 Hello, everyone. Welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 p.m. Eastern Time. Before I get started, I need to go through the disclosures. General disclosure, all Bookmap limited materials, information, and presentations are for educational purposes only, and should not be considered specific investment advice nor recommendations. Risk disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. 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. 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. The second step in my process is execution. I look at real-time order flow in Bookmap and real-time market maker hedging flow in Smart Gamma Hero to confirm my thesis and for setups for entries and exits. When I talk about setups, I will be talking about an underlying asset, and those setups can be taken with futures contracts, shares of stock, or options. Questions and comments are welcome, and I will be watching both the Options-Doug chat channel in Discord and the chat in YouTube for your questions and comments, and hello JJK, glad you're here, and hello KarmaFX, glad you're here as well. Welcome. I want to cover today my agenda. First of all, go over news, economic data, and events, and earnings for the week. Then I'll go through my positional analysis. Then I want to review some setups from this morning, and then we'll talk about the live market. When I get to the live market, if anyone has any stocks they want me to take a look at, please let me know, and I'll be glad to do that. Alright, let's start with economic data and earnings for the week. So let's go to economic data first. So tomorrow I'm just going to highlight the high impact numbers, at least according to daily FX here. So first, tomorrow 10am ISM PMI data, also construction spending, jolts, a variety of economic data comes out at 10am tomorrow. And then on Wednesday the ADP Employment Report comes out at 8.15am eastern time, and on Thursday jobless claims, and then at 10am services PMI. And then finally on Friday the big economic report for the week is the Employment Report. 8.30am on Friday, that's the Employment Report that comes out on the first Friday of every month at 8.30am eastern time. Alright, so that is the economic data for the week. And trade and sale, hello. You're welcome. Thank you for your kind words. Alright, so that is economic data. There are also some important earnings reports this week. So first of all, I guess they really aren't talking about it on the news. Most is Apple and Amazon. We'll take a look at that in just a moment. So tomorrow after the market closes, AMD reports. This may be difficult to see. Let me zoom in on this. This is a new earnings calendar from Spot Gamma. So this is showing AMD. I'm just going to, I just go over the stocks that I follow. AMD reports after the market closes tomorrow. The expected move percentage move 6.67% plus or minus. So that's AMD on Tuesday. And then of course the big reports are Apple and Amazon on Thursday. Amazon looking for a plus or minus 5.5% move. Expected move. And then the expected move for Apple is 3%. So those are the key earnings reports for the stocks that I follow. Large cap tech, magnificent seven. Okay, so that is the news items for the week that I want to cover. So again, the just to summarize big events for the week is the employment report on Friday and then Apple and Amazon earnings after the close on Thursday. All right, let's take a look at some charts. I'll go through my positional analysis. This is the SAP 500 futures, ES futures. And before I take a closer look at this chart, I want to take a look at a larger time frame. So I'm going to take a look at SPX. This is a 30 day one hour chart for SPX and thinkorswim. Let me point out the levels on this chart. The dash purple lines are showing the lower and upper weekly expected move. That's from the options market, the expected move for the week. And then the dashed blue lines are showing the upper and lower daily expected move again from the options market. So so far, SPX is trading within the daily and weekly expected ranges. All right, so those are the anticipated ranges for the day in the week. Let's take a look at some spot gamma levels now. So first of all, these are proprietary spot gamma levels shown with the dark red lines, red horizontal lines. First of all, there's the put wall. That is for SPX, the put wall to strike with the largest net negative gamma that can be expected to act as support. And remember last week, as last week was the first week after July expiration, as levels were shifting around, the put wall was moving quite a bit. And maybe it appears to have stabilized at 4500. So it was at 4500 on Friday and remains at 4500. Again, that's the strike with the largest net negative gamma that can be expected to act as support. And then the next level up is the volatility trigger at 4570. That is spot gamma's 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 hitch their delta exposure. And that tends to enhance or increase volatility. And then on the other hand, like SPX is trading now, above that level, market makers position on the gamma curve is positive. In a positive gamma environment, market makers have to trade against price to hedge their delta exposure. And that tends to subdue or decrease volatility, leading to more of a more range days, lower volatility, lower trading range. And then finally, the next key level up is 4600. And that is the absolute gamma strike. The strike with the largest absolute gamma as well as the call wall. And the call wall is strike with the largest net positive gamma. And that can be expected to act as resistance. And spot gamma sees that along with the spy 460 call wall as the upper end of the range. All right, shifts in levels for the SPX. The volatility trigger did shift higher slightly from 4565 to 4570. Also the absolute gamma strike shifted higher from 4550 to 4600. So bullish shifts higher for SPX. And the same for spy volatility trigger and absolute gamma strike also shifted higher. All right, let's take a look at another chart with just SPX levels. This is SPX in a one day, one minute chart we just focus on today. So SPX trading in a very narrow range. And this was this is as anticipated due to the positive gamma SPX trading above the volatility trigger shown here at 4570. And it's above the lower daily expected move and below the upward daily expected move. And then here's the 4600 call wall, which is the potential ceiling for any move higher. All right, let's go take a look at book map now. So those are the SPX levels. And for ES, I have my own cloud notes. And I have the same SPX levels. And I also add in spy levels. So there's the spy 458 that did act as resistance earlier today. Here's spy 457. Those are just round numbers. They're not they're not gamma levels. Then here is the the volatility triggers below for SPX and spy. And here's the 4575 large gamma two level, along with the right at the same level as ES 4600. That level did act as support. So for most of the warning, ES was trading in a range between spy 458 on the high side and spy 457 on the low end until it broke below different around 1230. This final test and it broke below. Right, so otherwise not a lot to see here very narrow range up and down order flow looks bearish to me. Icebergs stops CVD all negative. Right, I talked about shifts and levels again for SPX and spy, both a volatility trigger and absolute gamma strikes shifted higher. All right, let's take a look at NASDAQ now. And for NASDAQ, I'm not going to look at the QQ chart. It did not have the 383 and 382 levels labeled. Let me just go take a look at something. So these are the daily index levels for QQQ. And note this is indicating that 382 is a large gamma two level and 383 is the zero gamma level. So those are gamma levels. They're not shown on the QQQ think or swim chart that I normally look at. So I'll just stick with book map here. So in book map I'm showing again my cloud notes. I have NDX levels QQQ levels. There's the 385 QQQ call wall. Then I also have NQ round numbers the zeros and the fifties and then the other QQQ levels. And I'm going to talk more about this setup when we get to setups. And this is absolutely fascinating. This setup right here was identical to last Thursday. This is a setup that I posted on and discord and on Twitter. Same level is just identical setup. So these are the levels that I'm playing for today again a very narrow range for the NASDAQ trading up and down around the 15,850 level. And you can see the session volume profile that the that's the point of control volume concentrated at that 15,850 level. Alright JJK asked what ratio do I use between SPI and ES is it adjusted daily and yes it is. Let me see if I have that on. I do have that on this chart. This is just a little script in think or swim that displays this badge that calculates that ratio in real time. And right now when I put the SPI levels on my ES chart I use 10.0817. Then I also have the ES minus SPX level and I'm using 25 today. So it's around 25. These numbers change a little bit during the day and they do change from day to day. They generally get lower as the options futures contract rollover approaches and then they'll widen out again and narrow down. So this will ES minus SPX will narrow down towards zero as the the next rollover the September contract approaches or the September rollover approaches. And then the same for the ES to SPI ratio that will tend toward 10. It will never get there. Alright so here's NASDAQ. I've talked about the levels and JJK I do the same thing for NASDAQ. I have that on my QQQ chart. Alright let's take a look at a little bit more data here for the um positional analysis. I'm going to go back to whoops here we go. I'm going to focus on gamma notional. This is market makers position on the gamma curve. This gives us an idea of the how to anticipate the volatility and trading range for the day. So this is the gamma notional market makers position on the gamma curve for SPX SPI NDX and QQQ and for SPX that number is positive. These numbers all did increase from last Friday so they became more positive or less negative. So SPX gamma notional is positive market makers position on the gamma curve slightly negative for SPI and shifted so less negative for SPI and then for QQQ shifted from negative to positive. So gamma notional for QQQ on Friday was minus 441 at the beginning of the day and shifted to uh 76 positive 76 today. So if we look at the Vana models they will be um they'll be pretty neutral. So let's let's just do that. We'll just take a quick look just to illustrate what I was talking about. Let's take a look at QQQ go down to the Vana model. So right now QQQ is trading just over 383 so that's right here. What this is showing is there may be a slight tailwind as price increases. This chart is showing market makers delta exposure and how that changes with price. The purple curve is showing how market makers delta no show changes with changes in price and applied volatility. So what that is showing is if price increases again just a slight tailwind market makers can buy back short hedges. Enterprise continues to increase. Whoops wrong tool. They will have to start selling futures. Then on the other hand if price decreases and applied volatility increases they will have to sell futures to hedge their delta exposure. So on the right side here this is typical of a positive gamma environment and then on the left side typical of a negative gamma environment. And let's just compare that curve with Friday. So this is typical of a more negative gamma environment. We're really looking at this side of the the curve and it works both ways. So if price decreases market makers will need to sell futures and as price increases and applied volatility drops market makers can buy back short hedges. So that is going back today. So a curve typical of a more positive gamma environment. So based on this my thesis for the day also I forgot to mention shifts in doubles. There were none for NDX and then for QQQ the volatility trigger and absolute gamma strike shifted higher just like SPI and SPX. So based on this information first of all I was looking for a lower volatility day based on the increase in gamma notional for the SPX, SPI, NDX and QQQ this so the gamma notional shifted higher looking for a lower trading range or lower volatility day trading range and also a directional bias bullish based on the shifts in levels. All right so that was my thesis for the day. All right let's take a look at some setups. I'm going to start with the S&B 500 and let's go take a look at hero here. This chart is from Spot Gamma. It's the hero signal, hedging impact real-time options. It is showing price with a white line here price for SPX and the purple line is the hero signal that's showing options trades and market maker hedging activity for a combined signal for SPX, SPI, XSP and ES futures and this is what you want to take a look at if you trade any form of the S&B 500 whether that is ES futures, SPI shares or options or SPX options. This is what you want to take a look at this combined signal. This is what is driving price action very often in the S&B 500 these options trades. All right let's zoom in on this. I want to focus on a couple of setups from this morning. So when this hero signal is moving down that indicates that traders are taking negative delta positions and they could be most likely today they're buying calls and buying puts. We'll take a look in just a minute but at certain points the call buyers or the put buyers become more aggressive and here I like to look for these divergences so this shows the hero signal right around 945 starts to drop. Price makes just a slightly pretty much an equal high slightly lower and then follows the hero signal and that's at around 945 to 950 so we'll take a look at that and then here's a divergence long as price drops traders start taking positive delta positions and that line increases setting up a divergence long so we have a divergence short and quickly just about 10 minutes later a divergence long so let's go take a look at that and book map we'll zoom in a little bit more. All right so remember around this time traders started taking negative delta options positions shown by hero and you can see both times when price reverses lower green dot shift to pink dots aggressive sellers start to come in and price reverses lower at the spy 458 level so that was the short setup and the move was fueled lower by aggressive sellers pink dots also sell stop orders and then price reverses higher as options traders started taking positive delta positions after that quick drop you can see the aggressive buyers start to come in and move price higher so a divergence short and a divergence long for the s and p 500 this morning we'll take a look at the live market in a few minutes and see what's going on now and so far order flow again looks looks pretty bearish to me these are iceberg orders negative stop orders negative and cumulative volume delta also negative all right let's go back and take a look at hero all right so hero for the day this notional value is positive so net for the day options traders are taking positive delta positions we'll see what they're doing so they are buying calls that shown by the rising orange line the positive notional value 1.46 billion and they're also buying puts but the call buyers are more aggressive they're buying puts that is negative 167 billion versus positive 147 1.47 billion all right so there are i guess a variety of players involved dynamics we know that net options traders are taking positive delta positions but larger traders with selling are selling with iceberg orders sell stop orders are negative and aggressive sellers are also trying to drive market the sb 500 lower again what i pointed out on the sub chart here icebergs negative stops negative cumulative volume delta all negative shown by these following lines all right so that's the sb 500 let's take a look at nasdaq all right let's focus on this morning setup and note the levels here this reversal at nq 15900 and then a retest of the qqq 384 level and then the move lower so those two levels in play all right let's take a look at the setup from last thursday that i posted so first of all again this is from last thursday thursday july 27th note the hero divergence and then price starts to move lower just a beautiful uh hero divergence setup i think i i did i did actually post this just after 10 a game and then i posted the the follow-up that the annotated setup later on that evening all right so that is the hero signal for thursday for nasdaq that is the combined signal for ndx and qqq and so keeping that in mind now here's the chart of nasdaq from from last thursday 15900 384 the exact same levels almost the exact same setup price reverses lower at 15900 and goes back uh moves below 384 goes back checks makes a high a lower high and reverses lower as water flow is bearish and options traders uh we're taking negative delta positions all right so let's go take a look at today now so today we know the same levels are in play we'll zoom in on this just a bit and so far uh water flow not quite as as bearish as it was on thursday but um iceberg stops cvd all negative and generally trending lower all right let's go take a look at hero we'll take a look at the signal from nasdaq this is a combined signal for ndx and qqq and note that it is definitely bearish the number is negative notion of value negative we'll zoom in on the on the morning setup on this reversal that i was talking about so not quite the clear divergence um from last thursday but till still hero signal moving lower as price moves up to that nq 15900 level and then moves lower all right so there's the morning setup let's go back we'll take a look at book map again so again identical levels to uh last thursday almost a very similar pattern and nasdaq moves lower all right let's take a look at some stocks and let's go and uh nanny o2 asked can i take a look at roku yeah i'll do that in just a minute let me get through these stocks and then uh then we'll take a look at roku watch list and this wasn't much of a setup but i it was a divergence long so note that long tool so hero moves up price moves up price drops and then there's this divergence long hero starts to rise price drops down then follows higher there it's a little bit more clear divergence long let's go take a look at book map so really uh not much range in amazon today there's long entry good for about a point 132 50 to 133 50 all right the next is microsoft and here i saw a confirmation long this morning back take a look at microsoft so this is what i was looking at this morning and i'm looking at this i like to be on the side that uh that market makers are so if traders are buying calls market makers sell the calls and they have to buy stock they hedge their delta exposure so often if i'm looking for a long entry i'm looking for that situation i want to be in the same side as the market makers and on the other hand if traders are buying puts market makers are selling puts and they have to sell stock to hedge their delta exposure so if i'm looking for a short i i want to i want to look for again i want to be on the side of market makers so that's why i'm looking at this and for stocks it's it's pretty simple right the next nvidia and pretty choppy day here in nvidia strong correlation between hedging flow and price action and just around 10 am there was a good confirmation long traders take positive delta positions and at the same time price moves higher let's go take a look at nvidia pretty choppy day in nvidia but here's the here's the long setup sharp drop trend break and aggressive buyers start to come in let me bump up the volume dots a little bit make them a little bit easier to see so you can see the shift in order flow here a lot of aggressive sellers on the way down and then aggressive buyers start to come in large pink dots on the way down the bottom and aggressive buyers start to come in so a move higher for two or three points depending on when you when you get in got him all right that's nvidia otherwise a pretty choppy choppy day for nvidia not a lot of conviction let's go back and take a look at at book map so far so far for the day notion of value is positive 60 million let's see what they're doing both the numbers are positive they are buying calls and selling puts numbers pretty small i think for nvidia and spot gamma actually had a note and the am founders note this morning about the declining call volume for equities so kind of interesting that could put a could put a damper on rally as traders call buyers step away all right so that's nvidia and then tesla strong correlation between hedging flow and price action here oops let's see what traders are doing in tesla and that for the day they are buying calls and selling puts both those numbers are positive and hero is rising tesla's making some deeper pullbacks but giving good opportunities for longs up until about 1240 note that the hero line what's wrong tool hero line levels off and so does price as options traders take their foot off the gas stop buying calls stop selling puts price consolidates let's go to google get at book map now go to tesla so i have the um trend break shown in the morning here price reverses higher as traders start taking positive delta positions and these deep pullbacks to this trend line for several uh long entries and you can see in these two long entries the shift in order flow the aggressive buyers start to come in shown by the uh green volume dots all right uh nanny o2 wants to take a look at roku we can do that so let's go back to hero now i don't have roku in book map so we'll just have to look at it in um and hero here and i thought i saw roku here in these uh in this list of trending stops i know that was fubo that i saw right so here is roku very strong correlation between options trades hedging flow and price action total signal gives more clarity so options traders were pretty aggressive right after the open driving price up from uh around 91 50 up to 96 so traders were buying calls and selling puts all right so nanny o2 hope that helps let's see does roku report earnings this week no i don't see it here i'm not sure when uh when roku reports earnings well let's take a look at the live market now so there's roku options traders taking their foot off the gas and price follows it looks like the sb 500 continues to chop notion of value is positive let's go back to book map not much to see here let's take a look at nasdaq again not much to see here this is why i like to look at stocks like nvidia and tesla the larger stocks with very active options markets tend to move around a little bit a little bit more see if we can get a read on nvidia maybe all right so nvidia is right around trading right around the point of control for the day just below vwap point of control shown by that blue uh purple line vwap shown by the light blue line and point of control for stocks typically will remain at the opening print until the closing print assuming on this a little bit got the volume dots let's see what options traders are doing see if we can get any clarity let's go to nvidia all right so andrew asked he says he's new to book map hello welcome glad you're here new to book map reading heat maps how can i tell when the quiddity is pulled from the order of book versus when it actually stays and gets filled and that's a great question for bruce bruce is the director of education at book map and he has a live daily webinar at 10 am on monday tuesday and friday and he likes to look at the sb 500 at that level looking at when liquidity is added and pulled that's something that he does very well i typically do not look at um at the heat map for the sb 500 at that level i'm looking at a little bit larger time frame so let's go uh we'll we'll take a quick look here so to tell if it got filled or not maybe we can do that with nvidia but i would still ask ask bruce you really just have to zoom in right to me so the heat map here is showing these were limit buy orders at 465 50 and the order book and from looking at this so this large pink volume dot meets up with that those limit buy orders uh that looks like that was filled to me so it didn't look did not look like um that was pulled so here you can see this is not the not the same thing here's where these orders were pulled so this is kind of a uh a flip in the order book and you can tell here this at the 465 level there was no these levels were not filled so that's called absorption at that level so aggressive buyers start to come in right uh ahead of that 465 level right above that uh 465 level and if you zoom in you can see the all these orders in the order book these limit orders and traders put them in it looks like they might have been filled right here we can zoom in on this just a little bit so no no fill here no fill here looks like this was filled partially anyway all right so you have to zoom in uh pretty tight to see that but that is helpful information this is um you know if you're looking at this level seeing these orders come in in the order book really traders chasing price higher finally finally they get filled about a dollar higher than uh than original their original orders here chasing price higher with limit orders they finally get filled right around 466 15 all right so andrew hopes that hope that helps all right so we were looking at price right around the point of control and vwap so it looks like vwap was somewhat support until about 2 p.m. and now is resistance let's see what options traders are doing and note that hero is sloping down here so traders are starting to take negative delta positions and price finds resistance at the uh at vwap so traders uh must be options traders seeing that seeing the resistance of vwap and taking negative delta positions so they stop selling puts notice the put line is flat and they start selling calls shown by the falling orange line and mobile nerd games i'm not sure i understand your question for these indicators direct access to the market necessary or people just see the orders and their broker all right so let's go back to book bamb so for stocks i have uh i have separate data subscriptions one for futures that is rhythmic rhythmic data and then for stocks i subscribe to dx feed and this gets stocks data from a variety of exchanges this is the this current order book is the actual current limit orders in the order book and anyone who has full depth of market data uh can see this information so dx feed does provide full depth of market for stocks rhythmic does provide full depth of market for futures so i can zoom way out and many many brokers platforms aren't going to show you this data but i can see uh you know as far as i want to scroll out i can see this orders in the order book full depth of market that's what so that's what dx feed provides we'll zoom back in here then what the heat map is showing is a history of those orders in the order book all right so back to andrew's question so that is showing it looks like the orders in the order book and just after 14 to 222 were filled so this is a history showing a history of the orders in the order book this indicates they were filled and those orders are no longer in the order book look at the number now um what is it's going up a little bit now so there's some shading coming in we get the right tool so when i was looking at this just a moment ago that number was all right all right so now that number is uh getting smaller the shading has gone i'm looking at the the orders at 466 467 sorry so the darker and thicker the line the uh the more orders in the order book zoom in on this just a little bit more here we can see a little bit more the orders coming in so if orders come in at 467 this band of shading will will become darker so traders are entering and pulling orders all the time so these numbers are going to change right so again this is using data from dx feed uh it gets data from a variety of exchanges mainly uh nasdaq and edgex all right let's take one last look at the uh broad market and it looks like uh now nvidia's trending lower as traders take negative delta positions he is still chopping in a range but generally trending lower and same for nasdaq all right my time is up i want to thank everyone for watching thank you for questions and comments and i will see you tomorrow thanks again bye