I guess you could, you know, it could potentially happen. I think, now this is different for single stocks versus indices. So for an index I would look at and also Spot Gamma publishes on the website. I'm not sure if it's available for everyone or available just for subscribers, but option wall stats. And probably that's available for everyone if you go into their free resources and search for that. But that is applies generally or I think that are stats or just for the S&P 500. But I would look at for the index, I would definitely look at a put wall as support and a call wall as resistance. And some stocks respect those levels better than others. As an example of a stock that does not Netflix. Not as pretty thinly traded, moves around quite a bit. And, you know, from my experience does not have much respect for levels. Whereas a very heavily traded, very liquid stock with a large options market like Apple will typically have more respect for the levels. So here's Google. Zoom in on the morning session and you can see the strong correlation between hedging flow and price action. Zoom in on the morning and you can see that traders are aggressively buying calls right at the open and they continue to buy calls. And this drives, this is driving price higher. Again, traders are buying calls, market makers are selling calls and they have to buy stock to hedge their Delta exposure. All right, so there's Google. Let's go take a look at book map again and nice strong uptrend in the morning. And there's the breach of the 95 key gamma strike. That was the first target from the open. Couple of pullbacks to VWAP. I'll use this tool. So a couple of pullbacks to VWAP and you saw that strong orange line in the morning and that was a signal definitely to look for a long entry in Google and first target at the 95 key gamma strike and second target at the 96 and notice the liquidity up there at 95, 96, 95, 95 and a half and 96. Let's go back and take a look at the hero again. Look at the total signal and notice how price has stopped the uptrend, shifted slightly bearish, shifted down a bit as hero shut off and traders started taking negative Delta positions. And so for the day so far, this notional value is now negative but definitely bullish in the morning and was a great, great long set up. And let's take a look at Meta now. And for Meta, there's a very strong correlation between hedging flow and price action. Let's go take a look at book map and there's a short set up, long set up and short, no gamma levels that are in play for today. Let's go back and take a look at the hero. I'm gonna zoom actually. Before I do that, let me change to puts and calls. Don't have to zoom twice and so what I saw in this morning and this is somewhat of a divergence here is that traders were buying calls, price drops, and then as they stop buying puts and continue buying calls, price moves higher, setting up that long. So this one a little bit more difficult to interpret but pretty clear when you separate out the puts and calls. All right, let's take a look at Tesla now. And with Tesla there is almost always a very strong correlation between options trades, hedging flow and price action and confirmation long and short, short, long, short again. All right, let's go take a look at book map. While we're looking at this, I'm going to pop up that market puts again for Tesla and notice this is available for stocks and this is showing volume pressure and this is a little cluttered, especially in the zoomed out view. So I'm gonna turn this off and notice overall the order flow has been bearish. This falling cumulative volume delta and let's go see what options traders are doing right now. So really it looks like when the last hour, hour and a half that calls have really been driving price action, let's shift that back to the total signal but definitely overall negative delta bearish. All right, I've got a couple minutes left. Let's take a look at a couple of other stocks. Get rid of that, look at AMD. And I would really, I was just zooming in on this on the morning, but this is definitely a divergent short. Let's take a look at book map and this is definitely confirmed by order flow. Look at the shift from green dots to pink dots, consolidation right around the 83 level and then pink dots coming in price continues to move lower. So CVD bullish until about 1045, then the shift lower. Let's go back and take a look at hero and definitely a divergent short. Trader started taking negative delta positions just around 945 and then price finally started move lower about 11 o'clock, 11 a.m. When order flow, when it was confirmed by order flow. And let's take a look at Amazon and kind of the same thing, a confirmation long in the morning, then divergent short that takes some time to play out. Let's go back to book map. We'll take a look at Amazon. So this is very clear in order flow. That's the reason I use book map and hero combined. Keynote to volume delta is not as clear there. You can see the trend break, pink dots come in and price moves lower. Let's go back and take a look at hero and hedging flow was definitely, definitely bearish from about 1015, 1020. So when you see that, it's just a matter of watching book map, waiting patiently for your setup. And this is pretty unusual for a stock for it to take so long to develop. Let's go back to book map. And it finally did that break below 96. Target said the 95 key delta strike and the liquidity there as well as the 94. And that looks like typo there. That's most likely the hedge wall. Okay, let's just take one final look at the S&P 500 and see what's going on there. Okay, interesting, back down to the 40, 50 level and right around the opening print. Okay, that's all I have for today. I'll take one final look at hero for the S&P 500 and then we'll call it a day. So this is pretty typical of the S&P 500 that traders are fading the move with options. So as price increases, they're taking negative delta positions and then as price drops, they start taking positive delta positions. So this is trading as price heads down to that 40, 50 level. Traders are looking for that to act as support and they're taking positive delta positions. Okay, again, that's all I have for today. I wanna thank you for watching. Thanks for your questions and comments. And remember Powell testimony tomorrow at 10 a.m. as well as Wednesday. We'll see how the market reacts tomorrow afternoon. So thanks again, everyone. Thanks for your questions and comments. Thanks for watching and I will see you tomorrow.