 Hello JEC glad to see you here. Glad to see you live. Just waiting for YouTube to start up Hello everyone, welcome to options with Doug streaming live daily on the discord on bookmap discord And the bookmap YouTube channel at 1 30 p.m. Eastern time Before I get started. I need to go through the disclosures General disclosure all book map limited materials information and Presentations are for educational purposes only and should not be considered specific investment advice nor recommendations risk disclosure 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 The focus of my presentation and the focus of the options dash Doug chat channel in discord is options order flow the impact of options markets on stocks and order filled 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 are positioned in the options market and how those positions changed from day to day to develop a thesis regarding the expected trading range and Volatility for the day as well as a directional bias and the second step in my process is Execution and I like it real-time order flow in Bookmap and real-time market maker hedging flow and spot gamma hero to confirm my thesis and For setups for entries and exits and just to be clear when I talk about setups I Will be talking about setups in an underlying asset and That doesn't necessarily mean that that trade must be taken in shares You can take any one of these trades either futures or in the futures underlying ES or NQ or Shares of stock like Apple or Tesla with shares options or futures So my again my analysis is based on the options market And I'll talk about setups in an underlying asset, but they can be taken Any number of ways and that's up to you and questions and comments are welcome and I will be watching the discord chat Options dash Doug chat channel and discord as well as YouTube for your questions and comments So again, I welcome your questions and comments And it will make it more interesting interesting for me for sure and hopefully for everyone else if this is more interactive All right, let's get started So my agenda for today what I want to talk about Go over news items for the week Mainly economic data and earnings coming out. It's a big week for earnings. Then I'll go through my positional analysis And then finally talk about some setups So first of all news items for the week for today consumer confidence came out this morning and then Google and Microsoft Report after the market closes today. So big big earnings announcements after the market closes and then tomorrow Durable goods orders at 8 30 a.m. Eastern Time and then meta reports after the market closes And then on Thursday GDP comes out at 8 30 a.m. Eastern Time and then Amazon reports after the market closes And then finally on Friday the PCE comes out at 8 30 a.m. Eastern Time and Michigan consumer sentiment comes out at 10 a.m. Eastern Time all right, so that is the The primary earnings that I follow the stocks of my watch list the earnings coming out this week as well as the key economic data All right, let's take a look at charts now and I'll go through my positional analysis and This is the S&P 500 futures And before I Go into detail on this chart I Want to take a look at a larger time frame This is an SPX chart and this is a 20-day one-hour chart showing just price and key gamma levels as well as the Expected move range for the day shown above the light blue line here and then the Expected move for the week shown by the purple dashed lines so again, this is just showing price and Key levels let me point out a couple of these levels first of all this is the SPX put wall at 4,000 and that is the That's the strike with the largest net negative gamma that can be expected to act as support and That is also the absolute gamma strike or key gamma strike And that's the strike with the largest absolute gamma and then here is the Volatility trigger and the zero gamma level just about at the same level the 4115 for the volatility trigger and That is spot gamma's proprietary gamma flip level below that level Market makers position on the gamma curve is negative and they have to trade With price to hedge their delta exposure and that appears to be what is What's happening now SPX is below its volatility trigger so in this case Market makers position on the gamma curve is negative according to stop filled according to this gamma flip level and Above that level market makers position on the gamma curve is Positive and that means they have to trade against price to hedge their delta exposure and that tends to Subdue volatility so again right now SPX is trading below its volatility trigger and then the other primary key daily level is The call wall and that's at 4,200 up just right at the upper edge of the expected move for the week at 4,200 and that's the strike with the largest net positive gamma and that can be expected to act as resistance and Then there are some other levels on this chart and let's take a look at an SPX chart For the For the day here, so this is another thinkorswim chart. This is a One day one day one minute chart for SPX Showing a clear downtrend and note that SPX is trading below the lower edge Of its daily expected move and this is something that I said this morning. I forgot to set it last night so this was based on the opening price of SPX and The expected range for this morning, which was plus or minus 18 points So that was clearly wrong and this is the first first time since I've been really tracking this daily level that SPX and The NASDAQ have traded below SPX ES and NQ have both traded below their expected moves For the day and this is looks like it's it's a bringing in the first Trend day in quite a while a downtrend day all right, let me check for questions and So RJ I just indicated this for I'll show the lower the daily expected moves for ES and NQ in just a minute and for For SPX I I forgot to set it last night. So I shut I set it this morning So this is based on the range that was Expected at the open and this is based on my reference price at the opening price today so that's for SPX but again at ES and NQ were set on the Expected range and the closing prices yesterday alright, so notice here that the first of all this volatility trigger 4115 Initially acted as support briefly this morning then acted as resistance oops, that's the That's the zero gamma level at 4113 then the Volatility trigger at 4115 really the more important level acted as resistance and price Moved lower after that All right, let's take a look at bookbap now And I've got the same levels on this chart With the addition with the addition of some other levels So these are the spot gamma cloud notes shown in this column and There's the volatility trigger and the zero gamma level of volatility trigger at 4115 And I used it looks like spot gam is using a 22 point difference between ES and SPX so this is in terms of SPX converted to an equivalent ES number spot gamma issue is using a difference of 22 points I calculated it this morning at 21.25. So that's what I'm using so my Volatility trigger is just a little bit lower and this is showing also key spy levels and there's the spy volatility trigger at 411 and noted that acted as resistance right after the open And when I talk about setups we'll take a closer look at this and After testing that resistance the SMB 500 that's traded lower all day All right, so so some other levels Here's the 4100 level. This is the SPX 4100 level that was expected to act as support this morning and It did for a while and finally broke After just after 1 p.m. Eastern time And now the next level of support down below is the 4075 level. That's the SPX 4075 level and also the ES 4100 level and then finally it looks like the spy 407 level So far as acting as support So a lot of levels in play today for the ES All right, let's take a look at the NASDAQ now and for the NASDAQ Spot gamma is using a Looks like they're using the same point difference 22 points for NDX the difference between NQ and NDX The same point difference 22 point difference again for the NDX and then NQ and that's not right I calculated that difference at about 83 points. So spot gamma is showing The NDX levels here 13,000 and the call wall and the key gamma strike at 12975 and that is using a 22 point difference and that is not That's not right. The difference is About 83 points and that's what I'm using so I'm showing in my cloud notes columns here first of all key QQ QQ levels and that's the 315 key gamma strike that acted as resistance today and NQ is of course a lot more volatile than than ES. I wouldn't expect it to Touch levels exactly like ES does So also here, I'm showing the these are NDX levels. There's the 12,800 level and Then the 12,775 level and that is the volatility trigger for NDX and by the way the volatility trigger for QQ Q is at 318 So QQ Q is treating well below its volatility trigger for today All right, so those are the levels and play for the index indices that I follow the NQ and ES and then we'll talk about then we'll talk about setups In a few minutes All right, so take profit ask, how do you calculate the the lower edge the daily expected move and what I do is Take a you can take a reference price at the open or the close Which every one that you want and then just look at an options chain and for any instrument that has zero DTE options daily options like the ES SPX spy QQ Q all have an NQ all have options that expire every day So just look at an option options chain and it should give you a value of Plus or minus value So we can we'll take a look at SPX here So at the close today What I would do is take a look at the closing price and then just take a look at the options chain here So the top number is the number that's the for today's expiration This is for tomorrow's expiration. So right now it's showing that at plus or minus 34.4 points So take your reference price the close price today and whatever this number is at the close and add it and subtract it from that number to get the upper upper and lower edge of the expected move for the day and RJS is it possible to know what the two standard deviation move was for the SPX and Yeah, I'm sure you can calculate that that's not something that I Think about or look at All right. So those are the index products and let's talk about shifts and levels and there were very few first of all For spy There were no changes for SPX no changes for NDX and the only shift was the call wall for spy Moving higher from 415 to 420 and for QQQ the call will move lower from 330 to 320 So those are the only shifts in levels a very minor today All right, let's take a look at the key gamma level so we can understand Where those levels come from what they mean? So this is SPX showing absolute gamma and above the zero line The orange bars are showing positive gamma or call gamma And below the zero line the blue bars are showing negative gamma or put gamma and these are market makers Positions at these strikes. So this is SPX and this is the key gamma strike the strike with the largest absolute gamma and that is Pretty obvious and then the that's also the put wall The strike with the largest absolute negative gamma can be expected to act as support and then here is the call wall at 4200 The strike with the largest absolute positive gamma can be expected to act as Resistance, so there's the ceiling and the floor for SPX As it stands right now All right, let's take a look at spy. I'm going to zoom in on this chart And for spy The key gamma strike is at 412 that's the strike with the largest absolute gamma. That's pretty obvious And then the put wall At 400 again pretty obvious strike with the largest absolute negative gamma And then the call wall has moved up to 420. So there's the ceiling and the floor for For spy 400 and 420 pretty much in sync with the SPX All right, let's take a look at NDX. I may have to refresh. So let's go to NDX now No need to zoom in on this This is the 12 975 strike and that's the Absolute gamma strike. It's pretty obvious and it's also the call wall And then the put wall is not shown on this chart. It's at 11,000 And finally, let's take a look at QQQ. We'll zoom in on this chart And for QQQ 315 is the key gamma strike 320 is the call wall and then 310 is the put wall Whoops 310 there. All right. So that shows where all the levels come from for these NDX products Now let's take a look at Take a look at the Vana model for SPX and For those of you who've seen this before please bear with me. I don't know who If there's anybody new watching this but this is important What this is showing is how market makers delta notional this light gray curve Changes with changes in price. So there's delta notional shown on the vertical axis and price on the horizontal axis and what this is showing is When price increases Market makers delta notional will increase and they have to sell futures to hedge their delta exposure And that's typical on a positive gamma environment and remember now The SPX is trading below its volatility trigger Let me just check on the price of SPX So right now SPX is Down around 4080 All right. So again, this is showing just the gray line is just showing how delta notional changes Which changes in price and does not account for implied volatility, but the pink curve Does account for changes in implied volatility and that's the Vana effect the change in Delta with a change That's the change in Delta with a change in implied volatility and what this is showing as price Decreases and implied volatility increases Market makers have to sell futures to hedge their delta exposure Again as price drops implied volatility increases, which is what's happening today Market makers have to sell futures to hedge their delta exposure and that tends to Enhance volatility all right, so Always important to keep this in mind right now the the price for SPX is around 4080 right around where I'm Holding my cursor So definitely on this portion of the gamma curve Or the Vana model All right, let's take a look at Some data now going to focus on Two items here and this is at the beginning of the day This is market makers position on the gamma curve for SPX spy Ndx and QQQ And what this is showing all of these numbers this gamma notional These are all positive showing at the beginning the beginning of the day Market makers position on the gamma curve was positive again indicating that traders are short calls Market makers a long calls hence the positive gamma position and they have to sell against price to They have to trade against price to hedge their delta exposure and then also these Spot gamma gamma index Also is a proprietary number that shows pretty much the same information the only one that I watch is really this spot gamma gamma index for the SPX And this is positive indicating again positive gamma lower volatility environment and this works until it doesn't like a day today when when price break finally breaks below that lower edge the Daily expected move All right, so let's take a look at some Some setups now So first of all, let's go to the S&P 500 And I'm going to start with hero for the S&P 500 and This is a combined signal for SPX spy XSP, which is not significant and then ES futures So this is tracking options trades for all these instruments that shown with the purple purple line here and The wide is showing price so this is the S&P 500 and What this is showing is again options traders options trades and market maker hedging activity and It's a combined signal. Let's just take a look at the component So first of all notice that this is actually positive the delta notional This number here and I'll zoom in on this chart in just a minute is just over 1 billion positive 1 billion so traders are Trying to fade this move with options trades and we'll take a closer look and see what they're doing in in just a few minutes All right, so let's take a look at the individual components. Let's start with SPX And notice here that this is this is bearish minus 617 million that's the notional value and the Line for SPX is much more in sync with price So that indicates to me that this is what appears to be driving Price action as far as options go The trading in SPX and let's take a look at the next one, which is spy and that is what has What has appeared to be the case for for a while now that the spy traders are Trading in the opposite direction of price So as far as a signal for Trading the spy has not provided a good signal the spy hero signal and then finally here's the Yes futures and this is more in line as well in line with price in sync with price and So the total signal again SPX a little bit more difficult to read, but this is the total combined signal showing How options traders are positioning in the options market? Let's take a look at puts and calls So they're buying calls and buying puts this is pretty typical of a Of an index product and it looks like this notional value for calls is actually higher than So this is positive 2.4 billion Versus minus 1.6 billion so call buyers are dominating put buyers, but price action is Definitely bearish today. Let's take a look at zero DTE Providing this provides a very clear signal. This is what? Zero DTE options traders are doing today in the S&P 500 again this combined signal and this is net negative 484 million so if you're looking for a signal for trade setups, this is the What appears to be the best signal? Zero DTE Right, so let's leave this up And let's take a look at the S&P 500 So really looks like the there were a couple of setups. This was a This first setup Kind of a late confirmation and then this was the best setup of the day notice the Lower high and hero in price moves up Again hero making a lower high and then reverses that's at 1120. So let's go take a look at Bookmap down and there's the reversal at the Right at the lower edge the expected move today that Blue dash line and below VWAP and then also the spy 314 level Whoops, that's an Aztec. Sorry So here is the it's actually a little bit more clear In the S&P 500 here, here's this setup Reversal at the 4115 volatility trigger and I pointed that out before So this is what I'm talking about right here wrong tool and let me just turn off I'm going to turn off the heat map just to make this a little bit easier to see so there is a I know There's a large clot cluster of levels here But I think the key level is this 40 4115 volatility trigger and also VWAP and price reverses lower as Traders were taking negative delta positions the zero DTE S&P options traders and note the bearish order flow here that this light blue line is showing that Opts of that large traders were selling this move With their iceberg orders. They used to hide their size Then once price starts to move lower Sell stop orders shown by this yellow line here Start to fuel the move lower and then CVD is is negative That's shown by this pink line in the sub chart. All right, let's Let's zoom out. So as far as using an options options trades for Your setup and using hero. That was the best setup for the S&P 500 right there the reversal at the 4115 volatility trigger if you missed it at 10 Patiently wait until 1120 then there's your setup again All right, so that's a S&P 500 continues lower Now it looks like it's broken below the spy 407 level and Heading down to the next support level, which is the 4075 level all right, so that's the S&P 500 bearish order flow bearish hedging flow after 1120. Let's go back and take a look at at hero again zero DTE again makes makes a lower Lower high there and price begins to move lower and Zero DTE options trades are Looking like they're helping to drive price lower. All right, let's take a look at The NASDAQ now so that's the total signal all expirations and really in sync after After about 1120 as well All right for the NASDAQ We'll take a look at QQQ at least in the morning it was in sync with price action Setting up shorts here at 945 That's the just below the 315 key gamma strike the resistance there It's shown here Then hero can price continues to move with hero Oh up until about 1030 Let's zoom out So the signal is not as clear really after After about 1230 this large spike. That's a large block order All right, and JC said something about a spike on QQQ it at 1007 What time zone? All right, so it looks like that that's what he's referring to It's right here So let's take a look and see what exactly what that was So it looks like traders continue to buy puts and that looks like Probably a pretty large order selling calls So just just like we saw on SPX traders are buying puts shown by this falling blue line They're buying calls and so far the call buyers are not having much influence on price It looks like the put buyers along with with order flow are helping to drive price lower All right, so that's QQQ and let's go take a look at the NASDAQ now All right, let's take a look at NASDAQ and in a strong downtrend And there's the reversal at 315 At the 315 QQQ key gamma strike price continues below the volatility trigger and there's the the move up Similar to ES at about 1120 and then price continues lower from there and notice in this case that both CVD is falling and Sell stop orders are fueling the move lower and then Larger traders are actually fading this move that's shown by the rising light blue line That's showing that large traders are Buying on the way down with their iceberg orders. They used to hide their size All right, so it looks like price may be heading down to the QQQ put wall at 310 all right, let's take a look at the Let's just take a look at spy Well, actually we're looking at NQ. We'll go to QQQ and then we'll take a look at spy So this is the biggest range on QQQ in a while There's the reversal at and there's the reversal at the 315 key gamma strike And now price is trading down below the 311 C4 level and RJ ask would you see today as indicative of volatility sellers? Getting squeezed and you know, I guess that could be that could be a possibility what what hero is showing is that net net for the index products for for the S&P 500 and NASDAQ that traders were buying puts and buying calls That's what a hero is showing. So they're actually actually buying volatility and the put buyers are having a good day today At least that's how I interpreted. You know, I'm sure there are people trying to sell puts today No market makers are not Market makers are not getting hit market makers They they hedge their delta exposure all along Right JC market makers immediately hedge. So, you know, they don't care. They're they're hedging immediately They're making markets and hedging So if they were getting hurt, they wouldn't they wouldn't be in business, you know, they they have algorithms that are You know constantly computer servers that are Constantly making markets and hedging keep you keeping themselves Delta neutral But as I showed before on this portion of the Vana model and this portion of the Vana curve that Market makers are trading with price To hedge their delta exposure. All right, so that's QQQ. Those are the levels that are in play for QQQ notice at this 1120 reversal the Cellsweep show them by those bright red dots Just at the 314 level and VWAP. All right, let's take a look at spy now so spy here's the resistance At the 411 volatility trigger first thing in the morning Just after the cash open and there's the 1120 reversal At this 410 large gamma strike And so I've got the wrong colors here on these 409 408 407 I need to fix my spreadsheet and Price continues lower All right, let's take a look at some stocks now and the first I want to take a look at is NVIDIA In really in the current environment the only stocks that's made change After today, but the only stocks on my watch list that are really moving Are NVIDIA Tesla and maybe Microsoft There's just not much range and and the other stocks that I follow. So here's NVIDIA and Let's take a look at hero for NVIDIA and Hero is often much easier to interpret for single stocks Than for the index products. So here's NVIDIA Note the strong correlation between options grades hedging flow and price action and traders are selling calls and buying puts That's shown by the following orange line and the following blue line And it looks like now that activity has leveled off somewhat and note the Strikes the key gamma strikes and play Here's the hedge wall at 265 and then the key gamma strike on the put wall at 260 all right, let's go back and take a look. I'm gonna zoom in on this a little bit So we'll look at the morning morning setup and this is just a strong confirmation of hedging flow hedging flow on price action and Jay says JEC says he thinks hero is easier for indices S&P 500 especially then underlying equities It varies from day to day if you're looking for a divergent setup You're more likely to see that in the S&P 500 than a single stock And that's the type of setup that I like to look for I like to look for hero moving one way price moving the other up to or down to a key level and then reversing at that key level Getting in sync with the options trade. So that is that type of setup is much more likely in the S&P 500 So here's Nvidia. Let's go take a look at book now and remember to 65 is the hedge wall So there's the reversal lower Just after the open at the 272 level and the primary target at the 265 At all level notice all the Liquidity at that level those are as price heads down. Those are passive buy orders limit buy orders So that's the setup on Nvidia and notice as Hero levels off options traders level off and price levels off If they start selling again the next target down below could be the 260 Put wall down below and note all the liquidity at that level All right, let's take a look at Tesla and Tesla has been bucking the trend today in an uptrend this morning Now it looks like it's rolling over. Let's take a look at hero for Tesla and with Tesla There's typically a strong correlation between hedging flow and price action and notice You know again in the morning a strong correlation uptrend and Then now zoom in on the afternoon here Hero starting to make Lower highs and prices starting to make lower highs shown starting about 12 30 12 20 12 30 and note the The hedge wall at 183 163. I'm sorry Here's the put wall at 160 and that did act as support this morning it took a while and Then here's the hedge wall and that has acted as resistance So not a lot of range for Tesla three points. That's that's not much for Tesla All right, so let's go take a look at book map again So here's the 160 put wall and again. It took a while that did act as support price was making a series of higher highs and then finally breaks Breaks above the 160 put wall and then found resistance at the 163 hedge wall and now is moving lower. All right, so RJ wants to take a look at Amazon Amazon definitely moving lower Let's take a look at hero when I look before I didn't see much. I Typically look or I want to show in this presentation Stocks that have a strong correlation with the hedging flow Not quite as clear in Amazon zoom in on the morning Definitely a divergent setup in this morning this morning reversal at the 105 key gamma strike So here's the the 105 key gamma strike and notice that price Was actually making slightly lower highs as Hero was dropping lower that didn't last long So let's go take a look at Amazon So 105 Again, that is the that's the key gamma strike and price reverses lower All right, so there was RJ says there was a test of the key gamma strike at 10 o'clock Not quite it looks like it did not quite get up to that level at VWAP reverses at VWAP just below the key gamma strike and notice the Barrage order flow coming in all those pink volume dots Again, that didn't last long price chopped around the 104 level for quite a while and now it's moving lower Let's go back and take a look at it hero and note. I have Just in interest of my own time. I have stopped marking the Key gamma strikes in my bookmap charts for stocks. It's just it takes too much time in the morning So I've stopped doing in that those are shown on these hero charts. So that's that's what I'm using All right, one other stock. Let's take a look at AMD And here there was a stronger confirmation between hedging flow and price action So let's go take a look at book map All right, so J.E.C. is J.E.C. says he copies the equity hub section and references the cells and my custom notes to get the key gamma strike and other levels for equities so that That sounds like a good idea Maybe you can provide more details on how you do that So for now, I've stopped doing it. You know those levels are shown in the hero charts. So here's AMD and remember that heroes moving down and This is a pretty good move for AMD three points lower. Okay, great. Thank you J.E.C. Right, so that's AMD Let's take a look at Microsoft. Let's go to hero for Microsoft and 280 is the hedge wall 275 is the put wall and this is what I saw this morning is that Put buyers There's kind of a if you break out puts and calls traders were buying puts Starting just a few minutes after the open and price responded lower. They initially started buying calls and That didn't last long Meanwhile, other traders were buying puts and price moved lower All right, so let's go back and take a look at book map Remember 280 is the hedge wall so here's your Here's the setup in Microsoft Turn break here below the below the hedge wall at 280 and below the VWAP below VWAP Microsoft is one of those stocks that has such a large opening print and especially such a large Closing print that you have to zoom up the size of the volume dots to account for that if you're showing either the open or the close All right, let's take a final look at the end in disease start Yes, and looks like it may have found some support around the 4100 level and JEC says yes to scroll that opening dot off the chart Yeah, so I'm showing this for presentation So I I like to show a zoomed out level so in that in that case I have to increase the size of the dots for stocks Let's take a look at what options traders are doing for For the S&P 500 so let's go back to the S&P 500 so it looks like now they're shifting to positive Positive Delta positions again They've been trying to support this level We'll take a look at what the zero DTE options traders are doing and and not so much Maybe leveled off a little bit and let's take a look at QQQ and Then we'll take a look at Nasdaq and wrap it up So leveled off a little bit. Let's see where Nasdaq found support so far around 12,000 850 below that and again remember the 310 Put walls down below and notice there's really been no shift in And no shift in the order flow shown on the sub chart there Cell stops and CVD still falling It looks like so there are a few iceberg buys coming in. All right, so those the The stocks that I saw that that were good short setups especially Well Nvidia especially on the short side Tesla on long side AMD and Microsoft and then the index products ES and NQ both good shorts as well as QQQ and spy Right my time is up. That's all I have. I want to thank Thank you everyone for watching. Thanks for your questions and comments special thing to our thanks to RJ and JEC For your active Participation today. It makes it much easier for me when I know that people are watching and and making Good comments and questions. All right. Thanks again. I'll see you tomorrow. Bye