 All right, good morning traders and welcome to the pro trader webinar as you know all this week It's been a focus here on options. So Today we have this week. It's been We've done a few webinars with him in the past and maybe you guys remember Doug He's been heavily heavily involved with the Spot gamma guys or in options doing the You know looking at options and the hero indicator that's within book map from spot gamma and then Looking for edges with that That indicator he had a great webinar. I'll put it into the chat like a couple weeks ago, I think Doug and It was excellent on this kickoff strategy. So This this week as the options You know focus on the pro trader webinar We had Brent Kachuba from spot gamma on Monday and he talked about a lot of different interesting things I think what Doug wanted to show here was also regards to Opportunities in the order flow from those Some of the Concepts that Brent was talking about because some big moves happen that Monday right in line with what? Brent was talking about so Let's get involved in here. Doug's well got a kind of a long along Intro here or biography. I've been trading options from around 2008 selling premium He's worked with a lot of different people from mentors and then After being introduced to trading futures in 2019 he went deeper into the futures markets and order flow and then discovered in early 2020 the spot gamma And has been working More in line with the back into the options where he previously came from so He's on Twitter. He writes articles for spot gamma, etc. He's in our discord channel here and We have all sorts of stuff here with Doug and want to do more with Doug so I have his Twitter his spot gamma articles and his Spot gamma article for presentation. I'll put put all of these into the chat for you guys. You can go back and look at these As well as the webinar that he did with us a few weeks ago General disclosure got to go through these disclosures over to Doug All book map 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 digital currencies Involves the substantial risk of loss and is not suitable for all investors past performance is not necessarily indicative of future results Doug take it away. So let me pop out the screen here and Let you Go for it here Okay Are we all set? We are all set Okay, how's my volume? You're great okay What I want to talk about today is my options based approach to day trading futures and stocks and that means I look at how traders and investors are positioned in the options market and how these positions shift from day to day to plan and prepare for the day and also to Make trading decisions during the day and just to be clear. I do trade options I sell Strangles in the S&P 500 These are long-term far out of the money calls and puts and I have a very Specific plan for doing that. That's kind of beyond the scope of of this presentation. Although I do Look at the spot gamma levels and the order flowing bookmap to Place those trades during the day or leg in and leg out of of trades and What I want to talk about today Are first my key tenets and these are my core beliefs that that kind of guide my trading and I'll show plenty of examples of these I've got three core tenets and I'll show Show examples for each and then I want to talk about my approach to trading and This will be a review of a presentation that I did About a year ago where I covered this information And then finally the third thing I want to talk about is the trade example and as Bruce mentioned I want to talk about the ES On Monday and this is a follow-up to the presentation that that Brent did for spot gamma and he laid out the background information and the thesis based on Based on the options and options expiration The main monthly expiration last Friday and then I want to follow up and show how that day played out And how well that thesis worked out for the day So first my key tenets the first one is that options trading and the resulting Market maker hedging activity is a key driver of order flow and equity index futures ES and NQ and many stocks and that doesn't that doesn't work every day all day for every every stock and Index future, but it it it does work consistently And in the second tenant is price seeks liquidity key gamma levels and those are the Gamma levels based on What spike gamma Indicates and then round numbers and finally this is a new one Confirmation leads to trend continuity continuity and to be honest I learned that somewhere else, but it's It I'll show examples of that and show how how it works. So let's take a look at Some examples of the first first key tenant here and Can everybody see the screenshot? Yeah, looks good. Okay This is Let me go back Zoom in just a little bit What we're looking at here is spot gamma hero. This is a web-based version of Spot gamma so there's book map hero and that was the the original version of hero and hero stands for hedging impact of real-time options and this shows How traders are Trading calls and puts during the day and then market makers have to respond With either buying or selling The underlying to hedge their delta exposure as an example Let's say traders are buying calls Market makers sell the calls and that is a negative delta position and they want to maintain Neutral delta so they will buy the underlying buying the stock Or in the case of futures, they will buy ES for trades and SPX and spy to hedge their delta exposure the One nice thing about this Spot gamma hero is that allows you to separate Puts and calls so you can see how traders are Trading puts and calls and we'll we'll see that in a minute and then this and this first example here this is showing a Combined signal of calls and puts and As you can see there's a very close correspondence between the the market maker Or the options trades and the market maker hedging activity and price and You know and here it's actually somewhat of a leading indicator in the first few minutes as price rises and The options trading are neutral to starting to be bearish and Here's another one for AMD AMD is a stock that I follow that responds very well to Options trading so I have a number of examples of AMD Here this is showing the separation of call and put transactions and you can clearly see that the call transactions traders are buying calls and this is Driving the stock price and this is a very powerful Driver of a price action You know again going back to my example traders are buying calls Market makers are selling the calls. They have to buy by stock to hedge their delta exposure and this this can turn into a a Kind of a feedback loop that continues and continues and the thing about Traders buying calls or buying puts is there's no limit to the upside so it just keeps going and going and again a very close correspondence between the call buying and and The price action and you can see when that when the calls drop off here for example the price Price stalls until the Options trading gets going again Here's an example for meta one for Microsoft Microsoft is kind of on and off it it sometimes responds to Options trading sometimes not so much but here, you know, it's clearly responding to traders buying calls Nvidia is another stock that responds very well to Options trading activity and you can see here as soon as the the call buying gets started price Price jumps pretty sharply Another one for Nvidia again a close correspondence between price action and In options trading What what I've showed so far is is one way that I Use hero and that is for a confirmation Kind of a corresponding Something that corresponds directly to price activity What often occurs in QQQ and spy the the index ETFs is Hero can act as a leading indicator and that's a another way that I use hero and here's an example in QQQ showing a very clear lead between the options trading and And a drop in price So you can see here that traders are Selling calls and buying puts from the open and price rises up to Well, it looks like about 1015 or so and then starts to respond to the options trading activity And it also looks like the options trading here is leading a reversal Around noon So this is clearly an advantage when You know if you're trading yes or in queue or or spy in QQQ So Doug Yeah So some of those other examples, I mean they were trending very nicely together right here. It's not And this is where you're looking for your edge. Is this your back to your kickoff strategy? Yes, this is You know part of the kickoff strategy again for stocks almost always Hero acts as a a corresponding confirmation You know almost a one-to-one maybe a little bit of a lead Driving price action a confirmation And it can do that in QQQ and spy but it Well often or it can act as a leading indicator You just have to be patient and wait for your wait for the signals that you see in book map to Take the trade so you know looking here You know you would And I don't have the a screenshot of of QQQ or in queue for the day but you know seeing this here you would just wait for Wait for a signal and you'd have to wait pretty patiently you know almost an hour before this played out and You know again, I'm sure there were you know pretty you know pretty good signals and and Book map showing that this was a top and you know you can you know Even if you wait to hear and see a lower high, you know, this would be a good good entry point And here's an example in spy showing hero to be a confirmation here and then You can see that it It slows down levels off and then starts to fall lower Before price drops and then starts to rise again before price reverses at this 410 Key gamma level it's the put wall Which often acts as a support level also the key gamma strike in the hedge wall So this is you know just a clear clear signal of a of a turnaround so once you see this see hero rising and then price heading down to this key gamma level the Key is to just wait until you see the reversal at this level and then then enter long and again, this is spy and This this is the more This is the behavior that I'm looking for From hero and the options market in and spy and ES as a leading indicator What what I mean, I just love I loved your previous presentation On that kickoff strategy. I mean the simplicity and clarity of it is is brilliant I'm just I'm wondering like when you're looking at book map in the order flow What kind of time frame are you looking at? You know, like are you kind of zoomed out a bunch? or I Mean that kind of clarity in the order flow has to be there I I I prefer to stay zoomed out a bit. I I Really don't scout that much. So I I look at a larger time frame. I may trade spy. You know, I trade spy quite a bit my my core position like I said is is Selling strangles and spy and then I may scalp around that during the day or you know trade around that during the day, but You know, so I I prefer to stay zoomed out a bit and and see the bigger picture and This is another example and spy showing Trader selling calls So pretty much from the open from 935 On on through almost noon traders were selling calls and eventually spy rolls over in Correspondence to that. I think you know, there are a lot of other I mentioned in the webinar that I did a few weeks ago that that ES spy and SPX You know, that's a complicated product made up of of those three products the S&P 500 and You know, there's a lot going on and sometimes it seems to take a while for Price action to respond to the options options trading But you know, again, here's another example showing this options trading activity as a leading indicator for a move down and then here's Tesla and Tesla is a stock that responds almost one-to-one tick for tick with with options trading activity and I I think that is because market makers must respond instantly to With their hedges to options trades. All right, so that is different from others though Yeah, so that Well, I I think it's most prevalent and the stocks that I follow in Tesla the one-to-one tick-for-tick correspondence with with market maker With options trades and market maker hedging activity Hmm, so then I'm just kind of curious like then do you feel like with the indexes that They just kind of let it they don't I mean, maybe they'll just kind of hedge it a little bit later or I Don't you know, maybe Immediately, but it goes against them and they don't care. I mean, I Guess that's the thing and maybe it takes Make it takes longer to to turn around a big ship. I I that That behavior that leading indicator Occurs most often and spy and ES and then after that Maybe a little bit less prevalent in QQQ But it is a it's something to watch for in and spy and ES Okay, so those were my examples for the first tenet Again Options trading and is a key driver of order flow the second tenet price seeks liquidity key gamma levels and round numbers and I have some examples there and this The liquidity is very apparent in stocks, that's one of the advantages of trading stocks with book map you can see the the resting liquidity in the order book and and You can see here an apple that this liquidity comes in right at the cash open and price keeps going up to each level until finally it's absorbed at 158 so the the targets in and stocks are often very clear and this is Another AMD example and this is from Wednesday the right after the FOMC announcement and press conference and What's interesting here is that immediate? AMD drops down to the put wall, which is Typically considered a sport support level and also the liquidity at that level Shoots up to the call wall and the liquidity at that level the call wall is a resistance level and Then goes back down to the put wall You know just a great great setup there knowing those levels and So again, that is from from Wednesday the FOMC announcement and press conference this is for ES and And these I'm showing Two levels of notes and lines here These are the spot gamma levels that are provided in the cloud nodes by To spot gamma subscribers And then I have my own notes here That I that I add so this shows price reversing at the Quiddity and this gamma level is combo combo l3 level. It's also SPX 41 50 and Also ES 41 50 so this kind of cluster of levels and the quiddity and then price moves up to This cluster of levels 4300 Then the SPX volatility trigger and the spy volatility trigger so You know all those levels were in play Here's another example for ES In these spot gamma spot gamma provides Notes for their subscribers one in the morning and that's what I use for my planning Along with some other things that we'll take a look at with that example Some other information One of those pieces of information is support and resistance levels Based on the the gamma levels so here this this example shows price reversing lower at this call wall resistance level That is SPX 4,000 it's also close to This is the you contract close to ES 4,000 Reversing down to the support level at 3950 that's SPX 3950 Also noted as a support level As well as the liquidity at the round number level 39 ES 3950 One more example for ES and this shows This is also from Wednesday post FOMC announcement showing price Rocketing up to the Resistance level here again a level noted as resistance in the AM note and then going down past the support level to this next level this Combo level close to SPX 3800 and here this is the Z contract and now there's more of a difference between the price and ES and SPX currently spot gamma is showing that difference at about 16 points and Here's an example with meta showing Price reversing at the liquidity at the 171 level heading down to the liquidity at 168 and An example for Microsoft showing price heading up to this High liquidity the highest liquidity shown here at 265 and being Absorbed and reversing lower so a very very clear easy to define price target for running long entries and Also these some of the many of these as examples illustrate more than one key tenant and here this is showing that Hero rising at the same time indicating that this Price action is being partially driven by options trading and market maker hedging activity Nvidia also from From Wednesday Kind of the same sequence Price rockets up to the call wall resistance level also this high liquidity at that level and then that drops right back down an example for spy Spy responds generally responds very well to round numbers and also You know it trades one for one with with ES and XP SPX so here I have the SPX resistance level marked on this chart showing a clear reversal there and then down to the 380 key gamma strike Doug can you zoom in just a little bit more yeah on these just one more maybe yeah, that's good Okay, yeah A question on on some of these like I'm just really curious. I mean you've looked at and traded this for Quite a while now So the in the Tesla example saw kind of one for one right and movement of hero real-time options impact and Then and price action so Some of these other stocks you you kind of you don't really see that the index is a whole nother thing right so does that mean that then I guess suppose that The conclusion would be or deduction would be that a lot of people are trading options in Tesla. I Yes, I think that price action and Order flow in Tesla is largely driven by options trading and market maker hedging activity That would be my conclusion Yeah, of the stocks that I follow that are mainly the big cap tech stocks Tesla is the seems to be the most Most driven by options activity other stocks that are reliably driven by options activity our AMD Nvidia I Would say I would put those on the next level then Apple and Meta So I you know, I think all of those stocks are generally pretty reliably driven by options trading interesting Okay, thank you Okay, and this example It all show it also shows my first and third tenants This is showing Confirmation leads to trend continuity. So in this case hero is acting as a confirmation At least until about right here When it starts to kick up and then price levels off and I don't have the rest of this but I wouldn't be surprised if price Started to rise after this and it so You know all all three tenants are in play here and this in this setup and Another one for Tesla Again all three tenants and play here First is options trading Driving price action you can see with the hero dropping The second is the Liquidity level Acting as a target and this is You know clearly the most liquidity on the board here at 280 and then finally confirmation both CVD and hero dropping and the you know the Only thing you have to do is figure out where to get sure here and that's You know, you know, there's some pretty clear pullback entries often to To these round number price levels and that is the last example for my second tenant and then again the third tenant is confirmation leads to trend continuity and I've got more examples Again AMD and Here I'm watching hero, that's the green line and cumulative volume Delta CVD and both both rising as Prices rising you can also see all the green dots showing that Here that shows that options traders are are buying calls and selling puts and Then aggressive traders Are buying and then market makers are buying stock also to hedge their Delta exposure So I you know, I want to get in get in on the uptrend Looking for pullbacks to get in on the uptrend when when all those are in place So I'm you know looking at these not as indicators, but as Something that confirms what what traders are doing Again options traders are bullish Trader aggressive traders are buying and market makers are buying to hedge their Delta exposure You know, I want to get in get in on that Another example with AMD. Sorry about all the AMD. It just it corresponds very well to To these tenants and one more with AMD and here's one with Amazon again showing bearish activity bearish options trades aggressive sellers and Market makers selling stock and a you know, clear clear downtrend And actually this is from this morning showing the clear downtrend in ES toward these two gamma levels the put wall which Has acted as support today Though it hasn't price has gone down lower. Sorry about that It was acting as support here But you know showing hero going down CVD going down and this is You know ended up about 7 20 a.m. Before there was much stop and iceberg activity, but you can see them coming in As price price reaches these support levels, here's an example for Metta Again showing the clear rise in hero and CVD and price corresponding Doug on these examples that you're showing I'm Just to just to clarify on it like I mean you you see this all the time Is that correct? Yeah You know not not every day and every stock and But it's something that I look for when I'm trading stocks Yeah, okay, because like what I'm I guess the point I want to get across is that these aren't like cherry Pick type of things that you're you're looking at you you you see this all the time Basically, I mean well they they are picked to to illustrate This example, so I you know again I Not not every stock every day will look like this and there there could be a divergence between CVD and hero and If I have two stocks that I'm considering trading and I see one like this and One stock chopping around or You know with price action not necessarily Corresponding to hero and or CVD. I'm going to pick the first stock with where there's correspondence. So You know you've heard traders talking about a plus setups well in my You know my opinion. This is a plus setup where Again options traders are Entering bullish options trades Aggressive buyers are buying and market makers are buying. Yeah, I just want to look for a pullback to to get in on this uptrend Okay, I see So, I mean I know that you've covered it many times and and that you I mean I see the images all the time I just wanted to get the point across or Ask about like how often? You know you see this and it seems to me quite often by the number of images that you're posting Well, these images I were all Occurred within the last I I'd say from beginning of August, you know I I look back that far to pick out these examples So, you know, I found 30 examples of these tenets in the last Last month and a half or so Okay. Thank you another one for meta again Rising CVD and hero rising price action price targeted the high liquidity at 170 QQQ reversing at NQ the round number 13300 and the downtrend following CVD and hero We've already I've already looked at this example of up Tesla Again, I think I mentioned that it was showing all three tenets here and Bruce you'd ask about zooming out and and this This behavior becomes more apparent when you when you zoom out to this level You know, you can see the trends and price and also the CVD and hero more clearly When you when you zoom out a bit. Yeah I think you went over it last time Doug I know you're going through your tenants and showing this and proving the point I'm wondering though like You did it before Like kind of going over where you how you manage your trade where you're looking to get in and I know where you're looking to get Out at the at these key levels right, so I You know, I'm looking for a Trending stock if I'm trading stocks looking for a trending stock Stock and then looking for a pullback to enter. Now. Let's go back Just test for example here, so I'm waiting for Here's a good one right here, so a sweep up into this key level to 85 and You can see the you know the buy sweep and the passive sellers absorbing that sweep then all of the All of the pink dots Coming in and that's a you know clear entry cycle and I can see that Hero is starting to drop CVD continues to drop and I've got a price target below That's what I'm looking for to enter. Here's another pretty clean entry here this pullback into 284 and then the The pink dots coming in in this example here would would you be Scaling in maybe I know I don't scale in I I enter All shares at once and I scale out That's how I trade So those were all of my examples for The three key tenants Bruce I'm not looking at discord. Are there any any questions? Let me take a quick look No, I think we're good in discord and in YouTube Yep, some questions in here Do you typically use weekly or? You know the zero zero day options expiration For your a plus setups Well, I Mentioned before when I trade options. I trade far out in time far out of the money. I trade 90 day I sell 90 day plus options far out of the money and in spy and I at the end I can I can take a look and think or swim and show you what I'm doing in In the in spy. So I I really don't pay any attention to Short-term options. I think that that is not a I well first of all, I don't buy options the only The only time that I buy options are Spreads to shorter term spreads to hedge my longer term shorts and And I'll show an example of that. So I you know again I when I at the examples that I looked at for stocks, I prefer to just trade shares I There are disadvantages in my mind. I I was trained as a premium seller and I in my mind there are Disadvantages to buying short-term options and this very very Strong disadvantages to shell selling short-term options. I think it's very dangerous right now That's why I sell long-term far out of the money options but I I Would consider buying a put under certain circumstances. I would never buy a call They're just too many factors working against buying a call number one is time decay number two is volatility typically when You know as Brent talked about on Monday options are Option prices are affected by the price of the underlying and time and volatility so as typically as price rises Volatility decreases and that takes away from the that reduces the price of options and There's also time decay. That's why I sell options rather than buy options that time decay is working for me not against me So, right understood. So, I mean your approach here is very and not to Or your trading style here is very different in the sense that you're really not trading options, but you're using the options information here To base your trading decisions of the underlying right that that may be a little bit difficult for some people to or get used to or understand but I you know going back to my key tenet that that The options market is the key driver of price action in in many stocks like Tesla and also futures You know traders are positioning themselves in SPX and spy options and this is driving a lot of the order flow and ES Okay, great Is that it for the questions that that's it so far. Yes, okay. All right, so let's take out I just want to do a quick review and then I really want to get to the example from Monday So let's just take a couple minutes quickly. So my approach I develop a thesis and that is You know, I do that every day and that's based on the information That I see in spot gamma basically I read the the morning report I look at the equity hub that the shifts and the key levels and Also the Vana model and we'll take a look at all that in the example and Then I look for Trending stocks we talked about that targets talked about that and we've also talked about the trigger the pullbacks often to key levels. So first of all the thesis for the day. I I Anticipate you'll come up with the anticipated volatility for the day the and then a trading range and then directional bias based on the information that I see in at spot gamma and Here's the again the basis for my thesis spot gamma Founders note in the morning and the key gamma levels for SPX and spy for Trading ES and NDX and QQQ for trading NQ Also look at the high liquidity levels I take a screenshot every morning before the market opens and look look at where the liquidity is Is set up and then for spy and QQQ that really doesn't come in Until after the market opens And also the Vana models and finally the equity hub. I look at SPX spy and QQQ I'm kind of curious how how do you Like in the examples that the these really great examples you showed these are all big pretty big trending days Uh-huh not all of them But many of them How do you stay away from like? Oh, you know, it looks like it's starting to trend and You know, you've got Many of your key tenants kind of aligned, but it just chops instead You know, I guess that's why I have More than one stock open in bookmap and I keep the same stocks open Here's let's take a look at Bookmap so I you know, I have all these stocks available and I can You know quickly scan through stocks and see see what's what's working. What's not so for example here and and You know, I'm Definitely bearish today. So I would I would quickly scan through these and and look for stocks that are Down-trending and and you know, I With corresponding CVD and hero matching Yeah, so so that would be kind of like a pullback there in your Amazon. I think Current at current market Yeah, this would be You know, here's first pullback to pullback to VWAP I see, you know, it looks like things if Price is kind of leveled off and in a lot of these stocks So may not be an all-day trend and Microsoft even rising a bit and video looks good there Yeah, so QQQ here. I probably would have stayed away from this Seeing how hero is rising take a look at Tesla If you're training stocks, this is Looks like I need to update my price lines here so this is the stock you wanted to be in this morning and What let's just take a look at So how you could have potentially prepared for that see if there are any shifts so here is one one bearish signal is the put wall shifting down to 280 and Let's see This this is something that and I won't go through this now, but this is something that I'm Spot gam is put together to show these option wall put wall and call wall shifts and showing how You know, that can be an indication of of price action. So I would You know in my morning preparation I would see this and I I Didn't have time to do all that this morning but typically I would note this on the chart and see this and You'll put that down as a You know stock of interest for a short based on this Put wall dropping from 290 to 280 and Plus Tesla is very volatile. It moves around quite a bit. So that's it for the thesis trend You know again, I'm looking for a trending trending stock target really talked about that that liquidity Mainly in stocks and also es Liquidity is not very apparent and in spy and qqq key gamma levels are apparent in all Indices and You know futures and stocks and then round numbers as well and one thing to keep in mind is that es Response to spx and spy Round number levels and that's why I put those levels in my charts and Then finally trigger reversals pullbacks trend breaks You know also in spotgam, I'm looking for looking at the shift in volume dots For es and nq looking for stop in iceberg orders absorption liquidity imbalances and Shifts in the order flow and hedging flow Okay, were there any any more questions about that? Okay, I guess not No, they Bruce East not regarding it. I'm asking you for also trade crude oil, but yeah, no, no, I don't I have no edge in crude oil that I You know, I don't even know I don't well hero does not work for for crude oil I just I have much more of an edge and stocks and Es so that's what I what I stick to so let's now let's get to the third item in the agenda the trade example for last Monday and Again, this is a follow-up to Brent's presentation on Monday Where Brent presented the background information and laid out a thesis and then in this example I will show how that thesis played out and then a couple of trade setups based on that thesis and Order flow and book map and also the real-time hedging flow So just as a reminder I Brent's thesis and this is all based on information in spot gamma that SPX and spy options are dominated by puts and that means that traders and investors are long puts and what What money managers often do Is they will they have a basket of long stocks and they will buy a certain number of SPX puts to hedge their portfolio and Then market makers sell the puts so the market makers are short puts and they have to short ES to hedge. There's no other way to hedge SPX and The monthly expiration was on last Friday 916 so a lot of those puts expired on Friday and that means on Monday that That a lot of those puts were gone both in SPX and spy and the market makers can buy back their short futures After expiration, they're no longer needed So let's take a look at At the morning report This is for Monday morning and there's some key Can key information here again, this is for Monday morning in this example One one negative thing here one bearish thing is the SPX put wall shifted down to 38 But on the other hand the spy put wall held at at 390 So the first thing of interest here to remember is that The note also shows resistance at 3900 and that will come into play later on and Also, another note of interest is Britain is anticipating that traders would sell short dated Pre-foot pre-fed before Wednesday, you know either Monday or Wednesday expiration Sell these puts and that should help support the market. So again trader sell puts market makers have to They buy the puts and they have to buy Buy ES to hedge their delta exposure Then Brent also prevented presented the stats for The average weekly return Before expiration and then after expiration now I And I also use this information to hedge in and out of Some strangles and spy But you know the key thing to note here is the one week after expiration Friday for 2002 the typical weekly return is 2.3 percent 2.37 percent now that hasn't worked out this week past Monday Because of the FOMC, you know the big macro event You know kind of kind of played into that So That is the information that was presented in the in the AM note and I was You know bullish looking for long opportunities so just to verify that This shows this is from the spot gamma equity hub and this shows that the options in SPX were dominated by put gamma by puts Showing the difference in the put gamma and the call gamma and the same for spy and one thing to notice here is the gamma levels are Larger in spy than SPX That's one reason that I often look at at spy to guide trades and ES and This is also From the equity hub showing the five-day history of the key gamma levels and in SPX and I actually took this yesterday But this still shows from Friday that almost 31 percent of the gamma Was expiring on Friday, this is the Friday expiration and SPY Typically corresponds to the big monthly expirations. So this was the September monthly expiration and then the next expiration after that starting on Monday is The October monthly expiration. So again noting that Almost 31 percent of the gamma in Spy was a part expiring on Friday and again, that was put gamma since the Spy and SPX were dominated by puts and this is the Vana Vana model for SPX and this shows the The shift in Delta notion Delta notional based on changes in in implied volatility and What this is showing is that As price price decreases The Delta notional Exposure market maker Exposure increases and that means they need to or becomes more positive and that means they have to as price falls That means they have to sell Futures and as price rises, they would have to buy futures to hedge their Delta exposure So they would be trading with price and and enhancing price action and here's the same thing for the spy Vana model and Finally, this is SPX Spot gamma hero again from the web-based version of spot gamma. It's Not as clear as spy, but it is showing that Just as expected The blue line shows activity trades and puts and the orange line shows trading and calls and The lines are shown in terms of Delta So a rising blue line Means that traders are selling puts and a rising orange line means that traders are buying calls So you can see with the rising blue line here that traders were selling puts as expected and it's a little bit more clear in spy that traders were selling puts pretty much from the open and Not do it not doing much with with calls And this is for the entire day All right. Now here are the examples in ES. This is the first one from the open So again, I'm looking for longs and this this setup shows bullish market maker hedging activity from the open with a rising green hero hero line also rising CVD You know, there are aggressive buyers in here all along So once this gets going and this is pretty typical activity That the stops buy stops start to come in Here you can see that the buy stops once Once price starts to rise and they continue to full fuel the the rise higher and the the entries The pullback entries Are really shown with the Three items here that they're where the aggressive briars Start to step in after a pullback So the first entry would be a a pullback at this combo l3 level as You know the flag and then price starts to rise another pullback here Another pullback another pullback And then the price target here was the es round number 3900 And this is the the warning setup And it's just corresponds beautifully with the With the thesis and with the information and the In the am note from spy camma Yeah, he really teed it up beautifully. Yeah Everything he he was like a crystal ball Yeah, you know, you don't see that every day, but when it You know when it does you have to take advantage of it That's right, you know just I'm sorry go ahead dog But you know again, you don't see this every day such a such a close correspondence between Between your thesis and and what actually happens But it you know it's it's great when it happens Yeah, yeah, that was another thing that I I remembered from your kickoff strategy too when you start to see the The alignment also of the stops going up. Uh-huh to to with the CBD and and the hero The the second example that I have shows that more clearly Um We can go ahead and take a look at that This is uh afternoon setup And I just take a quick look. Here's here's a look at the entire day. So This was the the morning setup That we just looked at and then Pull back a lot of chop a lot more chop and Then it takes off again in the afternoon to the to the final target And remember from the AM uh AM note showing the resistance level at 3,900 and that is spx 3,900 shown here at this level. So let's let's go back to the second setup and This is really a uh hero and iceberg kickoff So the first indication of a Uh of a potential move up is the uh the large block options trade here and Then hero I guess rises slightly kind of more going sideways And uh, you know, it's kind of amazing how long it chops around between spy 385 and 386 especially when When all of these by icebergs were firing off And I I added all these up The the second indication here All of these by icebergs. That's over 14,000 which is I think a pretty incredible number and the The blue line here shows that steady increase in by iceberg activity Until finally The aggressive buyers start to step in and then Once price gets going then the stops by stops start to fire and fuel to move higher up to 3,900 that's where um at the cash closed so price closed at The spx 3,900 target At at four o'clock and then futures continued to rise higher after that Yeah, that's a kind of beautiful correlation of data there, right? Yeah, I I think that's a kind of an incredible setup um You know a combination of the thesis laid out in spot gamma and then looking at book map Seeing all of this and just waiting patiently for the setup to play out So, you know again looking first you have the thesis then you have the bullish options activity Then these icebergs firing off and then just looking for a For a long entry here And then seeing the starting to see cvd and the stops rise Um, and you have your price target up at at 3,900 Yeah, that's a that's a beautiful one And yeah, I mean it also I mean shows how You the patience required like you mentioned Exactly, uh patience is Um You know a big part it definitely required for trading es to wait To wait for the setup and that's where book map comes in and helps so much um you know just seeing the the signals and book map and and and You know knowing or you know having a very good idea that that price has got to rise some at some point with Um 14 000 by icebergs firing off Yeah, yeah, I mean there's You know it and then it's very very clear once it breaks your um, uh, three or your um Your your level there that's marked 386 But yeah, that's spy spy 386 So, you know the key was just you know seeing all this chop between Uh spy 385 and 386 and then just waiting for a breakout You know a clear breakout above that level Yeah, that's beautiful that this this is why um, you you're always looking at the spy Uh one of the right I Yeah every day I Well, I use an add-on called price lines It's a available in the in the book map marketplace And I just marked these levels In a in a spreadsheet and then they're displayed in book map and and price lines also draws the Uh the lines Yeah, that that that helps me I that's the way I trade from I trade from level to level Do you happen to have the same image you're also in spy? The uh say that again, do you happen to have also the spy? Chart for that for monday Yeah, yeah, here we go So let's So this is the overall The the entire day for es and then this is the same Same for spy So what I have to do is figure out the the ratio between es and spy and it changes a little bit every day and then I mark that Add those levels to my Spreadsheet for es And and then those are displayed Yeah, the the the the spy really doesn't give you quite as much I mean, you don't have the stops and icebergs for sure, right So even if I was trading spy I would I would look at the es chart, you know, there's just more information here And that you know, that can be a good thing and a bad thing, but uh You know, again here, it's a good thing You're just not going to see the the stops and icebergs on spy like you do On es. Yeah, wow really interesting stuff, Doug Thanks And bird is asking how do I calculate that ratio? I bird I look at a look at one minute charts for es and spy and find corresponding points highs and lows and and Just calculate the ratio at three or four the high and low points So I just divide the es number by the spy number and it's you it's 10 Right now it's about 10.8. Oh, oh wait 10.08 And I just calculate that every day or two and then change my levels in the In the my spreadsheet. So bruce, that's all I had Yeah, yeah, no, I'm still still looking at these charts here and uh, yeah, really, really, uh I'm really interesting stuff here and um Yeah, this is just a you know, beautiful combination of uh book map and and spot gamma. Yeah Yeah, and everything that he talked about on monday, right You know, it's again amazing how it played out Yeah, yeah, yeah, so this is uh, it's actually funny like I kind of spoke with brent, uh after well, I emailed him and and said that um, you know immediately after his presentation like what about any kind of setups or what were you looking at and then Uh, here it is You know you you captured it later that day Um, and then just knocked knocked it out of the park here um, yeah, it's uh It's just banging you over the head basically and these are yeah, beautiful correlations and uh, you know, uh The significance or the meaning that that behind them all makes really really, you know, good sense. Um very very common common sensical and and uh The market understanding Let's see. Uh, no questions over in Uh youtube and then you just answered bird's question here So, um Let's see, um Did I have any questions for you? I think you answered all of my questions. Uh the um Yeah, I mean one thing that I really liked about the um, the kickoff strategy Uh was that kind of build up over time and then uh, and then finally the break and release um so I would just imagine that When you're looking at at these and you get your your setup dug. It's I mean, it's just It's got to be really high probability. Um That you're probably going to get a pretty nice move At least to dump off some risk Um for a for-profit uh at minimum right, um You know, I you know, I guess all you can do is prepare and uh You know anticipate and it may or may not play out, but you know in this case the um The preparation was right And then the price action and what I saw during the day, uh Confirm that thesis Yeah, and it it, you know, it worked out well And it it often does I I I look at the shifts in the gamma levels every day And uh, you know, like we looked at at teslas this morning that that played out well the shifts in the uh The shift in the put wall Was it, you know, you know a good indication, you know, of course along with the the big gap down and In the uh futures was a you know, a big indication to look for a short Do you um like in some of these um moves? Uh, I know you said you're scaling out. Um But like for example the the target here to 3900 in the in this example here, um is is very clear Like, uh, you know, I you're looking for that. Um, right and um But it it gave so much more And uh, how do you handle that because like, uh, uh, you know, you have these these setups, um, and they are You know very high probability um Do you find yourself kind of Uh trying to uh manage these for a longer term to to work out for hours or, you know, um Longer period for the day I I I tend to I tend to do that more in stocks where I can, um Have more control over the shares, you know, es Is a pretty big contract 500 shares a spy if I trade spy I can Can adjust the number of shares to whatever I want I don't have to have as tight a stop and I can can hold for a longer term Especially knowing I've got that that longer term core position And this is the you know, whatever day trading I'm doing is, uh, you know can often be in that context of that longer term core position So I uh, you know, if I'm going to hold something longer, uh, I I'm going to do that in spy Where I can You know more where I'm more comfortable And and holding for a longer Period of time and and keeping a wider stop. Yeah. Yeah Yeah, I see I see, um So and do you do both maybe uh, so you're you're you're scalping also, uh the s and p e many as well as spy Yeah, I uh, I I tend to get in and out more quickly and In es but if I'm trading spy, I'm definitely looking at the es chart And uh, you know, again, I may be scalping es and You know here I would you know, if I got in I I would have a hard time holding and Harding uh holding an es contract Uh up until 3,900 whereas with spy, I would have no problem at all holding for You know holding for just two or three points and in spy Yeah, yeah, with you know with with a few hundred shares of spy Yeah, yeah Yeah, it's uh, so it's basically just the leverage, uh that uh, kind of um Um Yeah, that and that that's especially right now like I've mentioned before. I'm I'm super busy. I'm I'm moving in a couple of weeks um and I'm Looking for Trading that doesn't require Uh, you know sitting in front of the screen just uh, you know watching every tick in es Yeah, you know, that's why why I'm more comfortable trading spy and again tighter stop Can control the number of shares hold for a longer target and uh, not have to Uh You know pay attention to every tick. Yeah. Yeah Yeah, it makes makes good sense. Um Uh once you move though, Doug, I want to see you'll hold it for uh, uh Uh, yeah, I'll I'll I'll work on that later Um, you know once I have time to uh, give this my full concentration Yeah, I mean because they get boy, would it be great to to you know, hold that up until like, uh Not just get 10 points out of it get like 40 points out of it You know or whatever it gave you here, um Well, you know that 30 that yeah, that will come but You know, uh, uh, you know spy is just a Um You know a Another substitute for es. Yeah. Yeah, exactly exactly and steven. It's asking about my longer term strangle approach Let's take a look at that and this is um This is an example. It's just kind of boiled down to um one Or kind of unit contracts that you know, the smallest number that i'm trading right now so, uh, what this is is three short longer term puts in um In december in the december quarterlies And also the december monthly expiration and then one One short call and the december quarterlies and that is the uh, that's the 30 deas expiration and the The december monthly is the six uh, uh, 16 december expiration and then two shorter term Put spreads and the seven oct and the 14 october Yeah, I think you know again kind of boiled down to the basic one one unit Uh One unit each so three short puts one short call and two uh, two hedging spreads and that you know that ratio that coming up with the uh the number of calls the number of puts and and the number of uh hedging spreads is kind of the key to um You know kind of the key to doing this And it's it's going to vary um Very over time and and how the market is moving Yeah, and you're and you're going to be constantly managing it uh as well, right? Well, no, the thing is this doesn't require much management You know, I've got a uh, you know nice big range of profitability from um You know, this is spy 340 all the way to 400 And I'm you know kind of in the close spot. I still have negative deltas. So it looks like about 360 um is the sweet spot and that actually corresponds to um Let's take a look at the vana model for today And this is the spy gamma mod gamma model, I meant and this shows that the um Price action and the hedging activity should slow down around this area And I Brent has talked about this Uh before and this has to do with the way that market makers are hedging Um tail risk, you know, they've got some They've got some puts way down here to hedge their tail risk So they uh, you know as price approaches this level They um, you know, they're hedging activity can slow down and this and that should slow down price So I you know, I'm pretty comfortable with that with this right now And I can get out anytime Right the thing it you know the thing about spy is it it's the one of most one of the most uh liquid instruments in the world and Um You know, it's easy easy to get in and out Yeah, yeah, excellent excellent. Um, yeah, and actually here here's another position in es This is uh similar with a little bit different ratio um One hedging spread two short puts and one short call So here this this requires a little bit more attention that uh, delta is almost flat Well, uh Thanks, Doug You know that uh, was uh, was really clear you went through your tenants, uh, what you're looking for You showed examples of each uh, and uh Then you went into uh the um Price action from uh from monday as well and the trade uh set up here on monday Did I miss anything was that yeah that everything or uh Yeah, that's that's it. That's all I had. Yeah. Yeah No, really really really clear examples. Uh, and then here it all culminates into this beautiful trade right here um that right is just like it's got everything in it And uh It took a while uh for those uh, you know all that iceberg buying and then uh boy once once it once it released though It just moved Well, yeah, and when when I have time these uh Setups for monday will probably be the subject of my next article for spot gamma Yeah, yeah, yeah, okay. Well, uh, let's see. Um Uh, do you get more transaction costs using spy versus spx? uh, peter h is uh asking Well, I um I would not sell options Naked and spx. That's too big too much for me But the the uh transaction cost Is the is the same for one contract of ease. So if I was uh, you know, if I were trading 10 spy contracts to one spx contract the Yeah, the transaction costs would be 10 times higher, but I would not Uh, you know, I would not make that jump the the jump that I would make is from spy to es options and I um that And I well with es there's also the advantage of different margin So, uh, you know once uh, you know once I exceed what I Um, you know once I get up to a certain level and spy I'm going to shift more and more Of my capital to trading in es where the You know, you get a span margin um and can trade you know much You know much bigger size with um with es with um and now the for you know, the the commissions are higher and uh Commissions and exchange fees are higher for es but you you know, you're trading uh, you know five contracts of uh You know one contract of es is equal to five contracts of of spy Right, right So that's you know, that that is the the progress the steps You know, you might even start with mes although that I just don't like the liquidity of the options In the uh in the micros and the the limited number of strikes the uh number of strikes in spy Uh is almost unlimited Number of expirations and strikes and it's very it's limited and and mes but it and it's also good in es So the progression is from spy to es and I would never go to spx. I would I would just continue to trade uh es and not not trade Naked options and spx now I trade butterflies and and things like that to find risk trades and spx, but but not naked Right, right understood. Okay. Um Okay, well, uh everybody Well, thank you dug and uh, if uh, if you like this video, please subscribe to the channel and give us a like there for dug Uh, and uh, dug. Good luck with your move. Uh, and and looking forward to doing more stuff with you here in uh Maybe uh later in october Yeah, I should be uh up and up and going uh Probably second second week in october Excellent excellent. Yeah back back to normal. We'll reach out to you. Uh, uh later in october then Okay Okay, thank you everybody. Okay, and thanks. Thanks everyone for uh attending on such a busy trading day Yeah, yeah, we do have one more. Um, uh, well tom b is starting Uh, right now or you just started uh his stream and we have another Webinar this afternoon with a new new trader Uh with patrick, uh, weland, uh, so if you guys are interested in attending that Uh, you'll see it in our discord channel as well as on youtube but Uh, yeah, now we got three for you dug Nice little collection of um, really really good options information Great. Yeah. All right. Thanks dug and uh, we'll right let's talk to you later All right. Thanks everyone. Okay. Bye. All right. Bye