 Welcome 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 go any further, I have 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. Trading futures, equities, and options involve substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. As a reminder, the focus of my presentation and the Options with Doug chatroom 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 step is planning, and I use positional analysis, and I look at how traders and market makers are positioned in the options market, and how those positions change from day to day to help develop a thesis regarding expected trading range for the day and volatility as well as a directional bias. And the second step in my process is real-time order flow, and I look at real-time order flow in Bookmap and Market Maker hedging flow in Spot Gamma Hero. And on-topic questions and comments are welcome, and I will be watching for questions and comments and Discord and the Options with Doug chatroom as well as YouTube. And I see there's a couple of questions in YouTube already, and so Jimmy asked, how do you interpret continuity of market direction with trading options? And I'm trying to understand how today's market direction will continue in tomorrow. That is something that I don't really think about. I day trade, so I'm looking at, I think I have an edge for today, and then I will do my planning process again tomorrow for the following day. So I'm not really thinking about swing trading or holding trades overnight. I do best, and I think I have the biggest edge right now with just day trading, and today trading, getting out at the end of the day, and then reassessing tomorrow. So that's how I'm approaching things right now. And in Discord, SJ asked, is there a Bookmap Advanced webinar on at this time? And it looks like he's not attending the webinar. Let me just type in somebody else may be responding to that. Okay. All right, so Smoke027 responded, thanks. And let me just ask, for those of you who are attending, can you hear me? Okay. All right, so I'm good on Discord, and I see my screen on YouTube, I'm assuming I'm good there as well. Okay, great. All right, so let's get started. And today, the things that I want to talk about are first, okay, YouTube confirms sound is good, I see my screen, okay. So things I want to talk about today, first of all, news items, economic data, as well as events. And then we'll go over our position analysis, and then finally setups. So first of all, let's talk about the news and economic data. And today there were two important drops for economic data. And the first was PPI. And that came out a little bit lower than expected and lower than the previous number. So you would assume that that was a positive for the market, a good thing. And then the retail sales came in, let's see where that is. A little bit lower here this month over month, came in lower than forecast and lower than the previous. So that was the numbers this morning. And the other, there are some economic data coming out tomorrow morning, jobless claims and something else. I don't think that the data tomorrow morning is as important as the data today. And then finally, Friday is the January monthly expiration. And I'll talk about that more probably tomorrow and what might happen. And then during the day, all day today, tomorrow, the rest of the week, they're Fed speakers. Okay, let's go to our position analysis. And I'm going to start by looking at a big picture. And this is the SPX chart. This is in thinkorswim. And I'm using the levels that are provided by Spot Gamma. There's actually a problem with these levels this morning. And I had to change the key levels like the put wall, call wall, volatility trigger. The other levels, I don't know if they're correct or not, but they were not correct in the text file that came from Spot Gamma. All of these combo levels may not be correct, but the put wall, the call wall, and the volatility trigger are all correct. So this is the big picture. Let me just zoom out a little bit and recall for several weeks, SPX was trading in this narrow range and then broke out of the range right at the beginning of January and has gone up pretty steadily until today. So that's the big picture. And that's where the SPX is right now. And let's zoom in. Let's take a little bit closer look. And by the way, on this chart, there were some questions yesterday about some items on my chart that I don't look at. So I clean this up. So this is all that I'm looking at on this chart. And I have a simple line drawing for SPX price and that's shown here. And then the levels and the darker areas are the regular trading hours. And then the shaded areas are the aftermarket hours. Okay, and there's a question and discord. And, yeah, we'll look at hero. So there's a question, what time or when large amounts of puts being bought, calls sold, and we'll take a look at hero. So hero shows that that is the spot gamma hero that is the indicator by spot gamma the hedging impact of real time options. And that shows real time hedging flow market maker options trades and market maker hedging flow. And we'll look at that. And that is something that I use extensively. So again, remember, I talked about I do my position analysis before the market opens. And then once the market opens, I'm looking at order flowing book map and hedging flowing spot gamma to confirm my thesis and to set up and enter and exit trades. So let's take a look at one other thinkorswim chart now. And this is a little bit closer in view of SPX. Again, the same simple chart. The levels on the chart are the SPX levels. And those are the key gamma levels provided by spot gamma. And just a simple line drawing for SPX. And that the previous chart was a 20 day one hour chart. And this is a two day one minute chart. Let's look at, look at book map now. This is the ES, the S&P 500 futures. And the support and resistance levels are shown on this chart. And I have two columns showing levels. And the first this SG, those are spot gamma cloud notes. And they are provided by spot gamma and updated daily. And they are showing levels that are in terms of SPX and then converted to an equivalent ES number. And if you recall yesterday, I mentioned that the the numbers were off. They were using a 25 point difference between ES and SPX. And the point difference was actually closer to 20 points. So I sent an email and apparently they adjusted that now. So you can see that the SPX 3950 is now at the ES 3970 level. So these levels are now more accurate than they were. So again, this is SPX levels and also some combo levels which combine SPX and SPY levels into one level and an SPX number and then converted to an equivalent ES number. So that is the, that's the first column. And the second column, the C levels, cloud levels, that is my, those are my cloud notes. And the things that I note here are first the support and resistance levels that are provided by the spot gamma AM founders note and also key SPY levels. And these are pretty accurate. I, I check that number every day, the conversion from SPY to ES. And then finally, big round numbers in ES, like the comparison level. And then one other thing here, this LEM is the lower edge of the expected move. And that's based on options volatility. That's done. I, I have an app or a script in thinkorswim that I use that provides that number. And I just put it on my ES chart. And JEC ask, can we get a screenshot of your levels? It's hard to read the text. So you want a screenshot of, of ES here? I assume that's the case. Let me clean this up. Screenshot. And I'll post this in Discord. So give me just a moment here. And almost there. Give me just a moment. Okay, hopefully that helps you can zoom in on that. Okay, there's a question. And YouTube, can you share that script with us? And no, I'm sorry, I got that from somebody else. That's not something that I created that is, it's not mine to share. So sorry about that. But it's easy to calculate. If you have a Any kind of options trading platform. Here I'm going to look at. Let's look at SPX. And this may be hard to see. But what you can do is, let's say let's look at January 27. So that's a week from Friday. So if you wanted to see what the expected move is. And I apologize. I'm sure this is difficult to read. It's so small. But if you want to see what the expected move is, right now, from today to the January 27 PM expiration, end of day expiration, the volatility is 16.77%. And the expected move is plus or minus 83.5 points. Okay, so again, sorry, I can't share that script. But, you know, looking at thinkorswim, you can get pretty close. Plus, you can just take the price of an at the money straddle. And that will give you a good idea as well. And that's just the at the money call plus put. And there's another question in Discord. Is there a different room for broadcast or any voice? If somebody could just post and direct him to the options with Doug, live stream at Discord. Okay, so let's get back to the ES here. And the key thing to note is the 400 call wall that is expected to act as resistance, certainly did today, just like it has before. So this is the spy 400 call wall right here, acted as resistance. And we'll look at hero in a moment. And we'll see that there was an indication that traders were already taking negative delta positions as spy was approaching the 400 call wall, making for a great divergent setup. Okay, thank you, JC. So these are the levels in play, you know, again, all the way from the 400 call wall down to the lower edge of the expected move. And that's where price seems to be reversing higher. And, you know, to be honest, there's a little bit unexpected. I was expecting more mean reversion to the 400 level. And I don't know if there was some news item that that might have contributed to this. I, I scrolled through a news feed and, and, you know, saw some fed comments and that Jerome Powell had tested positive for COVID. I don't know anything to do with it. But anyway, it is what it is. So if you look at this just from a strictly quantitative, mechanical point of view, traders were taking negative delta positions as price approached a resistance level. And then that level did act as resistance and price moved lower. Okay, so there were some shifts and levels that were pretty much for the whole I would take as bullish. So the shifts and levels, first of all, the spy volatility triggered, jumped up, moved up just a couple of points, 396 to 398. And then the SPX and spy put walls both moved up from SPX from 3800 to 3900 and spy a pretty big jump from 380 to 395. And then also the SPX call wall jumped up from 4000 to 4050. And then finally the QQQ volatility trigger also moved up, put wall moved down and the call wall moved up. So let's go take a look at the S&P 500 charts. And again, remember, we're still on our position analysis. So these are the absolute gamma levels. This is for SPX and notice the significant amount of call gamma and put gamma at the 4000 level. And that is still the absolute gamma strike. And let me just respond to this and discord. For some reason I'm having trouble. All right, I'm having trouble typing. There's something blocking what I'm trying to type. Sorry about that. If somebody could help SJ, that'd be great. All right, so excuse me. Here's the 4000 level and SPX still the largest gamma strike for sure. And then again the call wall moved up to the 4050 level. And that is pretty small compared to the 4000 level. And there is the 3900 put wall. Okay, now let's take a look at SPY. Zoom in on this. And SPY the 400 level is still the key gamma strike or the absolute gamma strike. And it's also the call wall. So the absolute gamma strike is the strike with the largest absolute gamma or total gamma. And the put wall now at 395 is the strike with the largest negative gamma. And typically usually can be expected to act as support. And it did not today. And then those are the key levels. So 395 to 400. And again I was looking for more mean reversion or pinning around the 400 SPY 400 level or the SPX 4000 level today. And that didn't happen. So let's take a look at the Vana charts. This is for SPX. And actually let's look at the data first. And then the Vana charts will make it a little bit more sense. So what I like to look at is the gamma notional. And that is the market makers position on the gamma curve. And what this indicates is in a, so again that's the gamma notional market makers position. And a positive number indicates that market makers position is positive gamma or call gamma. And in that case they would need to hedge against price action. So they're in a positive gamma situation. They're long calls. And as price increases they have to sell futures to hedge their delta exposure. And just it works the other way around as price decreases they have to buy back, they have to buy back futures. So they were all, that tends to reduce volatility. They're hedging against price action. So that SPX is mildly positive and SPX is pretty negative here at minus 887. In that case that indicates that traders are long puts, market makers are short puts. And this is in the negative gamma region. And that means that market makers have to sell futures as price decreases and as price increases they can buy back those short futures. So they're hedging in the direction of price and that tends to increase volatility in a negative gamma environment. So these numbers actually shifted down or towards negative for SPX less positive and for SPI more negative. So yesterday gamma notional for SPX was 297 and it shifted down today to 161. And then SPI yesterday was minus 580 and it shifted down today to minus 587. And let's just take a look at, let's take a look at VIX. Let me clean that up. So VIX is definitely increasing today. Okay, so that's gamma notional. Let's take a look at Vantage charts now. And I'm just going to compare. This is today. This is essentially yesterday. It's showing January 16th but it should be from yesterday. And that's from Friday. And this is showing, what this is showing is yesterday with a more positive gamma. Remember I said in a positive gamma environment. Market makers, delta exposure increases as price increases and they have to sell futures as price rises and then they can buy back those futures as price decreases. So in this case they are trading against price action and that tends to subdue volatility in a positive gamma environment. And this green curve is showing the current expiration and how their delta notional changes with changes in price as well as implied volatility and that's the VANA effect. And then the black line is showing how their delta exposure changes with as time passes and that's the charm effect. So we see the shift from yesterday to today to slightly, this is really kind of a neutral environment. If you look at the green curve, maybe slightly leaning skewed to the left. And then it's a different story for spy, much more in the negative gamma environment. So in this case market makers are trading with price to hedge their delta exposure. Okay so that's the setup for today and again sometimes what you expect to happen does not happen and that's why I always say I confirm my thesis with order flow and hedging flow. Alright so let's take a look at some setups. So the first thing I want to look at is SpotGammaHero and this is ES and this is showing options trades and market maker hedging impact for SPX and spy trades combined into one signal. And this is showing accumulative hero signal for the entire day and what I want to do is zoom in on the morning and this reversal lower and this is showing the price action in terms of spy. So recall here, I think it's this line right here, that's the spy 400 call wall. So this morning as price approached the 400 call wall, traders were already taking negative delta positions. And this is pretty typical in the S&P 500 seeing that traders are essentially fading the moves. So as price moves up to a key level especially like the 400 call wall, they are buying puts and selling calls. So we can see what they were doing so they were buying puts and that's shown by the following blue line. So as price was moving up they were buying puts anticipating a move lower and market makers responded later at the 400 call wall. So this is an absolutely great hero divergent setup in the S&P 500 and this is one of the best setups of the day. There were a couple of others but seeing this, seeing this great divergent setup, this is far as I would go for the day. This was it, great setup. It went down a lot further than I expected. But let's see if you bought a put here, zoom all the way out. Now it looks like traders are fading the down move and that's pretty typical as well but let's look at spy and book map. So let's say you bought a put somewhere up here. You saw the resistance at the call wall, saw other traders buying puts. This break of this trend line here, all the aggressive sellers coming in, see all the big pink dots, those are sell market orders. Buy a put up there, really never any reason to get out of your put. You might have considered scaling out of the put wall which is often acts as support did not today. But this turned out to be a great, great short setup. Let me check for questions and Adam be asked how do we add spot gamma to book map? I'm already subscribed to spot gamma. Then what you need to do is just set up cloud notes. So you go to your portal and I use this right here, book map cloud notes. And there are instructions and the files to load. So just click on that link and you should be able to get the cloud notes. And JC asked how would you participate in a put? And I would just buy a put. And actually I have started, if you wanted to go short spy or ES, there are a number of ways that you could do it. You could buy, buy a spy put, buy an SPX put, sell futures, sell spy shares, a number of ways. Or the driver says, Doug I caught that move thanks to you. If you bought a put at $1 it was $6 or more. And JC where would I locate my stop? If I bought a put I wouldn't have a stop. A put is a defined risk trade and there's, you know, I don't use stop orders for single defined risk option trades. And if I was trading spy shares, for example, I would, I would put a stop somewhere just above this 400 call wall. So if, you know, if I sold spy shares down here and price increased above the call wall, then I would know I'm wrong. And JC, yes, that's correct. I do not use stops on options. And yeah, I, you know, you can just get out it, but again, options are defined risk and I would buy, you know, typically go for the expiration today. So that's, you know, there's not a lot of risk just buying one put. And James asked, how do I access the Discord channel? Just go to bookmap.com and you should find a link for Discord. You join Discord and then you'll see my room in there. Yeah, the, again, the, you know, whatever, whatever stop you want to use on an option, if you want to, if you want to get out, I kind of like the approach of, you know, again, letting an option, letting an option run. And I would say that buying a put is a little bit different than selling a call. If you just sell a naked call, you have undefined risk. So in that case, I would, I would watch that more closely. And I think in this case with implied volatility so low and price up at a high level, I think buying a put was the, was the correct play. You know, I would tend to want to sell, sell options in a high IV environment. But today the implied volatility is so low that I have been buying options. And yeah, the selling a naked call requires a lot more margin than, than buying a put. And JC says the put wall did not act as a support. Right. So yeah, like I said, if you bought a put up around the 400 to 399 level, there is absolutely no reason to, to get rid of it until maybe now. You know, again, looking at spy coming close to the lower edge, the expected move. And Kenobi asked when buying the option, do I buy at the money or a specific strike? And I am looking at that now. And I, what I'm looking at, I guess the, the kind of set of rules that I have seen is if I'm looking further out in time, I'll buy a little bit higher delta. And on a zero DTE option, I'm going to buy an at the money. And that's going to give me the greatest amount of gamma. So that's a good way to go. I mean, if you want a, if you want to trade a zero DTE, that's an option that expires today. The best approach is to look at the, the around the 50 delta, the at, at the money. And that's going to give you the most bang for your buck. That has the highest gamma. And that's the rate of change of delta. And that's what you're looking for. All right, let's take a look at some other setups. Next one I want to take a look at is Moderna. And this was a pretty interesting setup. And I have data from yesterday here. So I don't know if anybody saw the news Moderna had an announcement. This is yesterday, just after the close. And they announced some positive news about one of their vaccines. Anyway, the, I guess the results were better than expected. And traders reacted very positively buying Moderna up from the close at about 191. All the way to 203, 204. So about 13 points higher. And then Moderna gapped up this morning. Jumped all the way to 207 and then reversed pretty much with everything else today. And just looking at order flow. You can see all of the market sell orders coming in, all the pink dots coming in on this trend line break. And let's take a look at hero. Let's go to Moderna. And there was a really a confirmation price reached that level. And then started moving lower as traders were started selling their calls. So initially this morning traders are buying calls and that's shown by the rising orange line. And they started selling calls and price moved lower. And the next one that I want to look at is NVIDIA. This was a great setup. Zoom in on the morning a little bit. And notice the divergence here. And first of all, let's look at the total line. That's the purple line showing combined calls and puts. Notice it's making lower highs. As price is making higher highs. And then price starts to move lower. So a great divergent setup short here in NVIDIA. And you can see separating output and call transactions shows you that traders were buying puts from the open. And that even makes this divergent setup more clear. All right, let me look at questions in YouTube. And James asked, how do I use hero in real time? I'm showing that right now. Or I'm showing how you could have used it this morning. So JC asked or says, I understand what you're saying. My concern is, for example, if you saw the call wall and bought a put and the price goes against you, you take a loss. Trading is not 100 percent. You know, sometimes you do have to take a loss. Sometimes you do have to take a loss. But I think that what I'm showing provides a pretty significant edge. And you know, just take your time paper trade. You can, you know, if you want to trade stock, trade one share, 10 shares or paper trade until you understand and gain confidence. What this is showing you and how it works. And again, if you're buying a zero DTE option, it's the, you know, the cost is low and you don't certainly don't have to take a 100 percent loss. And we'll take a look at an options chain in a minute for DD rover. Thanks for your support. I really appreciate it. It sounds like this has been quite a benefit. Okay. So this is the Nvidia setup. Let's go to, let's go take a look at the order flowing book map and pretty similar to a lot of the other stocks. Turn break a retest. And this is above or at the upper edge of the expected move and then the reversal lower. The S&P 500 setup was better, but this was another, another great divergent setup. And again, the spy ES setup was a lot easier to read because of that expected resistance at the 400 call wall. There's Nvidia. And let's take a look at QQQ. And there's the order flow. Again, pretty much the same setup that the move up in this morning, this morning, then a reversal lower. And here at the 284 C3 level, that's a combo three level. And that's in the middle of the range. C1 is the, the most important level like this LG one. That's large gamma one. And the C3 is a combo level, which combines QQQ and then DX options. And the NDX options are pretty much insignificant. So that's essentially another QQQ level. Price is reversing between there and the LG one level. Lake to lower high and reverses lower. And let's take a look at hero. Go to QQQ. And this is, let's look at the morning. So this is a little bit of a divergent, just looking at the total signal. Hero starts falling before price falls, zoom in a little bit more. Let's separate outputs and call transactions. You can see that a little bit more clearly that traders started buying puts and then started selling calls and price moved lower a few minutes later. Actually, I think it's a little bit more clear with the total signal here. So again, looking at the divergence and comparing this to spy, the setup was not as clear because again, there wasn't a level that was expected to act as resistance like the spy 400 call wall. Okay, let me look at more questions. And there's a question. Do I think people who shorted the 400 call wall will exit their position before the end today? Well, hero is showing, let's go back to, let's go back to spy. And what a hero is showing is that really since just between 1030 and 1045 that traders are buying calls. So they're not exiting their puts. The blue line continues to slope down and they started buying calls. So this is what hero is showing. So maybe if they sold calls, they're buying down. I don't know that, you know, here's the, this is a positive number. So net, they're, they're buying calls. I'm not sure why, but that's what this shows, you know, that the trade was clearly to buy a put, hold it. And it depends. Some may pull, may trade, may want to hold them overnight. I typically, again, I think I have the greatest edge at day trading and I would look to exit. I probably would have exited already. Or at the end of the day at the latest, you know, especially if you buy a zero DTE option, you have to get out at the end of the day. Let's, let's take a look at Tesla now. That's the last one that I wanted to look at. Let me, let me check for more questions. Yeah, good point, JC. You know, you don't have to, if you have a price target, get out. Here, you're not going to, exactly, you're not going to collect max profit every time. You know, set a price target and you know, good or scale out at least. So if you bought, bought more than one put around the call wall, then the put wall would have been a good time to scale out and then hold on until the end of the day or in less price increased above the put wall. All right, let me check. Let me check YouTube and ancient the architect. Thank you. And hero with book map is a deadly combo. I agree. So it, it all boils down to levels and what you expect to happen at levels. And then the order flow shown a book map and the hedging flow shown in hero. Okay, I'm reading through questions and comments and YouTube. You know, actually RTRTS, I want to buy options with this method. Is it safe to buy zero DTEs on any given day? I'd say yes. Like, for example, yesterday, I posted a trade in discord on Tesla and the trade. My trade was a long call, even though the implied volatility and implied IV ranked for Tesla was, was higher. Let me just check that. Let's see what I'm going to look at another screen and check the IV percentage for Tesla. So the, and this is today, the IV percentage, meaning what, how does IV fall in the, in the range that's calculated by this IV percentage number? This is on thinkorswim is over 50%. Whereas for spy, the IV percent is less than three. So spy, the implied volatility is definitely on the lower end of the range. And that is one reason that I would certainly favor buying options in spy. But I think if you're trading zero DTE, it doesn't matter that much. Or if you plan to get out at the end of the day, as long as you expect a decent amount of movement. And if you, if you don't belong to discord, you can take a look at my post for Tesla yesterday and Twitter and see my, it was a pretty simple setup. And there's a question, can I show the last 30 minutes for spy hero, yeah, let's, and that is a good question. And what I'm going to do is whenever you see hero leveling off like this. And again, remember this is a one day, this is a cumulative of what hero has done for the entire day. And when you see a kind of flatlining like this, it's a good idea to change the rolling window to a shorter time period. And I usually go back to 30 minutes so you can see these waves going up and down. And that gives you a better indication of what's going on. And again, this is looking at the last 30 minutes of data and RT, RT, you're welcome. I'm glad you find this helpful. Thank you very much for your kind words. And JC asked, can you show where do you go to see hero? So you have to subscribe to spot gamma. And for hero, you need an alpha subscription. And spot gamma does offer a free seven day trial. So just go to spot gamma dot com and sign up for the seven day free trial. And that will include hero. And I suggest to be able to take it full advantage of that. Maybe watch some of the YouTube videos on the YouTube channel. SpotGam has a great YouTube channel and then you can watch my videos. I use hero every day. So again, if you want to take full advantage of that trial, you may want to do a little research first. I'll change this back to one day now. And FortyDrover asked, can you get various levels of spot gamma? Yes. I believe they offer a standard pro and alpha subscription. If you want hero, and I think hero provides a significant edge, then that is in the alpha subscription. And yes, I think there are other competing services. SpotGam is the one that I use and I think it provides great information. Again, that provides a significant edge. And I use book map and spot gamma. And those are the only tools that I use. So spot gamma alone would not be enough. Again, I use book map and spot gamma. And those together, working together, provide me with everything that I need. Okay, my time is up. I think that's it. I hope I've answered all your questions. And again, sometimes price does not act as expected. And that's why you always want to confirm your thesis. I always confirm my thesis with order flow in book map and hedging flow in hero. And taking that approach, there were some great setups this morning. We saw that the best setup I thought, given the confluence of the weak hero signal, the traders buying puts and the expected 400 call wall resistance provided just a fantastic short setup. And then also the divergent setups and NVIDIA and QQQ. But again, my thinking was the ES and SPI was the best setup of the day. So anyway, that's all I have. And again, remember, Friday is monthly expiration and we'll touch more on that tomorrow. So again, thanks for your questions and comments. That's all I have for today. And I will see you tomorrow. Thanks again. Bye.