 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 as not suitable for all investors. Past performance is not necessarily indicative of future results. As a reminder, the focus of my presentation and the focus of the options dash Doug chat channel and Discord is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading and the first is planning and I use positional analysis and I look at how market makers and traders 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 the 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 SpotGamma Hero to confirm my thesis and for setups for entries and exits. And on topic questions and comments are welcome and I will be watching for your questions and comments and the options dash Doug chat channel and Discord and the chat and YouTube. So again, please post your questions and comments and I will try to answer. All right, let's get started. So what I want to cover today is I want to go through a brief review of yesterday and we'll talk about how that is continuing into today and then I'll talk about news economic data and then we'll go through our positional analysis and finally we'll talk about some setups. So yeah, unlike yesterday where there were very few setups there were some great, great long setups today and a few shorts as well. All right, so first of all yesterday, an interesting day. Let me just set the scene a little bit first. This is a thinkorswim chart showing the TNX. This is the 10-year note yield and this is yesterday and notice the jump up pre-market and indicating that the 10-year yield had increased pretty substantially and generally you would take this as bearish. You know, the yield rising I take that as somewhat bearish but the market did not see it that way anyway so I just wanted to set the scene with that and then let's take a look at, here's the ES for the day and recall yesterday, first of all in the morning in pre-market this was included in the Spot Gamma AM Founders note the Gamma Notional for SPX and SPY was extremely negative at yesterday for SPX Gamma Notional for SPX was minus 712 and for SPY it was minus 2596. So both those numbers and especially for SPY were extremely negative and what this means is that traders were long puts, market makers were short puts and they have to sell futures as price decreases to hedge their delta exposure and as price increases they can buy back those short futures and as implied volatility drops. So that was key yesterday is that large amount of Gamma Notional and typically I look for a put-vanna rally around big economic events, economic data events like CPI report, jobs report, FOMC minutes when there's a buildup of puts, traders buy puts ahead of those events and the number comes out to be not as bad as expected which is pretty typical and implied volatility drops and price starts moving up puts continue to lose value and market makers can buy back their short hedges. So in the case of yesterday there was unexpected news. First of all let's continue to set the stage here and look at the VIX from yesterday again. This is yesterday and showing that let's see first of all that news event the it was the Atlanta Fed President Bostick was speaking yesterday at 1.35 p.m. So this is about when those comments came out. So even before that VIX was dropping and again this means that those puts, traders along puts and those puts are losing value, market makers are short puts and their short futures to hedge their delta exposure and as implied volatility drops their delta exposure decreases and they can buy back their short hedges and then when this comment came out at 1.35 p.m. Eastern time and let's take a look and see what that was. Whoops here we go. So I've got that here and here's a couple of comments at 1.35 p.m. Eastern time and apparently the the news bots the news out goes interpreted this as bullish price jumped up. Let's go back to that SPX chart. So price jumped up above that 3950 resistance level and continued higher for most of the day. VIX continued to drop and aggressive buyers stepped in that shown by this dark blue line that's showing rising cumulative volume delta CBD and then the rising yellow line is buy stop orders and that helps to fuel the rally higher. These these small green dots are buy stop orders helping to fuel the move higher. So all of those things combined the put that a rally aggressive buyers and you can see all the all the green volume dots here. Those are market buy orders all the buy stop orders fueling that move higher and you know again market makers were unwinding their their short hedges while that was going on. So really the key was knowing the extreme position on the gamma curve extremely negative position on the gamma curve and this this type of rally is there's always a potential for it whether the news is known or unknown like yesterday. So that you know knowing that again the gamma note negative gamma notional the market makers position and then the news drove the drove the market higher. All right let's go. Let's go back now to today. So here's one of the additional comments again market market. So the news bots interpreted this as as bullish. Okay so let's take a look at today now. This is the S&P 500. Yes futures and let's take a look at VIX for today. So this is this is the continuation. This is yesterday overnight and then the continuation today up until about noon. VIX continue to drop indicating that those puts continue to lose value and we'll talk we'll look more at the data today. So especially the spy gamma notional was still at minus nineteen fifty four I believe today. So still quite negative helping to continue to fuel they put that a rally. Okay so that is the that was the rally yesterday. That's what in my opinion that's what happened. That's what what helped to fuel this rally and then it appears to be continuing today. Okay let's talk about data briefly. So there were a couple of data drops data numbers that came out this morning at nine forty five and ten ten a.m. services PMI data both were greater than expected and both were greater than fifty indicating expansion. All right let's let's talk about our positional analysis. So that was the news today. It looks like the market initially interpreted that news as is bearish. There's the ten a.m. data and then the put banner rally continued with that test of the ES four thousand level. All right before I dig further into this chart let's let's take a step back and look at a larger time frame. So this is SPX and this is just showing price and the key spot gamma levels. So this is a thinkorswim chart using a think script that spot gamma provides to their subscribers showing the key gamma levels. So again I'm just looking at price and key gamma levels and what this is showing is the downtrend broke yesterday and continues today and that's shown right here. So this is a twenty day one hour chart showing here the last two days the rally continues and let's take a look now at the key levels and I'll talk more about these levels in just a minute. So here's the put wall that's the thirty nine hundred level and then the key gamma strike is at four thousand and then the call wall remains up here at forty two hundred out of play at least for the time being. Okay so those are the levels that are in play again this is a larger time frame twenty day one hour chart and now let's take a look at a similar chart with just for today. So this is another thinkorswim chart just showing SPX price and levels again the same think script and showing the levels that are in play for today and here is the four thousand absolute gamma strike or key gamma strike and then there's the forty fifty level above and these were two resistance levels that were noted in the am founders note and it looks like the forty fifteen did provide some resistance and price has broken above that and now is above the forty thirty level so it looks like the next level in play is the forty fifty above all right let's go to book map now so these I'm showing the levels on this chart as well and I have two columns of levels these are the spot gamma cloud notes and these are provided to spot gamma subscribers showing the key SPX levels and combo levels and only the this is only showing that the key SPX levels are in play and this is showing SPX 4000 that's the again the absolute gamma strike this column is my column of cloud notes and I have marked these resistance levels that I just mentioned the forty fifteen and the forty thirty and I have converted them to equivalent ES prices right now spot gamma is using a five point difference between ES and SPX and I calculated a four point difference so not much not much difference so that's why I'm showing 4000 down here for example while spot gamma is showing it one point up for SPX and then I'm also showing the key SPI levels that's the SPI call wall and at 402 and then there's the SPI 400 key gamma strike and then finally I'm showing the big round numbers for ES just to highlight for me visually so that is the ES 4000 level so a lot of levels on the chart and some were important some were in play today and it's important for me to keep track of these levels and where this indicates where price is likely to go and where market makers are likely to react so note the consolidation of the forty fifteen level and then at the SPI 402 level the call wall and price continues higher and I pointed out these lines in a previous chart the increasing CVD rising dark blue line and also the stop orders the rising yellow line showing by stop orders helping to fuel the move higher okay so those are the levels on the charts shifts and levels there were very few for SPX and SPI the volatility triggers volatility trigger for SPX moved down and for SPI it moved up so mixed picture on volatility triggers for SPX the volatility drop triggered dropped from 39.95 to 39.75 for SPI that level moved up from 396 to 398 and what the volatility trigger is is spot gamma's proprietary gamma flip level and that indicates that market makers position on the gamma curve should be negative below that level and again that was that's the situation that I talked about before traders are long puts market makers are short puts and they have to hedge in the direction of price to hedge their delta exposure and then on the other side above the volatility trigger that indicates that market makers position on the gamma curve is positive and their hedging will be in the opposite direction of price and that tends to decrease volatility above the volatility trigger and increase it below when they're trading with the direction of price and then for the call wall SPI call wall that increased I talked about that up at 402 now from 399 yesterday and before that it was at 420 so it dropped from 420 to 399 and then back up a little bit to 402 and then finally for QQQ the vol volatility trigger increased slightly from 293 yesterday to 294 so some minor shifts in in levels all right let's take a look at the gamma charts now and see where those levels come from so we'll start with the S&P 500 and these are the absolute gamma levels and this shows where gamma is concentrated this is the zero line with positive gamma or called gamma above that line shown with the black bars and negative gamma or put gamma shown with the teal bars below the zero line so for SPX the 4000 level is still very obviously the key gamma strike and that's the strike with the largest a largest absolute gamma positive absolute value of positive and negative and that's pretty obvious and the put wall remains at 3900 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 the strike with the largest net positive gamma and that can be expected to act as a both as a magnet and as resistance and I will say that spot gamma has had a couple of recent webinars where they've presented some studies and ideas on these put walls and call walls so I need to spend some time this weekend going over that again and looking at this new information and one thing they were talking about is the the reaction at the call wall especially can be different for the indices versus stocks and we'll see that on some charts today so that's the SPX again the absolute gamma strike and then the put wall at 3900 and the the call wall at 4200 and let's look at spy now again the same thing positive gamma recall gamma shown with the black bars put gamma or negative gamma in the in the teal bars so this is the 400 key gamma strike and then the 390 put wall the strike with the largest net negative gamma and then the call wall at 402 so again that's moved up from 399 which was kind of unusual being below the the key gamma strike to above and note on here still the dominance of still the dominance of put gamma below 400 although what it appears to me and I I don't have the screenshot from yesterday is somewhat of a build of of call gamma from about 395 to 410 or maybe 405 okay so that's spy and now let's take a look at and so we can see where the levels come from this all these gamma levels and while we're on this page I want to take a look at the combo levels and this is the S&P 500 combo strikes both SPX and spy combined into one gamma level and then converted to an equivalent SPX price so this is the this is the 3993 that kind of separates the the two levels and this just happens to be the zero gamma level and the thing to note here is the dominance of put gamma below that level and what appears to be a build of call gamma above that level again I don't have a screenshot from yesterday and and so I you know I can't make a definitive observation but that's what it appears to me is a build of call gamma above all right let me take a look at a couple of questions or the question in YouTube when we have a stop run swap liquidity sorry I don't understand your question and yeah I did show a change of trend in the in this SPX chart right here changed from this downtrend and that that happened after the the Fed Speaker yesterday afternoon that trend change the break above 3950 and then the move higher was was helped to fuel by the stops by stops right so I don't know if that answers your question or not but that's that's what I saw that's what I talked about okay let me check for questions and discord so Persian lion please I you know you're you're quoting market internals here that's great that you look at that it does not it's not one of the topics that I talk about so let's just stay on topic here options order flow and the impact of options markets on on stocks and futures so market internals do not belong here it's great that you look at them I look at them too but I don't discuss them here and they're of secondary importance I think okay so let's go back to our charts now and let's look at NASDAQ and for the NASDAQ we'll take a look at at QQQ we don't look at NDX it's the options market for NDX is not significant so this is QQQ that we're looking at and 290 is the key gamma strike and the put wall that's for QQQ and 310 is the call wall up here and you can still see the dominance of a put gamma but again it may appear to be some call gamma building above the 290 level all right let's take a look at uh let's take a look at data now all right so this is the gamma notional that I was talking about before this is market makers position on the gamma curve and as you can see this is all negative and this is for SPX in this left column spy in the middle column and QQQ on the right column and this is still negative somewhat uh you know I guess if not extremely negative so yesterday there were changes so this dropped from yesterday and the the extreme readings from yesterday so yesterday SPX gamma notional was minus 712 and it has become less negative today to minus 310 and as I mentioned before yesterday spy gamma notional was minus 2596 and extremely negative reading and today it's still very negative at minus 1994 and that can continue to fuel a put banner rally and then yesterday QQQ gamma notional was minus 945 today it has become a little bit less negative at minus 682 so again this is market makers position on the gamma curve and indicating that traders along puts market makers are short puts and they have sold futures to hedge their delta exposure and as those puts lose value due to price increasing and implied volatility dropping they no longer need their short hedges and they can buy them back and that helps to fuel a rally and we can illustrate that graphically or that's illustrated graphically with advantage arts here and this is showing market makers delta notional or delta exposure in the vertical axis and strike price on the horizontal axis and what this is showing is as price decreases market makers delta notional will increase and they have to sell futures to hedge their delta exposure and it works just the other way around like it is today as price increases their delta notional decreases and they can buy back their short futures and this green curve is showing how market makers delta notional changes with changes in implied volatility and that is the banner effect the change in delta with a change in implied volatility and then the black line is showing or the black curve is showing how market makers delta notional is changing with as time passes and that's the charm effect the change in delta as time passes so that is the spx here spy notice the the curve is much much more steep indicating the much more negative gamma notional for spy and then here's qqq so all still negative you know still all all leading to this potential for a put vat around me okay let's last thing that i want to take a look at is this is my key gamma strike list and let's go back i just want to make sure everybody there's a question about this yesterday and let's go look at some data now and first of all spot gamma has free resources if they're if you have any questions about these levels what they mean the significance all of this is free and pretty substantial support information here again all free to whether you have a spot gamma subscription or not and for spot spot gamma subscribers you can also get quick definitions of all these levels so for example again there was a question yesterday i want to make sure that i answered this properly the spot gamma absolute gamma strike or the key gamma strike is first of all the strike with the largest total amount of gamma and it they're indicating that in their studies indicate that market makers will likely have a stronger hedging obligations near this level and it can also be used as support and resistance and it can also act as a magnet for price so i of the levels there are four or five key daily levels that i track for everything and and the i think the most important and the easiest track you know it's difficult to track all these levels but i track the the key gamma strike for all the stocks of my watch list and so here's my recently pared down watch list to the stocks that i trade on a daily basis and i'm tracking the current key gamma strike which which is the key gamma strike for today and then the previous key gamma strike that's from yesterday and then i compare the values and if the price decreased from the previous day i will note it in red and if it increased from the previous day i will note it in green or color code these just for easy visual reference and this is can be a good indication of how the stock is going to react during the day and what what traders are looking at how they're positioned in the options market and whether they're expecting prices to increase or decrease so with the exception of apple here there were still no changes in the key gamma strike from day to day from yesterday to today all right so given all this i had a couple of thesis for today and the first was and really waiting for the data to confirm this first there was a potential trading range around spx 4000 with the spy call wall for 402 call wall as an upper bound and the spx 3950 is a lower bound and that was one thesis thesis number one and thesis number two was a trend confirmation trend continuation from yesterday and that is what that's what's playing out today one of the big keys has been the the drop in vix and that large net negative gamma the large negative gamma for today and the the drop in vix those puts continue to lose value and again fueled by aggressive buyers by stop orders and price has moved up above that well i thought maybe an upper bound that 402 level and price continues higher all right let's take a look at some setups and then we'll we'll get to the s and p 500 and actually i think i have that that hero chart up this morning for the spx plus spy so i'll start with that and what this is showing this is the combined signal for spx and spy and they used to call this es and now it is the combined signal of spx and spy let's zoom in on this let's take a we'll look at the larger screen so you can see in the morning traders were taking they were fading this options traders they were taking negative delta positions buying puts i think most likely they have been buying puts and buying calls but the put buyers were buying more puts than the call buyers they were more aggressive and let's just take a look and yeah that's the case so this and you can look at these notional values 1.72 1.73 billion versus 768 billion so puts versus calls notional value for puts much larger than the notional value for calls and then if we look at the overall signal we can see that overall net net options traders for spx and spy did decide to join the party about 11 a.m eastern time and then price broke out of this consolidation and started to move higher again all right so that's the s&p 500 i thought much more difficult to interpret much much more difficult to read than many of these stocks so that's the s&p 500 and now let's start and let's take a look at some stocks so much much easier reads today i thought you know here's apple there's no no question that there's a strong correlation between price action and and hedging flow option trades and hedging flow and apple and let's separate out calls and puts and we can see that traders are buying calls and apple let's zoom in on the the larger chart traders are buying calls and this is a an options trader this is what you want to look for all right let's take a look at at book map now let's go to apple and here's the here's the morning trend let's zoom in on this we'll stop here so there's the morning trend pullbacks several pullback entries initial price target at the at the 150 level 150 call wall all right there's the uptrend in uptrend in apple and let me just say person lying please stop posting you're what you're doing is is really disruptive to my presentation and i will deal with this as soon as i'm over and as soon as my webinar is over and i can deal with it so please stop posting all right so there's apple nice uptrend confirmed by price action price target at the 150 call wall and also by options trades call buyers and hedging activity all right let's take a look at the next one and here's amd let me just put this back to total and what i saw here was divergent short in the morning let me zoom in so this divergent short in the morning traders were taking negative delta positions and then so price followed actually let me right so they were taking negative delta positions first price followed reversal lower and then they started taking positive delta positions and price moved higher a few minutes later so a couple of good divergent setups both short and long in amd and let's go take a look at book map so here's amd here's that divergent short setup and then the reversal higher just below the call wall 80 call wall and key gamma strike and the move higher there at the 80 call wall key gamma strike all right so there's amd all right the next one that i want to take a look at is google and let's go take a look so there's not a not a lot of range in google and that's pretty typical um let's go take a look at at hero now and what i saw was the the confirmation in the morning so not much of a not much of a setup all right let's move on and the next was meta much much much better setup and let's go take a look at book map now and continued up trend continues up take a look notice the the breach of the call wall here and again i mentioned that spot gamma talked about the call wall and put wall the walls in a couple of recent webinars and including the first subscribers the q and a yesterday and the introduction discussion of the new equity hub hero interface and talking about the differences between call walls especially for indices and stocks and indicating i believe sometimes these call walls the breach of the call wall can actually act as an accelerant i believe that was the word so that appears to be what's happening today there was a brief consolidation at the call wall um or around 10 a.m i've written 945 to 1015 and then the move higher with this primary target at the 185 liquidity and meta continues higher let's go take a look at at hero again so just a nice steady up trend traders are buying calls and that is clearly driving meta higher and again as a stock trader if you're looking for a long this is what you want to look for traders buying calls market makers are selling the calls and they have to buy stock to hedge their delta exposure and as price continues to rise they have to continue to buy stock to hedge their delta exposure right so that's meta great setup today great long all right the next one let's let me skip over that that actually let me zoom in on this and what this what this large line here this vertical line is a large block trade that's a large block trade of call buys that rising orange line and that can make the chart somewhat difficult to interpret right so let's zoom in so that that that is not shown in the picture here and this shows traders are buying calls and selling puts it's not nearly as clear a signal as meta and let's go take a look at book map and there's microsoft quick uptrend to the 255 liquidity there one nice pullback and actually one right after the open with the liquidity target at 255 okay let's take a look at let's take a look at spy actually as let's see if nvidia has straightened out some so this is nvidia let's go take a look at hero for nvidia and yeah that was difficult to interpret this morning and then all around 1150 1145 hero starts to rise and price responds actually it looks like price started moving first let's go back to go back to book map so trend break here reversal higher at the 232 hedgewall and headed up to the 235 liquidity and then it looks like the next level up is right there at 237 so strong uptrend and there's that break that we saw with hero not as nearly as clear as meta and that's been pretty typical of nvidia recently okay let's go let's just take a look at qqq we'll look at qqq and spy and then go to tesla and strong steady uptrend and really not confirmed with hero until about 1045 yeah 1045 11 o'clock let's go back and look at book map so 1045 11 o'clock consolidation around the around the 297 level and then price breaks higher as traders start taking positive delta options positions and let's just see if we can gain any more insight not really so they're buying buying calls and it looks like net net they're still in this few buying puts but buying more calls than puts so the total signal provides more insight here and really it looks like the break occurs right around 1145 let's go back and take a look at book map so yeah there's the break higher uptrend consolidation then trend continues higher looks like heading up to the 300 lg one that's the large gamma one that is the that's an important level one being the most important the largest amount of gamma and then finally let's look at tesla and this was the other than meta i thought the best setup of the day so just looking at book map here and let's i'm going to turn on cvd so first of all the thing to notice is the here's the 193 hedge wall and the reversal at that level the price starts to move higher and then cvd shifts from bearish to bullish let's see around around 11 o'clock 1115 something like that and you can clearly see all the green dots coming in all the market buy orders let me get rid of this so we have more screen room here and then the the price target at the 200 key gamma strike and notice all the liquidity at that level that came in at the open and actually a little bit liquidity uh was in there before all right so let's go take a look at hero now all right so here's tesla and tesla is the stock that has always has almost always has a very strong correlation between options trades hedging flow and price action and let's see what traders are doing and you can clearly see their buying calls that's shown by the rising orange line and they're buying puts too but they're buying calls and more than twice the number of puts that's shown by the notional value on the right and you can see that the the price action shown with the white line clearly corresponds to the calls the orange line traders buying calls and again as a as a stock buyer this is what you want to see traders buying calls market makers sell the calls and they have to buy tesla stock to hedge their delta exposure they want to remain delta neutral all right let me check for questions and stan asks are you trading weekly or zero dt options uh based on this analysis and this is just me uh but i don't trade short term options uh i if i'm i'm using the options market to inform my setup but i personally tend to trade shares for for day trading now that's just me and what i'm showing here can apply to any any approach that you want uh whether you want to trade a buyer sell uh zero dte weekly uh options you know that's that's up to you and your your preference you know i'm showing bullish and bearish setups that again you can take in any any number of ways with uh buying or selling calls or puts uh spreads again i prefer to trade shares okay so you're welcome okay so that is um that's all i have for today i'm going to wrap it up and the let's just we'll take one final uh look at the smp 500 to see if the put vantarelli continues we'll take a look at hero and it looks like price continues to move higher we'll take a look at book map tesla again this was the uh tesla and meadow that i thought the best the easiest to read setups here's the uh smp 500 it looks like the uh es 40 50 is on deck next and the spx 40 50 just above that level and then that uh up above that is the upper edge of the expected move for the week that showed by this purple line okay that's all i have i want to thank you for your uh for watching for your questions and comments and everyone have a great weekend and i will see you on monday thanks again bye