 Hello everyone welcome to options with Doug streaming live daily. I'm 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, I'll book map the material's 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. And just to run reminder on YouTube I am streaming at 1080p so and I was just changing my I'm watching YouTube on one computer and and streaming on the other so I can see the chat but I had to change my resolution in the settings on YouTube to get to 1080p so if you're having any problem with screen resolution on YouTube again I am streaming at 1080p right now. And hello Don welcome glad you're here. All right the best way to get in touch with me is through Discord. My name on Discord is Doug P. Also in Bookmap Discord there's an options-duck chat channel that's a great place to post questions comments and content related to the topics of the channel which I'll go over in just a moment and I'm also on X formerly known as Twitter my name there is at Doug Plus. The focus of my presentation and the focus of the options-duck chat channel 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 positional analysis. I look at how traders and market makers are positioned at the options market and how those positions change from day to 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. I look at real-time order flow in Bookmap and real-time market maker hedging flow in SpotGammaHero to confirm my thesis and for setups for injuries and exits. And when I talk about setups today I will be talking about setups in an underlying asset and setups can be taken any number of ways. For example the SMB500 setups can be taken with ES futures, spy shares, spy options, SPX options, or even ES options. Questions and comments are welcome. I will be watching both the options-duck chat channel and Discord as well as the chat and YouTube for your questions and comments. And by the way the Bookmap Discord where the options-duck chat channel is located is free and open to everyone whether you have a Bookmap subscription or not. All right here's my agenda for today. Monday October 23rd I'm going to go over news items first, economic data events and earnings for the upcoming week. There are some pretty significant earnings coming up as well as significant economic report data release at the end of the week. Then I'll go through my positional analysis, then I'll review some setups from this morning, and then I'll talk about the live market. And when I get to the live market if anyone has any stocks they want me to take a look at please let me know and I'll be glad to do that. All right let's start with news. So this week again there are pretty significant earnings coming out for the large cap tech stocks Magnificent 7 and so the data starts tomorrow October 24th PMI data comes out at 9.45 a.m. Eastern time and then Google and Microsoft report earnings after the close on Wednesday the 25th new home sales at 10 a.m. and then Jerome Powell speaking just after the market closes and also meta reports earnings after the market closes on Wednesday. Let's just take a look at take a look at an earnings chart here so we can see these earnings reports. All right so here's Google and Microsoft on the 24th and according to spot gamma looking for just under a 5% move plus or minus for Google and around 4% for Microsoft. So that's on Tuesday, Wednesday meta reports earnings and note this chart is plotting implied move on the vertical axis and date on the horizontal axis. So meta has a higher implied move than Microsoft and Google. That's understandable. Again reports earnings on Wednesday after the close looking for around plus or minus 7.8% move. On Thursday economic data at 8.30 a.m. Eastern time durable goods GDP could be a market mover and then Amazon reports after the market closes and here's Amazon somewhere in the range of implied move somewhere between Google and Microsoft on the low side meta on the high side. So that's Thursday after the close Amazon reports and then on Friday the PCE data comes out that could be the the largest economic data release of the week the PCE data at 8.30 a.m. Eastern time. All right let's start with positional analysis now and here's the ES futures SAP 500 futures and book map welcome to the put Vanna rally I'll talk more about that. So again this is ES futures and book map and before I take a closer look at this chart I'm going to take a look at a larger time frame I'm going to start with SPX and a 30 day one hour chart. Let me point out first the key turning points on this chart this is the September 15th expiration that was a large expiration call dominated and that's when this downtrend began and then on October 6th the date of the jobs report the September jobs report first Friday the month in October and a gamma squeeze rally began stalled around this level with interest rates rising geopolitical events market move lower and then here is the whoops wrong tool and here is the October expiration very put dominated expiration negative gamma and that I guess due to traders buying puts for potential risk over the weekend the put Vanna rally did not start until today as those traders were buying very expensive puts those puts are now losing value when traders along puts market makers are short puts and they have to sell futures to hedge their delta exposure as price increases implied volatility drops those puts lose value market makers can buy back their short hedges and that is the basis for a put Vanna rally we'll take take a look at the Vanna chart in a minute and see a graphical representation of that all right so those are the key turning points and this whether today this options expiration on Friday whether that is a key turning point or not remains to be seen so we'll have to wait for several days as traders position themselves in the November expiration and we'll watch interest rates as well and that's a completely a key driver of price all right let me point out the levels on this turn first of all the dash purple lines showing the lower and upper weekly expected move that's based on the options market 68 percent of the time one standard deviation spx should trade within that range and the dash blue lines are showing the lower and upper daily expected move also based on the options market one standard deviation move 68 percent of the time spx should remain within that range so the weekly expected move that just change that just changes once a week i update that on the weekend and then the daily expected move changes every day and i update that at the close today all right let me point out the spot gamma levels on this chart i'm going to point out the spot gamma key daily levels first of all here's the put wall at 4200 that's a strike with a large net negative gamma that can be expected to act to support and note that level did not that level held after the move down on friday did not move lower so that is uh i took that as somewhat of a positive sign all right the next level up and actually i missed a level the absolute gamma strike did shift lower to 4000 that is a very significant strike that's the strike with the largest absolute positive and negative gamma and that level did shift pretty significantly pretty significantly lower from 4300 on friday to 4000 so that is that is bearish all right so that's the lowest level the absolute gamma strike the next level is the put wall at 4200 that level did hold did not change the next level up is the 4320 level that's the volatility trigger that a 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 hedge their delta exposure and that tends to enhance or increase volatility on the other hand 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 that level did move lower from friday slightly from 4350 to 40 uh 4320 so note spx is trading below that level now and then finally the call wall at 4400 the strike with the largest net positive gamma that can be expected to act as resistance so there's the range for today somewhat unusual to have the absolute absolute gamma strike uh below the put wall but that did did happen so we'll watch that the next few days as traders position themselves in the uh november expiration all right let me check for questions um all right so uh michael asked why one standard deviation that's just a standard way of looking at an expected move for options if you look at an options chain look at the expected move that's what it's showing a one standard deviation move and michael also asked why do you identify why do you use to identify put walls uh well the put wall call wall absolute gamma strike volatility trigger these are proprietary spot gamma levels and they're based on gamma weighted open interest and if you're not familiar with what i'm talking about i suggest going to the spot gamma website go to the free resources and you can find some more detailed explanations about these levels and and why they're important all right so those are the key daily levels and whether today remains uh is a key turning point remains to be seen all right let's take a look at a another spx chart just for today to take a look at the levels and play for today so no spot gamma levels directly acting as supportive resistance note here is the put wall spx did trade down below the put wall today spot gamma considers uh that as oversold when the uh smb 500 trades below the put wall that would be the spx 4200 put wall or the spy 420 put wall so spot gamma looks at that as oversold and their stats show that the forward one day and five day returns after a put wall breach are positive all right so those are the spot gamma levels and play for the for today for the spx that's a one day one minute chart all right let's take a look at book map now so in book map i have my own cloud notes so i can show spx levels so here's the put wall at 4200 so i can show spx levels also spy levels so this level you can't see the label now that uh there that is uh the spy 420 absolute gamma strike and put wall just above the spx 4200 put wall and michael you're welcome all right so that is the 420 level just below that level you can see there are two lines right here so that is the spx 4211 and also the spy 420 level and now it looks like the smb 500 may be finding resistance right around this spx 4250 level that was noted as resistance in the spot gamma am founders note and then finally note the spy 418 level uh just after the cash open that was around 945 we'll talk about that reversal higher in just a few minutes uh that was the support for today and really uh resistance uh maybe this 4250 level that remains to be seen for the day all right note there is a difference in price between es and spx and that changes a little bit every day it usually gets smaller after the contract rollover until it tends toward zero at the next contract rollover today i'm using 24 points so es minus spx today is around 24 it varies a little bit it's looks like it's changing between 24 25 but 24 is the closest i usually usually use the closest round number and that uh that difference takes a few minutes maybe a half an hour after the open to settle so earlier this morning it was looking like 25 and then you know of course spx doesn't start trading until 9 30 a.m eastern time so uh around 10 a.m it settles down all right so those are levels in play for the sab 500 today again the spy 418 level acting as support and now the sab 500 is trading above the spy and spx put walls support levels and approaching the upper daily expected move that shown with this dash blue line there all right let's take a look at nasdaq now oh and shifts and levels let me just go over that again so for spx volatility trigger did shift lower and most notably the absolute gamma strike shifted lower for spy the volatility trigger also shifted lower the call wall shifted lower to 440 that is not um not really in play not significant i think more important to me was the the put walls held at 4200 and 420 and then also the absolute gamma strike for spy shifted lower to 420 so that is slightly uh bearish as well all right let's take a look at nasdaq now and hello stan welcome glad you're here and hello delik derrick i'm sorry derrick welcome glad you're here as well all right here's nasdaq strong rally today uh that started about 15 minutes after the open let's look at the levels and play i'm going to start with the qqq chart so we can isolate those levels so here's qqq and note that qqq is still trading above its put wall at 350 and around this 351 level held that was actually uh ndx zero gamma level uh right around there all right so nice strong rally and um and qqq maybe the 359 level acting as resistance we'll see let's take a look at ndx all right ndx for some reason the zero gamma level is not shown on this chart some consolidation around this cluster of levels whoops including the call wall at 14600 all right so shifts and levels for nasdaq for nq all the levels shifted lower the key daily levels volatility trigger put wall call wall absolute gamma strike all shifted lower and for qqq the volatility trigger shifted lower and the absolute gamma strike shifted lower so for the sb 500 and nasdaq volatility trigger shifted lower across the board and absolute gamma strikes also shifted lower across the board all right so the key level here for let's you know let's not work the zooming in but i can um the key level that held the support this is the zero gamma level that's the ndx zero gamma level that held a support with the 351 and the 14500 nq 14500 uh just below that so similar to the es and nq futures i have my own cloud notes showing qqq levels and also ndx levels so there's the call wall the 14600 call wall right i'll talk about setups in a few minutes it looks like the upper daily expected move shown with this dash blue line is acting as resistance that's just below the qqq 359 level so this is how i look at both the es and nq i frame the movement in terms of spx and spy levels for the sb 500 and qqq and ndx levels for nq futures all right those are the uh that's the nasdaq sb 500 let's take a look at take a look at gamma notional now see how market makers were positioned on the gamma curve at the beginning of the day this is gamma notional market makers position on the gamma curve for spx spy ndx and qqq and know that ndx this number is not significant that's just that's 0.6 million compared with uh spy for example at 200 uh 2176 uh or 2 billion to 2167 million all right so note these numbers for spx spy and qqq all negative this indicates that traders on long puts market makers are short puts and that market makers have to trade with price to hedge their delta exposure in a negative gamma environment all right let's take a look at a graphical representation of that and actually hold that thought for just one minute what i want to show is this open interest change for spx go to open interest change for puts so this is what changed from friday to to today so traders were what they did is they were net sellers of puts this is below just for reference this is 42 30 here so traders were selling puts looks like they may have been rolling down selling puts above that level and buying puts below and it looks like to me the notional value here for the puts they sold is potentially larger than what they bought all right so that's just uh just an indication of what was going on and now with spx so they were buying expensive puts so now spx is trading around 42 40 somewhere around here so all these puts they bought they paid a lot for those paid high price paid a high price uh vixx was very high puts were expensive now those puts are losing value price increases implied volatility drops those puts are losing value all right let's take a look at the vana model now what this chart is showing is market makers delta notional on the vertical axis and price on the horizontal axis there are two curves on this chart the first the light gray curve shows how market makers delta notional changes with changes in price only so as price price increases market makers delta notional will decrease and they can buy back their short futures remember a negative gamma environment market makers are uh uh short puts and their short futures to hedge that position all right the next curve the purple curve adds implied volatility to the equation so this is showing how market makers delta notional will change with changes in price and applied volatility and that change in delta with a change in implied volatility is the van effect van is a second order greek and that's the curve we want to take a look at so at the low of the day spx was right around 41 89 so that's right here so what this is showing as price increases implied volatility drops market makers can buy back their short futures so again remember traders were buying expensive puts on friday to hedge for potential risk over the weekend and those uh at least earlier today those puts were not paying off and and market makers could buy back their short futures let's take a look at take a look at a chart of vixx or actually i'm going to take a look at the i think i have the vixx futures and this will play into the long setup this morning so notice after a a small bump up vixx futures have been trading lower most of the day now maybe finding a bottom around 19.3 but a very very start a sharp steady drop in vixx futures and this was around 945 so that will play into our long setup this morning right so we know price increases implied volatility dropping market makers can buy back their short futures in this negative gamma environment so there's your put van rally all right let's take a look at spy and note this the shape of this curve with its very steep skew to the left is typical of a very negative gamma environment let's take a look at spy spy low of the day 418 we saw that that acted to support so very kind of in the middle the very steep portion on the left side of the curve again the same dynamic in play price increases in pride volatility drops market makers can buy back their short hedges finally qqq lower the day we saw that was around 351 right here again on the very steep portion of this curve all right so based on this information that i just talked about my thesis for the day there were actually two the verse was bearish based on the shifts lower in levels and then the second was bullish based on a potential put van rally that is very typical of options expiration and a negative gamma environment and also the put walls held so primary or thesis number one thesis number two so far thesis number two is playing out today all right let's take a look at some setups i'm going to start with the smb 500 and i want to see what options traders have been doing today and we'll take a look at book map in just a moment and we'll see what other traders have been doing as well all right so this is the hero signal and this is available to spot gamma subscribers hero stands for hedging impact real-time options so everything that we've looked at so far in spot gamma that i use in my planning process has been static data primarily based on gamma weighted open interest that is updated once daily in the middle of the night all right so this is real-time data now again hedging impact real-time options what this chart is showing is price for spx and the hero signal that is showing options trades and market maker hedging activity for a combined signal of spx spy xsp and es futures all under one combined signal all right let's zoom in on this chart and i'm going to leave it just like this this is nine around 945 am eastern time note the sharp shift higher in the hero signal initially traders were taking negative delta positions right around 945 vicks started to drop traders were taking positive delta positions and also we'll see in a moment the 10 year yield started to drop let's just zoom in on this chart a little bit see if it'll hold for just a moment take a quick look separate outputs and calls note that traders really were not not selling calls they took their foot off the gas for a moment started buying calls so the call signal was really never negative and sorry about that that was what i was trying to avoid now let's go back out and that was nothing i did and then they start buying calls again maybe just a few minutes after they start selling puts and spot gamma has pointed out when both of these lines are moving in the same direction that's a very strong signal in this case a bullish signal all right so we know that traders were buying calls that shown by the rising orange line they were selling puts shown by the rising blue line and that is a bearish signal a bullish i'm sorry taking positive delta positions so buying calls selling puts bullish signal all right let's go to book map actually let's go to go back to this chart right here take a look at the 10 year so if you've paid paid attention to the news at all you know that interest rates have been a key driver price recently this is the 10 year yield and note that this does open earlier than the than the vix futures this is right around 8 15 am eastern time so here's the reversal lower right around 945 same time as vix same time as traders started buying calls selling puts all right let's go to book map now so we've set the scene for a potential long and we know again thesis for the day looking for a potential put banner rally let's go to book map and you can see the shift in order flow here these volume dots are showing market buy minus sell magenta dots indicate there are more sellers than buyers green dot indicates more buyers than sellers so right around 945 aggressive buyers start to come in so aggressive sellers pull move price lower that was down from the spy 420 level down to 418 aggressive buyers come in and also note this rising the steep light blue line that's showing large traders buying that move down with iceberg orders they use to hide their size and there is the on chart indicator that is 1459 contracts for executions so large traders were buying that move down that's pretty typical they're buying weakness and selling strength and then as price starts to move up buy stop orders help to fuel the move higher that shown by the steadily rising yellow line in the sub chart as well as these small green dots here these are buy stop orders helping to fuel the move higher all right so that was a nice long setup confirmation again with with volatility with vicks vicks futures options trades traders buying calls selling puts in the sb 500 and also order flow here in book map at a level round number level in the in spy and definitely confirmed by order flow here all right so there's the long set up in the sb 500 and to hear you are asking about that earlier so there you go here's my my analysis of this long set up let's take a look at nasdaq now and i'm going to if i can zoom in just a little bit so we can see so now we can see where we're the nq reversed higher almost down the lower day they expected to move but this indiax 415 zero gamma level and the 2 qq 351 level around that level acted as support all right so we know the zero gamma level acted as support and i look at any of the spot gamma levels as potential support when tested from above or potential resistance when tested from below so right now it looks like the upper daily expected move could potentially be the upper range for the day that's the upper daily expected move all right let's take a look at first of all we'll take a look and see what options traders are doing so let's go to the nasdaq combined signal so it looks like now they're taking negative delta positions there could be a reason for that well i'll talk about in just a minute all right so let's focus on the morning reversal higher just right at the same time as the sb 500 hero signal jumps sharply higher traders were buying calls from the from the open very steady rise in the orange line indicating traders taking positive delta positions buying calls and though they are buying puts today the call buyers more aggressive than the put buyers sorry about that all right so that's the nasdaq there's the the signal in the morning right around the same time as the reversal higher in the sb 500 you can see the same pretty much the same shift in order flow aggressive sellers on the way down than aggressive buyers shown by the shift from magenta dots to to the green dots rising cumulative volume delta shown by the dark blue line and also buy stop orders also helping to fuel the move higher all right let's take a look at some stocks let's go back to hero and actually let's taking a closer look at this it looks like the call buyers took their foot off the gas right around 1115 call line is flattened out sorry about that and by the way there were a couple of other viewers in youtube that mentioned they were having this problem as well if you are a spot gamma alpha subscriber you have access to hero and you're having this problem please let them know support for spot gamma is info at spot gamma dot com so they were they took their foot off the gas for calls and continue to buy puts so that's what's going on in the ndx and qqq all right let's take a look at some stocks now and i'm going to go to go to this total signal here's apple note apple reverses higher at the 170 put wall support level almost to the tick hero versus higher at that level let's go take a look at book map take a look at apple here's the 170 put wall note the high liquidity at that level when price was tracing trading down the heat map is showing there were a large number of limit buy orders and those were consumed they came back in just after 1030 you can see all the aggressive buyers coming in with the green volume dots right so there's apple nice reversal higher again at the 170 put wall right the next stock i want to take a look at is nvidia let's go back to hero go to nvidia to zoom in and let's see what traders are doing and nvidia reversed higher just around the same time not so much of a v reversal as the smb 500 and nasdaq but definitely reversed higher traders are buying calls and they're also selling puts both the call line the orange line rising as well as the blue line the put line rising so they're buying calls and selling puts call buyers really more dominant note the timely actually the let's go back timely flow alert here and in nasdaq nvidia has traded up above its hedge wall note the 430 level is the key gamma strike let's go to book map so there's the 430 key gamma strike so sharp move sharp rally higher today in nvidia and still holding just below the 430 level and note how these large levels of liquidity at the zeros and the fives come in right at the cash open the heat map and book map shows a history of these orders in the order book and interesting to see at this 430 level note how this line gets gradually darker and thicker as more sellers come in at that level so we have the heat map showing a history of limit orders in the order book these are sell limit orders above price and there are more and more sellers coming in as this line thickens and becomes darker and this is pretty typical of stocks these limit orders often come in at the at the open and they stay there until they're filled all right the next one i want to take a look at is tesla well let's see what options traders were doing first let's go back to hero let's go to tesla now so in tesla traders buying calls and selling puts reversal around the same time at 945 let's go back to book map note all the aggressive buyers coming in shift from magenta vibe magenta volume dots on the way down aggressive sellers right at the open they were on the turn out on the wrong side of the trade aggressive buyers coming in and now it looks like tesla has stalled around the 215 level let's go back and take a look at hero and you can see this is pretty typical options traders come in in the morning then they take their foot off the gas somewhere between 1111 30 and and won something like that and then price has consolidated so the hero signal flattens out indicating traders are again taking their foot off the gas they're not not as aggressively buying as they were in the morning price consolidating let's just take a quick scan through so a lot of these large cap tech stocks that's primarily what i trade what i watch we're bullish in the morning apple amd now the hero signal has flattened out amazon very bullish google meta microsoft pretty similar similar pattern consolidating sometime around lunch bullish in the morning reversal at 945 all right so i talked about in nasdaq how traders are buying puts also buying calls and what i'm thinking is traders are taking positive delta positions in the individual stocks and maybe buying puts to hedge themselves so i think that way maybe you know an explanation explanation for this falling blue line in the nasdaq signal let's just take a look at qqq qqq 1.1 billion so most of that is qqq 1.2 billion notional for the total nasdaq signal all right does anyone have any stocks they want me to take a look at reading questions well let's take a closer look at the sb 500 today i've separated out next expiry so this is the uh zero dte options so what that means for the sb 500 for spx spy xsp es options there are options that expire every day so this is actually showing next expiry and for all those instruments that would be options that expire today so the green line is showing the notional value of options that expire today and that is um maybe a little bit over half of the notional value of what is trading today a little bit more bearish than the total all expiration signal and stan is asking about uh 60 or z in uh sorry i don't believe those are available they're certainly not available in uh in hero here and i don't think they're available anywhere on spot gamma i do not have them in bookmap so um yeah i can't show that i can't show any inside over the over what you can get and just a a candlestick chart and whatever trading platform you have all right so uh stan i did show uh z in before or actually the 10 year yield so z in of course is just going to be the inverse of that and let me just check all right so i see also that in my watch list uh 60 is up for the day so both the british pound and the euro up weaker dollar today all right let's go back to the sb 500 so the hero signal has excuse me about one o'clock leveled off now trending lower let's go take a look at book map go back to the sb 500 so now making a series of lower highs aggressive cell are starting to come in right here with a larger magenta volume dots and then a large buyers coming in with their buy iceberg orders that is 3,570 3,557 contracts 26th execution so that is a pretty large number of executions aggregated into one signal here if i was if i zoomed in a lot you would see more more of those executions but at this zoom level uh these are aggregated together again 3,557 contracts large buyers coming in as prices move down let's go back to hero and let's zoom in a bit so if i were looking for a long setup here into the afternoon i would i would want to see the hero signal shift up let's do a quick check on um some of the other factors let's take a look at so 10 years starting to drop again that may be bullish let's see what volatility is doing all right so vix starting to rise a little bit all right so traders started to buy puts shown by the falling blue line also started to sell calls let's go back to book map let's see what they're doing in nasdaq so pretty similar pattern for nasdaq making a series of lower highs falling cumulative volume delta but large traders continue to buy with iceberg orders that show them by the rising light blue line and so far the stop orders that is pretty flat shown by this yellow line so right now stop orders really not fueling and move lower or higher i'm going to take a one last look at at the van a model here and see where we are in the van a curve all right so 42 50 let's see where sbx is trading right now 42 35 let's just check what the high of the day was high of the day 42 55 now 20 points lower so the high of the day pretty close to the bottom of this curve so that indicates at this level a lot of that put van a fuel was burned up and as price starts to drop lower still on this negative portion of the curve market makers as price drops lower implied volatility increases market makers have to start selling futures again still in this negative gamma environment well below the volatility trigger at 43 20 all right so this works both ways in a negative gamma environment market makers trading with price all right my time is up i want to thank everyone for watching thank you for your questions and comments and i will see you tomorrow remember pmi data at 9 45 a.m eastern time maybe a slight market mover and then google and microsoft report earnings after the market closes and we'll talk about more about that tomorrow all right thanks everyone thanks for watching thanks for your questions and comments and i will see you tomorrow bye