 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. And 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, training futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. As a reminder, the focus of my presentation and the focus of the Options-Doug Chat in 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 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 the expected volatility and trading range for the day as well as a directional bias. And the second step in my process is execution and I look at real-time order flow in Bookmap and real-time market maker hedging flow and Spot Gamma Hero to confirm my thesis and for setups for entries and exits. And questions and comments are welcome and I will be watching Chat in Discord and actually I need to update this. This is now Options-Doug. The WITH is gone so it's I'll update these slides for Monday. Bookmap did a reorganization of Discord so again this is Options-Doug and I will be watching again, watching Chat in that channel in Discord as well as YouTube for questions. So again questions and comments are welcome. Alright let's get started. What I want to talk about today is briefly go over economic data and events and then talk about our positional analysis and then I want to talk about a something that happens on Fridays, expiration Friday. This is a this is just a weekly expiration not a not a big monthly expiration but we can look for certain behavior with stocks and I'll talk about that. That's a call gamma unwind and then we'll look at setups. So first of all news for today the last and I might have been the only significant economic data of the week was consumer sentiment. They came out at 10 a.m. Eastern time and I think the market initially had a little bit of a bearish reaction and then rallied after that. So that was today the consumer sentiment came in a little bit better than previous and a little bit better than forecast and then next week so this week was kind of a reprieve from economic data and events and then it starts up next week with the CPI on the 14th Tuesday the 14th and fixed expiration on Wednesday the 15th and then the big monthly options expiration on Friday February 17th. Okay let's go over our positional analysis now and I'm going to start let's get over to bookmap and the ES futures and then before I dive into that I'm going to start with a bigger picture and view here and this is SPX in a 20-day chart this is thinkorswim showing just price and levels these spot gamma levels these are updated for today these are these levels are provided in a script for spot gamma subscribers for thinkorswim and a number of other platforms and here this is the levels shown in thinkorswim again a big picture chart showing SPX this is the put wall down here at 3,900 and then the key gamma strike at 4,000 and the call wall up here at 4,200 and then these are the levels that are in play today and we'll look at a one-minute chart to get a closer look at that so that is a one-hour chart and now let's take a look a closer look and this is a one-minute chart again SPX looking at the same script and the 40-50 level SPX this is SPX 40-50 level below and then the volatility trigger and zero gamma level above and then the 4,100 level all up here above okay let's go to book map now so this is the S&P 500 futures these are the levels on my chart they should be pretty accurate now this is the spot gamma cloud notes excuse me spot gamma cloud notes provided again to spot gamma subscribers and for book map the way it works is these levels are updated automatically whereas in thinkorswim I have to manually update them but here in book map they're updated automatically and this is showing key SPX levels converted to an equivalent ES number so right now spot gamma is adding 10 points to SPX to come up with an equivalent ES number and that's pretty close I calculated it at just a little bit below 10 so this is good enough so there's the volatility trigger above and that is at SPX 40 40 95 and then here is the 40 the 40-50 below and that was noted as support in the spot gamma am founders note and know that is right next to the lower edge of the expected move for the week at the four again at the SPX 40 50 level so the things to note here is first of all the support at this 40 50 level and this is a at 8 a.m. Eastern time and then the next level support was the spy 405 level and that was noted as support and the spot gamma am founders note as well and that is shown here and this is shown in this second column here these are my cloud notes and what I do is I mark the key spy levels as well as the support and resistance levels that are noted in the spot gamma am founders note so the things to note here again first of all the test of the 40 50 support level at around 8 a.m. and that held a support know the chain note the change in order flow here from pink dots and then aggressive buyers start coming in with market buy orders and that's shown by the green dots there at that at that support level and then the second support at the 405 spy 405 level and that was just after the 10 a.m. data the quick drop and then the move higher let's we can zoom in on this a little bit and a quick run up to the spy 408 volatility trigger and then a move back down to this level and we don't know what that is so note that's just a little bit before 11 a.m. let's go over to the spy chart and there it is the spy 406 level so let's go back to ES and then there's this reversal at 4095 so that is the only that's the only level that I have here on my chart that I can't explain with a you know a quick look at the spy or spx chart then a move back down to this support level and this was noted this is 4065 noted in the spot gamma a.m. founders note then a move back to the 408 level spy 408 volatility trigger so even if you didn't have hero all you had with with these levels you can trade order flow around these levels and there was a comment in and discord bookmap discord just a few minutes ago JC was talking about coincidence at certain levels I'm not quite sure exactly what levels he was talking about but this is what led me to bookmap and spot gamma in the first place what is price react at certain levels and the combination of bookmap and spot gamma has answered that question for me so you know here I'm showing the importance if you trade if you trade ES both spy and spx levels are very important and price often reacts around those levels okay so that is that's the S&P 500 and we'll look at we'll look at setups in the and we'll look at setups in the S&P 500 there are some really good setups with hero divergences so again the point here is the combination of spy and spx levels you know it's some it can be time-consuming to to note all this but I think it's worth it to to understand where price is most likely to react and reverse and you know as we seen well we've seen here in this chart okay shifts and levels so nothing there's nothing really which was kind of surprising to me given the you know given the move down yesterday for the S&P 500 and QQQ the only shift down was a shift down one point and the spy volatility trigger from 409 to 408 and remember yesterday there were some discrepancies about the SPX volatility and zero gamma levels so I'm not you know I didn't didn't check and compare those so again not the call the main levels the put wall call wall key gamma strike for SPX and spy there were no changes yesterday and you know again I think that's a little bit a little bit odd they are potentially the trading yesterday was concentrated as and zero DTE options and there was no change no significant changes are significant changes in the open interest were not significant enough to change these key levels so I hope that makes sense so again I you know I don't know but it's you know it is what it is so no no significant change in the key levels okay so let's take a look now at the gamma charts okay let me check for questions all right so first of all let's say retest of order flow at 1035 that's 4075 so that is the highest support level that I have for SPX was 4065 so that's this level right here converted up to the ES 4075 so at 1035 where is that so that is the that's the move down at so rejection of the volatility trigger the 408 volatility trigger yes I think that may be a little bit far away and I have the volatility trigger at 4095 so I think this spy 408 volatility volatility trigger was in play at that time okay so JC was agreeing with that and so let's go ask just curious if EOS ES gets to 4075 is a long possible and certainly yes all right let's take a look at so maybe I got something wrong so let's first of all let's go I would confirm that with with order flow and with hedging flow so we'll take a look at hero in just a minute so let's take a look now at let's go to the founders note let me just get rid of these right so this is what I was looking at so this is 4065 so that is SPX 4065 and spy 405 noted as support and there it is at ES 4075 so that's the support so I think this this reaction from 1035 to about 11 was from spy 408 to 406 so this is what let's see this is the we draw it with this so there's the reaction around 1030 at the 408 volatility trigger and then the move down to 406 so that's what I was looking at that's the levels that I was looking at all right let's go back all right so the 4075 possible long yes again we'll look at hero there's a question how can I learn about the key gamma level concept and so there go to the spot gamma website there's plenty of free information there and watch my videos watch the spot gamma YouTube videos so there are a lot of spot gamma concepts but I suggest just starting with the the support center on the spot gamma website okay so that is that's the yeah the SMD 500 ES spy and SPX all those levels are in play and let's go take a look at the gamma charts and we can see where some of these levels come from so these are the absolute gamma levels and this is the zero line and above that line this is positive gamma or call gamma this is market makers position market makers position at these levels so positive gamma or call gamma above and that show by the black lines and negative gamma or put gamma shown below with the teal lines and this is showing the SPX 4000 strike that's still the key gamma strike 3900 is the put wall and then 4200 up here is the call wall so the key gamma strike is the strike is the absolute gamma strike the strike with the largest absolute gamma and the put wall is 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 resistance so notice all the gamma is really concentrated are mostly concentrated above the 4000 level for SPX let's take a look at spy and here's the 410 key gamma strike and then 400 is the put wall that's pretty obvious the strike with the largest net negative gamma and notice now the gamma concentrated really the put gamma concentrated mostly between 400 and 410 and you know of course there's some down below and then call gamma concentrated above the 410 level and now 415 is the call wall so 400 is the put wall 410 is the key gamma strike and 415 is the call wall okay there's a question in YouTube may ask a question about whether today is a little put Vanna rally and yes and it's not because the weekly it is because of short-term options or short-term puts not necessarily because it is a weekly expiration just because traders were trading long-term puts and I'll talk about more about that and that was a reason for a big reason for my bullish thesis today for the S&P 500 so yeah and there was also again caught talk about call gamma unwind and some stocks okay so that's spy and recall a few days ago we were looking at the concentration of gamma between 410 and 420 and now that has really kind of gone away and gamma is mostly concentrated in the 410 to 415 level and then let's take a look at Nasdaq so gamma is pretty well spread across call gamma mostly above the 300 levels the key gamma strike call gamma mainly concentrated above and plenty of put gamma down below okay let's take a look now at take a look now at the data and we'll take a look at gamma notional and this is market makers position on the gamma curve and now gamma notional has shifted to negative for SPX spy and QQQ so the shift this week has been been gradually more negative for the most part or actually the last yeah for the most part this week one day of up our shift positive at the rest of the days gamma notional has shifted more negative so now SPX gamma notional is negative from positive 154 yesterday to minus 151 today so what this means is again market makers position for SPX and spy now are both negative gamma this means that market that traders are long puts market makers are short puts they have to sell futures as price decreases to hedge their delta exposure and important for today they have to they can buy back futures if price increases or implied volatility drops so they're trading in a negative gamma environment they're trading with price to hedge their delta exposure and that tends to increase volatility since they're trading in the direction of prices price falls and then as price increases their delta exposure decreases and they can buy back their short hedges so SPX again yesterday went from went from positive yesterday to negative today and then yesterday spy gamma notional was minus 691 and today minus 1284 so more negative for spy and then yesterday QQQ gamma notional was minus 104 and today it's minus 272 so a shift so that now all SPX spy and QQQ market makers position on the gamma curve for all those all those instruments is negative let's take a look at the quick look at the Vanna charts and it confirms it's just a visual representation of what I'm showing about talking about so this is SPX this is showing that market makers delta notional delta exposure will increase slightly as price drops and the green curve shows that as well as the Vanna effect and that's the change with delta with their delta exposure as implied volatility changes again and that's the Vanna effect and the black line shows how market makers delta exposure changes as time passes and that is the and that is the charm effect the change in delta as time passes so it's a little bit more pronounced with spy steeper curve so again this works both ways as price decreases market makers have to sell futures and as price increases they can buy back those short futures and then finally here's QQQ all right next thing I want to take a look at is my key gamma strike list and again this but well so first of all this is just a simple spreadsheet and I track the key gamma strike for all the stocks on my watch list the right column is showing the previous key gamma strike that was from yesterday the current key gamma strike column shows the key gamma strike for today and it's a I like to track how these change from day to day and I color code the color code the numbers just to make it easy to look at so here I can see that Nvidia key gamma strike increased from yesterday and Microsoft the key gamma strike dropped from yesterday so again this is just a simple spreadsheet just a quick visual reference okay so given all this my thesis for the day I was looking for a little bit higher volatility than yesterday due to the all the gamma notion will be coming more more negative and I again I was for the S&P 500 I was was bullish and again I thought this was this key gamma strike list was kind of odd given the drop yesterday so anyway my for the S&P 500 my thesis was bullish and that was primarily based on this information here so talking about the there was a question about a put Vanna rally before and that's really I think what what's in play today are helping you know adding fuel to any move higher so implied volatility increased yesterday the puts that traders bought or want to buy are becoming more expensive so this is noting this is from the spot gamma am founders note that to continue or sustain the downside momentum they need to continue selling hedging so traders as price drops market makers have to sell futures so that needs to happen to sustain this downside momentum and noting that a pause in the outside price reaction immediately starts to decay these short dated puts remember the shorter dated puts have higher gamma and this like likely draws dealer buying flows so this is what what I read the reason that I was bullish today is looking for any move higher and a drop in implied volatility for traders are for market makers to be able to buy back their short hedges due to these shorter term shorter term puts quickly losing value okay so I hope that makes sense so looking for the put Vanna effect today because of the increase in volatility yesterday and the trade in short term puts okay let's let me go through questions okay there's a question about oh from trader HE question about ES and think or swim so let's go we'll take a quick look at that let's go to ES the trade stats so if you're trying to determine whether trades puts and calls were bought or sold and I would look at spy over ES but if you do want to look at ES I would look at this let's just look at calls for example showing that traders are calls trading on the ask and trading on the bid so I would assume that traders are buying calls any any trades on the ask I would assume they're buying and any on the bid I would assume they're selling and you're asking about puts so the same thing so we can take a look at puts so it's pretty even 177,000 versus 168 so more of a difference in calls trader selling calls and it looks like they're slightly according to this buying puts over selling puts but pretty even for puts all right let's talk about the call gamma unwind and there were some questions about this so let's take a look at and how to how to determine this how to use it and what you know what you can do about it how to trade it so what I do is I sort my watch list by this next expiry gamma percentage so that's the percentage of gamma that's expiring today and I'm sorting by the highest number so at the top of the list there's coinbase snowflake Netflix Tesla Disney and Nvidia and what I'm looking at is this date right here so this is today top gamma expiry today so then what I do is I'll go through this list and I'm looking for some sort of extreme so this would just quickly look at this composite view chart the red shows that this is entirely put dominated so I'm looking for a call gamma on one I'm looking for a stock where traders have been buying calls all wake and if you look back and discord as well as on Twitter for the post last week of meta I showed a good good example of this so coin that's not a not a candidate snowflake yes so there is some call gamma above 175 and these are 35% expiring today so these calls are going to be losing value due to charm for sure so their calls are quickly losing value as expiration approaches this afternoon and probably could be Vanna as well and again recall I showed in the meta example implied volatility dropping during the day so snowflake is a candidate Netflix not so much I think the 400 level it looks pretty insignificant so here's Tesla and here's the example that I want to show so Tesla call gamma above 215 let's take a look at the put and call impact chart so we can see where call gamma dominates above that level that's showing the that shown by the orange line the call gamma line up below the put gamma line right so let's go back take a look and generally I'm looking for this number to be greater than 30% that's what that's what spot gamma recommends so and Nvidia was actually in play to it's a little bit less than 30% and we'll look at both Tesla and Nvidia and typically for this weekly call gamma unwind this will happen with on bullish weeks or stocks that have been bullish during the week trader subind calls and typically for a weekly expiration this is going to be related more to or occur more with high beta stocks like like all these examples here Coinbase snowflake Netflix Tesla not Disney but Nvidia so all these stocks you know actively trade are very volatile compared to the S&P 500 and as I recall both Tesla and Nvidia were strong this week so we'll take a look at Tesla so again that this the way this works is that traders buy calls that expire on Friday and market makers sell the calls so they have to buy stock to hedge their delta exposure so they're long stock and then as these calls lose lose value at the end of the week due to charm the drop in the change in delta due to the change in time the passage of time as well as Vanna drop and implied volatility so these calls are losing value market makers delta exposure decreases and they no longer need these stock edges so the way that I do this again I I sort my list by this next expiry gamma percentage then I check the percentage make sure it's close to or above 30% then I look at the date and then I go down here and I check whether there have some calls call domination or put domination and this is what I'm doing for stocks for call gamma unwind and then now I'm going to confirm that with order flow so let's go to Tesla and I'm going to go to hero now and let's let's zoom in on the morning and let's see what traders were doing and so there we go in the morning quick run up and then traders started selling calls they were buying puts the whole time so this orange line shows initially they were buying calls they started selling calls and the blue line shows they were buying puts from the open all right let's go to book map now and see what what order flow looks like and I'm going to zoom in on this just on the first first moves in the morning so recall that traders well first of all we're anticipating a call gamma unwind order flow definitely confirms that as well as hedging flow so we see the traders are buying puts they're selling calls and order flow I I think I'd love to trade Tesla order flow is so clear in here look at the look at all the pink dots these are aggressive sellers market sell orders and then notice the the shift here here's a double bottom all the green dots coming in and if you are short that that tells you it's time to get out and if you want to go long you know certainly there was a a long worth five or six points here and very easy to see in order flow here you know that's just what makes this order flow and seeing this visualized in book map and I don't think you could see anything like this in a candlestick chart just makes trading Tesla and this is pretty typical for Tesla so easy to see so again for Tesla we were anticipating a call gamma unwind and that's what happened in the morning and let's let's zoom out and take a look at the entire chart now and see if that's continuing so some up and down for Tesla mostly down confirmed by order flow pink dots down green dots up pink dots down CVD confirming that cumulative volume delta and let's go back and take a look at hero and hedging flow is confirming price action again as well mostly mostly in the morning session the strongest correlation was here in the morning all right there's Tesla and let's go take a look at one other one other stock on the list now recall that Nvidia had about 26% gamma expiring today so bearish for the most part not as quite as clear confirmation as Tesla so let's go take a look at book map now we'll take a look at Nvidia and great shorted Nvidia here and a reversal at the 220 hedgewall and that baby that may not be correct I may have typed that wrong let's go let's go check that in equity hub I think 220 may be the call wall no that is right 220 is the is the hedgewall 230 is the call wall 225 is the key gamma strike and then 210 is the put wall all right so reversal at the 220 hedgewall and a move down to liquidity targets at 214 to 12 and then the 210 put wall and this was anticipated because of the call gamma unwind and then confirm with hedging flow and order flow all right let's go take a look at it hero again zoom in a little bit in the morning so this is pretty typical of Nvidia recently there is confirmation but it's not quite as clear as Tesla for example but still certainly confirmed in with order flow and anticipation of the call gamma unwind let's just go back in and I don't think we looked at this so what I'm looking at is the call gamma above the 235 level so again that's far out of the money quickly losing value and market makers are unwinding their long stock edges is their delta exposure decreases and then snowflake is one other stock and again call gamma above the 175 level let's go take a look at snowflake and more of a stronger confirmation there and it looks like some great pullback entries here as hero is moving lower throughout the day so there you go there's the call gamma unwind three three good examples and you look at this for arm again I gave the process so I I've got a watch list this is Friday a weekly expiration and I'm looking for stocks with an amount of gamma expiring greater typically greater than 30% today and some call domination some calls above and looking for market makers to unwind their long stock edges is their delta exposure increases as the calls lose value due to charm and Vanna right so that's snowflake so again three examples Tesla and video snowflake all right let's take a look at the S&P vomiter again remember bullish thesis based on if price increases all these short-term puts are going to lose value so this is kind of the the opposite reaction from the call gamma unwind and again recall that the SPX and spy gamma notional was negative today and then spy gamma notional in particular was was quite negative at 12 minus 1284 so there were quite a quite a few divergence long setups so I'm drawing a line corresponding with hero the purple line and the white line is price and there's the first setup just right after the 10 a.m. data as price drops and traders are taking have already started taking positive delta positions about 945 and that continues not quite as strong but leading to another long setup just before 11 a.m. and recall we did show the levels where these were price was likely to react showed them on the ES and the spy chart and here's another setup long setup about 1220 hero continues strong and price reverse is higher all right let me there's looks like quite a conversation going on here in in discord let me see if there's anything that I need to answer and JC says yeah next time you have to bring cookies if you're late for trade or HE I agree so right do market makers short ES simultaneously as they sell puts or something that they do at the end of the day so it depends on the instrument so their market makers are buying and selling ES futures to hedge options trades in SPX and spy and they do that differently so for SPX this is pit traded and often those and you know could be between institutions so often those trades are hedged as or before they're actually placed so on the other hand spy trades are traded spy is traded electronically and market makers have to hedge those trades pretty quickly generally certainly differently than SPX so when I'm looking at the options trades for the S&P 500 I look at spy and so does Brent with spot gamma the founder spot gamma and he discusses this so but this is something especially for spy no they're not waiting until the end of the day they're doing that sometime during the day I think it depends on you know they want to remain fairly delta-neutral so whenever whatever they have to do to remain delta-neutral okay and there was a question about gamma notional or the yet JC is responding with the information about gamma notional so thanks for that so again the timing of it depends on whether it is SPX or spy and for spy it's typically not necessarily immediately but certainly they're not waiting until the end of the day okay I'm still following the following the questions and you Lee 73 ask of all out of all spot gamma futures how would you rank them I can't do that so I I'm showing in my webinars every day I talk about what's important to me and I'm not leaving anything out and I'm not adding anything extra so there's a lot to take in so again I'm talking about I'm showing and talking about everything that's important and I'm going over my positional analysis which is based on static data from spot gamma that is generated a lot based on open interest that is provided once a day once top once during the night and spot gamma adds their own proprietary information to that gamma and then that's important to have a framework for the day what what you expect to happen and then I'm looking at real-time order flow and spot gamma real-time order flow or hedging flow and spot gamma hero and real-time order flow on book map so I can't I can't rank them and I'm not sure why you would why would why would you want to do that you know I think it's all important if I if I was trying to make a decision about how much money I wanted to spend for a subscription you know I talked about before if you just had the levels just a basic spot gamma subscription had the levels you could trade around those with order flow and I think that hero adds certainly adds an extra level of confluence to me and that's very important so again I'm not not keeping anything out this is what I look at every day and these right another question to see where liquidity are above and below and I look at liquidity as a as a price target and so for liquidity and spot gamma levels and I'm reading through the last think the last question here normally trade close to spot gamma levels or far away toward levels and both so I look at if price is moving up and there's a spot gamma level above or a liquidity level above I assume that as a as a target and then as price approaches I assume but confirm with order flow and hedging flow that it may be resistance for example so you know we saw on these charts charts before price reacting at at the levels let's go back and take a look at book map let's go back to ES now you know and I've showed all these examples a price and this is looks like you know pretty much a range bound day price reacting at all these SPX and spy SPX and spy levels so for example here let's zoom in go to this morning move as price move down I was looking at the 4065 that's SPX 4065 level and the spy 405 level as support and a target as price move down and then order flow and hedging flow both confirmed that these one of these levels would act as support and price moved higher and as it turns out the 408 spy 408 volatility trigger and notice the liquidity there at that level that's shown by the the orange shading there that acted as a target and then as resistance okay I hope that answers the question all right so that's really all that I wanted to look at those are the best setups the long setups and the S&P 500 and then the short setups and and long as well for Tesla NY and the call gamma unwind stocks let me check for final questions okay so again it today what really the keys for today we're first understanding these levels where they were and whether they were likely to act as supported resistance and then understanding how market makers were positioned on the gamma curve for both the S&P 500 as well as stock so in the S&P 500 we saw that gamma notional was negative for for the S&P 500 particularly spy and expected to that that to be related to a lot of short-term puts and watching implied volatility drop and price rising then knowing that those puts were quickly losing value and market makers could buy back their short hedges so that was what was driving a bullish thesis today for the S&P 500 and then just the opposite for stocks that had a lot of gamma expiring today and had some call domination at some level knowing that market makers as those calls lost value due to Vanna and charm market makers would be able to sell their long hedges so knowing the levels and how market makers were positioned on the gamma curve and both the S&P 500 and the stocks I think were the those were the keys for the for the day so anyway that's all I have I think I've answered all your questions I hope thanks for your questions and comments thanks for watching and I will see you on Monday thanks again bye