 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. I have the focus of my presentation today 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. In the first is planning and I look at positional analysis. 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. And the second step of my process is execution. And I look at real-time order flow in Bookmap and real-time market maker hedging flow in Spot Gamma Hero to confirm my thesis and for setups for entries and exits. I think this is a new way of looking at the market that provides a significant edge. And on topic questions and comments are welcome and I will be watching the options-doug chat channel and discord and also the chat and YouTube. So again questions and comments are welcome. All right let's get started. What I want to cover today is first of all go over economic data and events for today and the rest of the week and then briefly touch on what's going on next week and then we'll go through our positional analysis and then we'll take a look at some setups and there were some great setups today. All right so first of all I think the key news for today was the ECB rate decision and they did go ahead with their forecast rate increase of 50 basis points. So previous was 2.5% and now it is 3% and I just saw something come over my news feed just a couple of minutes ago about they were afraid to do anything less than expected and fear of spooking the market. So you know for what for what that's worth and anyway this did not seem to have much impact on the market but it was something that I was was watching. All right then tomorrow of course is the monthly options expiration that is for the month of March and also for the quarter. Now there's also an end of month I guess maybe that's the true quarterly expiration but anyway March is a large expiration and remember for SPX there are two expirations. There's the AM settlement at the open and then the PM settlement for the weeklies at the close and then next week is the FOMC meeting and announcement at 2 p.m. on Wednesday and I believe also next week is Wednesday is a VIX expiration. All right let's take a look at our positional analysis and here is the S&P 500 futures ES and book map and before I dig into this chart I'm going to take a look at a larger time frame and we'll take take a look at SPX. So this is a 20-day one-hour chart for SPX. This is a thinkorswim chart and I'm showing just price and key levels here. These are spot gamma levels that are provided to spot gamma subscribers. They're updated in a thanks script you have to update that manually it takes a couple minutes. All right so the key levels that are in play for today are in I guess really in the in the range of possibilities but not really in play today is the put wall at 3800 and then here is the 3900 level that's not a that's an L2 level and that is also the key gamma strike. So the key gamma strike for SPX did drop from 4000 to 3900. Here's the 3950 level and that is the volatility trigger that spot gamma is proprietary gamma flip level. Market makers position below that level is negative and their gamma position above that level is positive. I'll talk more about that level in a few minutes and then there's the call wall at the 4065 strike and remember it dropped down yesterday and that is the also the the call collar strike the collar strike for the JP Morgan collar that expires on March 31st. So those are the key levels and that is a 20 day one hour chart showing primarily the rally that began yesterday with a test of the 3850 level and now SPX has gone above its upper edge of the expected move for the week and then also it's trading around 3950 the volatility trigger and that was also noted as a resistance level in the spot gamma AM founders note. All right so that is a 20 day one hour chart and then let's just zoom in a little bit closer. We'll take a look at another thinkorswim chart and this is a one day one minute chart again just showing SPX and price SPX price and levels. So here is the 3900 level that was noted as resistance also in the AM founders note and price passed right through that and now it seems to be finding more resistance at the 3950 volatility trigger level. So nice solid uptrend in SPX today as well as many other stocks. All right let's take a look at book map now in the levels that I was just showing are also shown on this book map chart and I have two columns of levels here. This is the spot gamma cloud notes provided to spot gamma subscribers and this is noting the key SPX levels. There's the 3950 volatility trigger and also resistance level and there's the 3900 level the key gamma strike. Excuse me and there's a comment in YouTube screen clarity required. Sorry I don't know what that means. You might if you're watching on YouTube you might need to adjust your quality settings. So go to go to your settings and you can change the quality there if it's fuzzy or not clear but at 720p you should be able to see the screen clearly. Okay so this is the SP500 again and the levels that were in play today were primarily in the morning session anyway the ES levels 3900 3950 and now the 4000 level is in reach and again also it looks like this SPX 3950 level is acting as resistance or somewhat it slowed down the S&P 500 anyway. All right I'm showing when I mention also I'm showing another column of levels. These are my cloud notes and I'm showing several different things here. First of all I'm showing the big round numbers for ES the zeros and the fifties and I'm also showing the same 3950 SPX 3950 and 3900 resistance levels. Spot gamma is using a 30 point difference between ES and SPX and I calculated it today at 32 points so I'm showing these levels just a little bit different just a little bit higher and that's where the white lines are at those levels. Okay so those are the levels in play and we'll talk about setups in a few minutes. Let's talk about shifts in levels now and for SPX I mentioned before the key gamma strike or the absolute gamma strike dropped from 4000 to 3900 and that is that's pretty significant. The 4000 level in SPX has been the absolute gamma strike for quite some time and we'll look at the gamma level charts in just a couple minutes and it'll become more clear what I'm talking about. So that's SPX that was the only change in level and then for SPI the put wall actually dropped down from 3390 to 380 so a drop in the put wall for SPI and then an increase in the call wall from 397 yesterday to 430 so that those are two levels that have been the the call wall levels for the last few days so call wall for SPI is back up to 430 and then for QQQ just a minor shift the volatility trigger moved up from 295 to 297. Okay so let's take a look at those gamma charts now and again this will provide more clarity on the levels so this is showing the absolute gamma levels this is for SPX and this chart is showing the market makers gamma at different strikes and this is the zero line and above this line this is showing positive gamma or call gamma and below that line negative gamma or put gamma shown with the teal bars so black bars are the positive gamma call gamma above teal bars are the negative gamma or put gamma below so recall for for weeks maybe months really the 4000 level has been the key gamma strike or the absolute gamma strike that is the strike with the largest absolute gamma and that can act as a magnet or support and resistance and now that has shifted down to 3900 so now the absolute gamma strike or key gamma strike is at 3900 and the put wall is down at 3800 that's the strike with the largest net negative gamma and that can be expected to act as support and then the call wall is right there at 4065 and that is otherwise not a very significant strike it's just by definition the call wall is the strike with the largest net positive gamma and that can be expected to act as resistance so note the call gamma or the gamma is pretty evenly distributed between 3900 and 4000 almost equal amounts of put gamma and call gamma and then there is a somewhat of a dominance of put gamma below the 3900 level all right that's spx let's take a look at spy so for spy 390 is the key gamma strike the absolute gamma strike and that was yesterday that was the put wall as well and now the put wall has dropped down to 380 again the strike with the largest net negative gamma and then the call wall is way up here at 430 so i would say below 400 let's say 392 well let's let me change that i'd say really the thing to notice here is the dominance of put gamma below the 390 level that's what stands out the most all right let's take a look at the combo charts and this shows the combined gamma for spx and spy levels combined into one number in terms of spx and here is the this is around the the volatility trigger the 3950 and put gamma below and some call gamma above and the volatility trigger is spot gamma's proprietary gamma flip level and below that level that indicates that market makers position on the gamma curve is negative that means that traders are long puts market makers are short puts and they have to sell futures to hedge their delta exposure and this can work that can work the other way around if price increases and implied volatility drops then they can buy back their short futures and that is what has been going on today the put vendor rally all right so that is in terms of spx and that is uh well we'll leave it at that let's take a look at nasdaq so for nasdaq we look at qqq so here's qqq the key gamma strike at 300 again the largest absolute gamma and the put wall remains at 285 and then the call wall at 310 okay so those are the gamma levels let's take a look at the some data now the gamma notional is what i usually point out and this is showing market makers position on the gamma curve for spx in the left column spy in the middle column and qqq on the far right and this is indicating for all these indices the spx spy and qqq market makers position on the gamma curve is negative and again indicating that they will be trading in the direction of price to hedge their delta exposure and these levels the changes from yesterday uh were actually mixed so for spx the number became slightly less negative just very slightly yesterday the gamma notional was minus 706 and today it's minus 699 yesterday spy became more negative uh spy became more negative today from yesterday yesterday spy gamma notional was minus 2285 today it's minus 2440 so slightly more negative and then for qqq became less negative yesterday gamma notional for qqq was minus 401 today it's minus 276 so again this is market makers on the position on the gamma curve and this is uh it's quite negative uh for all these indices especially the spx and spy all right there's a question in discord all right so uh truman makes comments if market makers are let's talk about indices first so spot gamma assumes that traders are long puts and or short calls so that means that market makers are short puts and market makers are short puts and long calls so in a negative gamma environment they have a positive delta position and as price drops they have to hedge with price to hedge their delta exposure and in a positive gamma environment they are short call their long calls so that's positive delta and as price increases they have to sell futures to hedge their delta exposure so they will be trading against price as as price increases and then if price drops they can buy back their short futures right so that's that's for an index all right i hope that answers your question if they are short puts or calls so generally spot gamma assumes that again market makers are short puts and long calls and the zero gamma level is just what it says the the zero gamma at level of zero gamma uh spot gamma price uh places more importance on the volatility trigger and that's actually the flip level okay let's move on so we've looked at the uh the gamma levels here let's take a look at the the vantam model which actually illustrates what I was just talking about and this is showing how market makers delta notional changes with changes in price and implied volatility and that's shown by the green curve which is showing again the market makers um how market makers delta notional changes with changes in price shown on the horizontal axis and implied volatility shown by the green curve and that is the vana effect the change in delta with a change in implied volatility and this is showing that as price decreases market makers delta notional increase and this is typical of a negative gamma environment and again they have to sell futures to hedge their delta exposure and it works the other way around as price increases their delta notional decreases and they can buy back their short futures so again in a negative gamma environment they're trading with price and let's take a look at spy there's the there's the vana model for spy and remember the gamma notional for spy is uh over three times the gamma notional for spx so this is steeper and then there's qqq and recall qqq has been pretty strong this week definitely um with the situation going on with with financial stocks regional bank stocks uh traders have piled in large cap tech stocks and that has helped to reduce the gamma notional for for qqq all right so that is the vana models and let's wrap up the positional analysis uh this is the this is my key gamma strike list and this is just a list of the stocks of my watch list and I track the key gamma strike from the previous day to the current day so the e column is showing the key gamma strike from yesterday and the current key gamma strike the d column is showing the key gamma strike for today and I compare the numbers and I color code them and green indicates that the number of the key gamma strike increased from the previous day and I take that as a bullish signal that means that traders are positioning themselves for higher prices right market makers are traders are positioning themselves and accepting higher prices and they're they're buying calls that are further out of the money increasing that key gamma strike so that's green indicating the increase from the previous day red indicating a decrease from the previous day all right there's another question from truman um all right so let's talk about indices again so in a negative gamma position that means that market makers are that's below the volatility trigger their position on the gamma curve is negative and that means that traders are long puts and market makers are short puts and then above the volatility trigger again we're talking about an index spot gamma assumes that traders are short calls and market makers are long calls and that's a positive gamma position and that's above the volatility trigger so right now at at least at the beginning of the day market makers position on the gamma curve was negative all right so that's our positional analysis and based on this uh i kind of had a mixed mixed thesis for today and first of all i was uh was bearish for the s and p 500 based on the drop in the put wall for spy and the key gamma strike for spx with a couple of caveats that depends on the boobed in vixx and the financials and then for tech stocks i was bullish just based on based on this yesterday the increase in the key gamma strike and all these stocks are uh uh tech stocks that's that's what i trade and a lot of the most of these are the large cap tech stocks apple amazon uh google microsoft and then notice today the increase uh in the key gamma strike for these stocks that did not did not increase yesterday so this is this is bullish again traders are um looking for and accepting higher prices as they uh as they buy calls and position themselves all right so let's take a look at the uh s and p 500 we'll start with our setups now let's go back to spot gamma and this is the the s and p 500 combined signal and notice now they have um spot gamma has made a change to this uh previously this symbol was the s and p 500 s spx plus spy that's how you found this and now they're calling it the s and p 500 and it's a combined signal of spx spy and xsp and the way you can find this if you don't have it on your watch list is just come up here into the search bar and just type s and you can find it that way so there it is the s and p 500 let me go back to that i want to show what i was looking at this morning so this is what i was looking at it uh this morning is this uh divergent setup and i posted this in discord and this turned out to be just a a small blip a small head fake but anyway it led to um you know i had no idea what was going to happen later on really um so anyway i saw this it was good for about two points and spy or about 20 points and es this divergence hero stop starts dropping and then es spy uh follows so let's go take a look at book map now and i'm going to see this was what i was talking about just a little little blip here a reversal at the vwap down to the 3900 level so good you know for 15 20 points something like that or you know a little bit less than two points and spy and then price reversed higher and i think there were several keys to that you know first of all you can see an order flow that aggressive buyer start to come in see this see the green dots here starting to come in cvd rising then these buy stop orders fuel the move higher let's go back and take a look at hero now so we'll scroll here a little bit and you can see the shift in hero traders start as price drops down to that 3900 level they start taking bullish options positions and price moves higher and then finally about that time there were a couple of other clues as well first of all vixx let's zoom in let's see well first of all note that vixx has pretty much been dropping since this high of 2921 yesterday and that means that traders were buying very expensive puts yesterday and now they're they're paying the price of paying up for those puts so let's now let's zoom in on oops zoom in on today so there's the reversal in vixx this is around around 1020 about the same time that that espx spy starts to turn higher so that's an additional clue and then let's take a look at this is the xlf the financials ETF and I think this was another very important clue that the xlf reversed higher about that same time so we you know we already know and we'll we'll see in a minute that nasdaq stocks tech stocks were were strong and there were some great setups and you know we saw in my key gamma strike list that there was a bullish thesis for those stocks anyway so I think the key for the s&p 500 was the drop in vixx and also the the rise in financials here so the you know again we know the tech stocks are strong and the financials are joining the party not holding the s&p 500 back so I think that was uh you know those were the clues the keys to the the reversal higher in the rally in the s&p 500 so multiple clues again vixx xlf hero rising and bullish water flow in in book map right so that's the s&p 500 and now let's take a look at some stocks so there were some great great long setups in in a number of these tech stocks so let's just start with apple we'll zoom in so we can just look at the morning session here and there's a strong correlation between options trades hedging flow and price action and let's go take a look at book map we'll take a look at apple now and thanks rj you're welcome all right here's apple nice strong uptrend again remember traders are taking positive delta positions and they got to the call wall target here at 155 notice the high liquidity there if if you're not familiar with book map this dark orange is showing the history of the resting orders liquidity in the order book and this liquidity attracts price and there it is is at the 155 call wall so nice uptrend there in apple let's go back let me take a look at hero again and we can separate out puts and calls and this is showing that calls the rising orange line this is showing that traders are buying calls and this is driving price action in one way you can tell of course is the the strong correlation between the orange line and price which is the white line and you can also look at this notional value and see that this is quite a bit larger than the blue line which is showing that traders are buying puts but there the call buyers are dominating and that has been driving price action higher or at least it was this morning let's zoom out and we can see that price levels off as traders stop buying calls and then they continue to buy puts and prices stalled around that 155 call wall level all right so that's apple nice long setup and floyd's garage and youtube asks pomba positive gamma expires tomorrow we can take a look at that so that you know that could lead to some potential setups uh call gamma unwind so and i would look for that in single stocks and for single stocks market makers are always at a negative gamma position all right so here's amd and let's zoom in on the morning separate out puts and calls and calls driving amd as well let's go take a look at book map and the semiconductors that i track amd and nvidia were very strong today and there's something interesting to note here is the the breach of the call wall showing here just after right after the open that's the 90 call wall and key gamma strike and recent uh recent data presented by spot gamma to subscribers has indicated that for a single stock again the single stock a breach of the call wall can actually act as an accelerant for a moving price higher and let's take a look at at equity hub and and see why that may be the case so this is amd and equity hub and spot gamma provides several different views what this is showing is the dominance of put gamma below this level in orange and that is the 90 level and that is also the key gamma strike and the call wall so put gamma put dominance below in red orange and then call gamma in green above so amd moved up above the 90 level and now is firmly in the call dominated region let's take a look at this put and call impact chart i'm going to zoom in on this and this is going to be somewhat like the gamma levels charts that we were looking at for spx spy and qqq so this is showing this key gamma strike and that's pretty obvious that it's the strike with the largest absolute gamma as well as the call wall the strike with the largest net positive gamma so as price moves up above that level all these calls are gaining value they're becoming more in the money more gaining more value and remember in for a single stock spot gamma assumes that traders are long calls market makers are short calls and as price increases they have to buy stock to hedge their delta exposure so as traders continue to buy calls like we just saw on hero and these calls go in the money they're gaining value market makers have to continue to buy stock to hedge their delta exposure and this is showing these the slope of this line we'll focus on the orange line here is showing the rate of change of gamma and this is showing that's going to level off oh let's say above 100 above this level somewhere between 100 and and this is you know like 105 to 109 something like that all right so that's amd and this is this is an explanation of that that breach of the the call wall and how that can act as an accelerant and then amd is a a perfect example of that breach of the call wall very positive bullish order flow price targets up above 92 93 94 and then the primary target at 95 notice the very dark color there that is the showing the large orders at that level all right so that's amd let me check for questions market makers in a negative gamma position so forage garage i don't understand your question let's let's take a look at let's go back to equity hub now change that back to total signal we'll go to equity hub and what i look at is this next expiry gamma percentage and let's just sort the list by that number and this is showing the next expiry gamma percentage and anything over 30 percent is typically pretty significant right so this right here all of these i would look at all these and then i would look at at the charts in the equity hub just like i have for amd here and if i see a a stock like amd firmly in the in the call gamma region i would look for a potential call gamma unwind in these stocks so the way that works is these calls are all going to most of these calls are going to expire tomorrow and so they will quickly lose value especially court towards the end of the day and that is the uh then market makers delta exposure will decrease as those calls lose value that's the charm effect the change in delta as time passes so market makers as their delta exposure decreases no longer need their long stock edges and they can sell their stock edges and sometimes if traders especially if traders don't continue to buy calls tomorrow then that can lead to a a nice short setup for that call gamma unwind okay so floyd's garage i hope that answers your question and rj asked is the key gamma strike the same as the absolute gamma strike yes same thing just two two names for the same thing and a break of that level does a break of this level create acceleration no not necessarily but in the case of the case of amd it's at the same strike which is not unusual and that uh spot gammas research and stats indicates that it's a break of a wall that can that can cause acceleration all right so let's what tomorrow we'll go um we'll go through this well let's actually let's take a quick look and see so nvidia may be the same situation is amd snowflake no put dominated tesla no uh put dominated amd yes we just looked at that apple may be some uh call domination above the 160 level amazon may be call dominance above the 105 level meta good chance call dominance above the 195 level and meta is trading in this call dominated region and microsoft call dominated above 270 so i would look if you're looking for a call gamma unwind i would focus on nvidia amd meta and microsoft all right let's move on let's go to there are some other setups that i want to cover amd amazon traders buying calls again is a pretty common theme let's go to book map another strong rally here in amazon up to the 100 call wall key gamma strike and notice amd hit the call wall key gamma strike very early in the day around 1045 and then other stocks like amazon here rallied up to that level and seemed to have stalled um around that level may be moving higher now um but anyway that was the primary target for this morning let's go back and take a look at hero so traders so it seems like if you have it on puts and calls and try and make a change it it uh doesn't act well so i always need to remember to change it back to the all all trades or a total signal so notice here that again as traders stop buying calls around lunchtime 12 o'clock eastern price levels off and they are they're buying puts also so that's why price is stalled at that um at that one 100 level all right let's change it back we'll make any changes update take a look at meta all right let's take a look at and karma trades ask can i repeat why tesla's put dominate based on the composite view because the color of the composite view it was all uh light red meaning a lighter position but the red orange uh anything from orange ish to dark red indicates put dominated in a shade of green indicates call dominated all right so there's meta let's go take a look at uh take a look at book map in meta headed the other in the other direction uh initially headed down and meta has been quite strong this week maybe uh traders were initially taking profits uh hero led down and up for this rally uh and it looks like meta reversed higher uh just around the same time as the s and p 500 with the 200 call wall key gamma strike as a primary target right rj asked do i look at vix does it use right i'm not sure you i understand your question um so vix options are based on the the vix futures i believe and i don't look at i don't look at vxx i typically just look at vix so options on vix are based on the futures and somebody uh somebody correct me if that's that's not right but that's my understanding all right so that's meta let's take a look at microsoft and somewhat similar to um meta a little bit of a chop a little bit of a a drop down in the morning and remember yesterday microsoft uh led the way higher and then it took a while to get going on microsoft let's take a look at a hero for microsoft and notice the chop flat hero in the morning and then start to rise and price follows so that's microsoft and let's just separate outputs and calls so really calls driving but not not as clear as uh some of the other stocks that we looked at total signal provides a better signal and let's take a look at nvidia and you're welcome karma trades and floyd's garage and youtube you're welcome as well all right so here's nvidia and strong correlation as usual between hedging flow and price action mainly calls driving you can see by the rising orange line and again note the strong increase in the morning hero levels off starts to drop down and price levels off and let's go take a look at book map and this is um turn this down this is the absorption indicator just kind of obscuring price here and we'll turn down sweeps this automatic mode sometimes uh you just have to make an adjustment to to see the appropriate number of uh sweeps and absorption so very strong uptrend here reversal higher at the 240 key gamma strike note the rising cumulative volume delta and first target at the 245 liquidity next target at the 250 call wall and now price continues higher let's nvidia take a look at qqq it looks like i need to add more lines to my my price line spreadsheet so another strong uptrend and reversal higher around 1020 at the vwap let's take a look at at hero and this is not as clear actually kind of a let's just zoom in on the morning so somewhat of a early morning confirmation up till about 11 o'clock and then traders started taking negative delta positions fading this move higher so let's see what they're doing so they've been buying puts pretty much since the open and rj i was actually just going to look at that so let's let's first of all go back to the total signal and no not necessarily notice the so i'm looking at this kind of teal green line that's the zero dte that's the zero dte compared at around 117 million versus the total all expirations at 685 so this is really uh most likely uh options that expire tomorrow unless we can uh confirm this in in think or swim all right for a call volume and this may be hard to see so this is showing call volume is dominated by the 305 strike that expires tomorrow and then puts and this is uh this is showing puts that expire today at the 304 strike are dominating volume so that is puts that expire today calls that expire tomorrow that's what thinkorswim is showing the the option stats for qqq all right so they were much easier to read setups in the in the single stocks rather than qqq and also the smp 500 um then finally let's wrap it up with tesla and there's uh as usual a strong correlation between hedging flow and price action it took a while for tesla to get going here so really the key reversal higher was uh was around 1020 when the smp 500 uh reversed higher and traders are buying calls and selling puts so let's uh we'll go to book map and we'll uh uh take a quick look at tesla and then we'll take a final look at the smp 500 so here's tesla and the choppy action the reversal at the 180 key gamma strike around around 1030 1020 and then price moves higher and note the the shift to the green dots here shift higher in the cvd and bullish order flow up to the uh and again that's off the call wall up to this 185 liquidity and also like many other stocks trading up to the upper edge of the expected move for the week all right let's take a final look at the smp 500 here's the spy we'll we'll wrap it up with spy showing the strong move up around 1020 up to and past the 3950 spx 3950 resistance level and the 395 volatility volatility trigger up to the upper edge of the expected move and the 396 strike and now price is moving lower and we'll just take a quick final look at at hero and let's go to the smp 500 signal and that has been uh traders have been fading this move higher oh since about uh 12 31 o'clock maybe even 12 o'clock noon assume in a little bit of this so traders started taking negative delta positions around 12 o'clock and then price seems to be finally responding okay that's all i have for today uh let me do a final truck for questions and matish asks do you manually add the levels to each stock or there are they extrapolated from spot gamma somehow and uh the levels do come from spot gamma but i add them manually i use an add-on in and book map called price line this is available in the book map marketplace and i fill out these levels under spreadsheet whatever i want so i'm showing spy levels i like to show the round number levels also i note the key spot gamma levels and then i'm also showing the spx level so i just calculate the ratio of spx to spy and then i show the location of the spx levels as well so i do that in a i enter all that information or spreadsheet and i'm just using that price lines add-on so there is uh you know that i have to change the levels manually in my spreadsheet they're not updated in cloud notes like the like the es futures so i hope that answers your question okay that's all i have i think i've answered all your questions and remember tomorrow is the options expiration with an am settlement for spx also a p.m. settlement and then everything else expires at the end of the day so thanks again and i will see you tomorrow bye