 Hello everyone, welcome to Options with Doug. Streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 p.m. Eastern Time. Before I get started, I need to go through the general disclosure. All Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. The focus of my presentation and the focus of the Options-Doug chat channel 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 in the first is planning, and I use positional analysis. I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as 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 in SpotGamaHero to confirm my thesis and for setups for entries and exits. And I will be talking about setups today. And just to be clear, those setups will be, I'll be talking about an underlying asset, but those setups can be taken any number of ways with futures, shares of stock, or options. So again, that's up to you. I will be talking about the setup in an underlying asset. And again, that is based on the options market. Questions and comments are welcome. And I will be watching the options-jug chat channel in Discord and the chat and YouTube for your questions or comments. So feel free to post your questions or comments. My agenda for today, what I want to cover, first of all, go over news items. I'll cover economic data that came out this morning and the remaining economic data and events for the rest of the week. Then I'll go through my positional analysis. I'll review a few setups, and then we'll take a look at the live market. So when we get to the live market, if anybody has any stocks or in setup review, if anybody has any stocks or anything else you want me to take a look at, please let me know and I'll be glad to do that. All right, let's get started. News items for today. There were a couple of economic reports this morning. First of all, jobless claims came out a little bit greater than expected. And retail sales also came in greater than expected but a little bit less than the previous reading. So that was the economic data this morning. And then tomorrow is the big June options expiration. It is a heavily call dominated options expiration. And also consumer sentiment comes out at 10 a.m. So again, the big thing coming up for the rest of the week is the June options expiration. All right, let's start with positional analysis now. And I'm going to start with, let me update this, get rid of some of these lines here, clean this chart up just a bit. All right, so this is the SAP 500 futures, ES futures and book map. And before I take a closer look at this chart, I'm just going to take a look at SPX. So this is a SPX in a 30 day one minute chart showing the steady uptrend that began all around May 24th. Looks like SPX put in a low just around 4100 and has been in a fairly steady uptrend since then up about over 300 points. So there are some levels that I want to point out on this chart. And no, these are the levels that I drew. There's been an issue with the spot gamma think script. So I'm just using my own levels now. And hopefully that will be fixed soon. So let me point out some levels here. First of all, the dash purple line is showing the lower and upper edge of the expected move for the week. And note that SPX is trading well above that level. That's around 4350. So it is trading above 4400. And the next levels are the lower and upper edge of the expected move for the day shown with the dashed blue lines. And that is also that's around 4400. And SPX is trading above that. There are also some spot gamma levels on this chart. Let me point those out. First of all, the put wall remains at 4000. So that is well below this chart. So I'm not showing that. The next level I want to point out is the spot gamma volatility trigger. And that is the spot gamma's proprietary gamma flip level. Below that level, market makers position on the gamma curve is negative. In a negative gamma environment, they have to trade with price to hedge their delta exposure. And that tends to subdue enhanced volatility. So negative gamma environment, they're trading with price. And that tends to enhance volatility. And then on the other hand, above that level, market makers position on the gamma curve is positive. In a positive gamma environment, they have to trade against price to hedge their delta exposure. And that tends to subdue volatility, at least theoretically. All right. So the next levels are the 4400 level. This is the absolute gamma strike, the strike with lowest absolute gamma. And also the call wall. That's the strike with largest net positive gamma. And that should or can be expected to act as resistance. And right now, SPX is trading above the 4400 level and shifts in levels for the SPX. We'll take a closer look at this in just a minute. Shifts in levels, the volatility trigger shifted slightly higher from yesterday up from 4242 to 4245. And then also the absolute gamma strike shifted higher from 4300 to 4400. So bullish there. And also for spy, there were multiple shifts higher in levels. We'll take a look at that in just a moment. So this is the 30 day one hour chart. Let's take a closer look at today just to see the levels that are in play. So this is the SPX in a one day one minute chart. Let me just scroll down a little bit here. So this is showing SPX trading above the upper daily expected move and the absolute gamma strike call wall at 4400. All right, let's take a look at book map now. Let me just point out the spy levels. So spy levels did shift higher. And there was actually an issue with how spot gamma was showing levels. We'll take a look at that in just a minute. So I was mistaken on the last couple of days looking at the wrong part of the spot gamma dashboard. Apparently the areas that I was looking were not being updated. And we'll take a look at equity hub and see how the levels have been changing. So apparently that issue has been corrected today. So anyway, here's spy. Volatility trigger shifted higher to 434. And spy is trading well above that level. Put wall also shifted higher to 430. And that is pretty far below. And then as you can see the 440 level is the call wall and the absolute gamma strike. And spy is trading above that level just don't like SPX. Second winds ask what happens when spy trades above the call wall. Well, spot gamma statistics show that the S&P 500 SPX spy should trade lower. So that's what their stats show, but that's not always the case. So as long as traders continue to buy calls in the S&P 500 price is going to go higher. But anyway, again the stats show that price should trade lower. And maybe that'll happen next week after options expiration when a lot of that positive call gamma expires. So let's go back to ES here. And the interesting thing to note, let me point out the levels. Here's the lower daily expected move and the upper daily expected move. And I posted this in Discord just around 947 AM showing this reversal higher. This is about 840 AM just after the data came out. S&P 500 reversed higher at that level. And now traded all the way up to the upper daily expected move and is now continuing to trade higher. So here, let me point out the levels on book map. And I'm showing these levels in my cloud notes. And right now I'm using a 45 point difference between ES and SPX. So this is around the 4400 level for SPX. And that is the 4445 ES level. So those are the levels that are in play for today. Notice also the I have SPI levels here. So this is the SPI 440 call wall absolute gamma strike. And there was some consolidation here at this SPI 439 C1 level combo one level important gamma level until price broke higher just before 11 AM. So those are the levels in play for the S&P 500. All right, so IcoJed, I assume you mean can't see screen on Discord. So I did share it initially. Let me try again. Apparently something happened. Thanks for the thanks for the notice. Okay, can you see it now on Discord? Okay, great. Sorry about that. I had shared it initially and something happened. So anyway, it's been on, okay, great. All right, so it's been on YouTube. It's been okay on YouTube. Apparently there was an issue that with Discord that has now been resolved. All right, so that is the S&P 500 levels that are in play for today. And the S&P 500 is trading well above any expected levels for the day. All right, so let's take a look at NASDAQ now and NASDAQ. We'll take a look at QQQ first. And I've got just the major QQQ levels. So here QQQ is trading well above its volatility trigger and now approaching the 370 call wall. And for the NASDAQ, there are quite a few shifts in levels higher. First of all, for NDX, the volatility trigger, put wall, call wall, and absolute gamma strike all shifted higher. And most importantly, the call wall and absolute gamma strike are at NDX 15125. And there's about a 186 point difference the last time I checked between NQ and NDX. So there's the equivalent, the NDX level, the equivalent NQ level. And for QQQ, the volatility trigger shifted higher. And the call wall also shifted higher. All right, so bullish all the way around shifts higher in levels for SBX by NDX and QQQ. All right, let's take a look at the Vana model now. This is for SBX. I like to look at this every day. This gives me an idea of how market makers can be expected to respond. So what this chart is showing is market makers delta-notional and how that changes with price. So that is shown by this gray curve here. So what this is showing is as SBX increases, market makers will need to sell futures to hedge their delta exposure. And this purple line adds implied volatility to the equation. And that is showing how market makers delta-notional changes with changes in price and implied volatility. And that change in delta with a change in implied volatility is the Vana effect, hence the name of this, the Vana model. And let's just see where SBX is trading right now. Give me just a moment and I'll take a look at a watch list. Right now SBX is around 44.15, right around here where I'm holding my cursor, this vertical line, 44.16, close enough. So this is showing that market makers should be a headwind for price as it moves higher. And we'll take a look at setups in just a minute and see what traders are doing and see what is actually a driving price. And again, just a hint, I posted what was driving price at 9.47 a.m. and discord, right? So that is the Vana model. Let's take a look at some final information that I look at in my planning. I'm looking at gamma-notional here. So this is gamma-notional in the spot gamma-gama index for SBX, SPI, NDX, and QQQ. What these items are showing, first of all, market makers position on the gamma curve in numbers and gamma-notional here. So that for SBX, that's quite positive, 1.29 billion, and also quite positive for SPI, 1.14 billion, and also positive for NDX and QQQ. And note, those numbers did all increase from the previous day. And also this spot gamma-gama index, this is a proprietary measurement of the total amount of market gamma, and it ranges from minus 4 to 4. So the gamma-notional for SPX, again, is quite positive 3. So the higher this number becomes, closer to 4, theoretically, the lower volatility should be. So not necessarily working out today. So anyway, that's my positional analysis, that's what I was looking at today, and really expecting a little bit lower volatility. But then we'll see what was driving price. This is the SP500 hero signal, and this is showing price with the white line for the SPX, and showing options trades and market maker hedging activity for a combined signal for SPX, SPI, XSP, and ES futures. All right, so this is what I typically look at when I'm trading SP500. Let's take a look at the individual components first. So this is the SP500. We'll take a closer look at this in just a minute. So 1.63 billion. Let's take a look at the individual components. So SPX, positive, pretty strong correlation with price action at 1.05 billion, and SPI traders actually have been fading the move. That's minus 1.46 billion. So taking overall net SPI traders, taking negative delta positions, and this ES futures, very strong correlation with price action. And they're definitely on the right side of the trade. So that is over 2 billion. So overall, the net signal is positive right now at around 1.7 billion. Well, let's take a closer look at this. And what I posted, what I was looking at this morning, I separated outputs and calls. And when you do that, it's very clear what is driving price action today. Traders are buying calls that shown by this rising orange line. Note the notional value. That is almost 3 billion versus minus 1 billion. So they're buying calls and buying puts, but the call buyers are winning. They're more aggressive. And when traders buy calls, market makers are selling calls, and they have to buy futures to hedge their delta exposure. So traders buy calls, market makers sell the calls, that's negative delta, and they have to buy futures to hedge their delta exposure. Or if this was a single stock like Tesla, and traders were buying calls, market makers would be selling the calls, and they would have to buy stock to hedge their delta exposure. So that is what is driving price today. All right, so let's go take a look at book map now, and we'll take a look at the setups for the S&P 500, whoops, ES futures. So really the setup was just to find a way to get long. Any pause or pullback, find a way to get long. And either with futures, spy shares, spy options, SPX options, ES options, just any way you could, find a way to get long. And let me point out a couple of things here in book map. Early in the morning, cumulative volume delta was quite strong. You can just see all the aggressive buyers coming in, really starting at 840 a.m. with that reversal higher at the lower daily expected move. And that was also right around the SPX 4350 level. And CVD, cumulative volume delta has continued to be strong, as well as buy stop orders helping to fuel this move higher. So Captain Price says, nice stop runs. Yeah, that's been going on all day. And you can see these green dots here. There's a nice stop run, like he says, above the upper daily expected move. All right, so the next target above 4400 is not clear. Let's just take a look at it. So next target, this is the SPX. Just a quick cheat sheet here for SPX levels, equivalent ES levels. PotGam is using a 47 point difference. It's a little bit lower. I calculated it at 45 points this morning. So anyway, next level up above is SPX 4450. If price continues higher. So that would be right around, right around 4500 for ES. All right, so there's the SP500 bullish hedging flow call buyers. As long as they continue to buy, market makers have to buy, they're selling the calls, they have to buy futures edge, their delta exposure, and price is going to go higher. And this is also supported again by aggressive buyers, rising cumulative volume delta, and also buy stops, buy stop orders. All right, let's take a look at NASDAQ. So NASDAQ very bullish order flow and also reversed higher at the lower daily expected move. And now it's trying to play catch up to the SP500 and make it up to its upper daily expected move. So yesterday, the expected range for the day was for NQ, plus or minus 150 points. So if NQ makes it up to that level, I don't see any reason why it won't. That would be a 300 point move higher in SPX from the reversal higher in the pre-market before the RTH open up until the afternoon. Let's take a look at and see what options traders are doing in the NASDAQ. So I'm going to take a look at a combined signal for NASDAQ. This is combined NDX and QQQ. And this is not nearly as clear as the SP500. Let's separate outputs and calls. So really, put buyers are more aggressive than call buyers, but still prices going higher. As we saw a few old buy, sorry, looking at questions. So call buyers, they are buying calls. Notional value 194 million. And traders are buying puts at minus 620 million. So more aggressive put buyers. But as again, as we saw, let's go back into book map. With this rising cumulative volume delta and buy stop orders, price is going to continue to go higher. All right. So take profit as what mean SGI and implied level. So I'm not sure what that means. Let's go back and take a look at. All right. So I'm not sure what you mean. Take profit. Are you looking at this? So here is the spot gamma implied one day move. There's the spot gamma index. I talked about that, that proprietary measurement of total market gamma. All right. So maybe I'm missing something. I'm not sure what you mean there if you could clarify. And also, if you have any questions about spot gamma information, let me just point out that their spot gamma has a spot gamma website, free resources that are available to everyone, whether you subscribe to spot gamma or not. All right. So let's go back and take a look at book map. There's NASDAQ making its way up to the upper daily expected move. So again, just like the S&P 500, just find a way to get long any pullback. But it was a lot more clear to me for the S&P 500 knowing that call buyers were driving price higher. So SPX levels, SPX levels I had on the chart on my thinkorswim chart, just the volatility trigger of the call wall and the absolute gamma strike. And I don't see anything about implied move here. If you're talking about the lower and upper daily expected move, I just get that from the options market at the end of every day. I just get that from an options chain. All right. Let's take a look at a few stocks and then we'll take a look at the live market. So if anyone has any stocks you want me to take a look at, let me know. All right. So that is the setups in the S&P 500 NASDAQ. Again, just find a way to get long and stick a look at Apple. And we'll take a look at Hero. Let's go to Apple, and zoom in on this. So note the steady rise in Hero here. Let's separate outputs and calls. So traders have been buying calls all day. The correlation between call buyers and price action is not quite as clear on this chart. But that's just been a steady uptrend all day showing the rising orange line, notional value over 500 million. They're also buying puts, but that notional value is minus 20 million. So insignificant compared to the call buyers. So that's Apple. Let's go back and take a look at BookMap. And for Apple, very bullish order flow. Notice after the opening print, all of the aggressive buyers coming in, you can see that with the green volume dots after the opening print. And price first target was the 185 level. I believe that was the call wall. We'll take a look at that again in just a moment. And then the next level up above is the 186 liquidity. Let's go back and take a look at Hero. So 185, that is the call wall and the key gamma strike. So Apple breached the 185 level and now is trading above that level again. All right, the next stock, Google. And then the morning session, call buyers were driving price higher. Let's zoom in on this. Let's take a look at BookMap. And really, you could have picked almost any large cap tech stock and it's moving higher. So there's Google. Meta's a lot better set up and up almost nine points, nine points from the open at around 271. We'll take a look at Hero. Let's go to Meta. So Meta breached its call wall pretty early. Call wall, key gamma strike at 275. Call buyers driving price higher. Right now, notional value is about 185 million for call buyers. They're also selling puts. That blue number is positive. So they're selling puts. Right, so that's Meta. Let's go take a look at BookMap. So remember, 275 is the call wall, key gamma strike. So Meta breached that pretty quickly in the morning, moved up, retested that level and now moved up to the next level of very high liquidity at 280 and now be maybe heading up to 285. All right, so very bullish day in Meta and most of large cap tech. All right, let's take a look at one other stock. That's Microsoft. Take a look at Hero and this is a very clear correlation between call buyers and price action. Note that Microsoft breached its call wall pretty early as well at 340. All right, let's go take a look at BookMap. And one thing to note when this call wall breach happens and traders continue to buy calls like you can see here. Traders are continuing to buy calls and remember the call walls strike with a large net positive gamma. That is where they're the most call gamma exist. When traders continue to buy calls, market makers are selling the calls and they have to buy stock to hedge their delta exposure and their delta exposure continues to get more negative as price increases and those short calls continue to go further in the money. So that helps to fuel the move higher if there is a call wall breach and traders continue to buy calls like we see here in Microsoft. And note they're continuing to buy calls. All right, let's go take a look at BookMap. So there's Microsoft again the 340 call wall breach just a few minutes after the open next big target at 345 and price continues higher. All right, so take profit ask what is your expectation for tomorrow's option up x options expiration. So spot gammas expiration looking for some consolidation next week. Let's take a look at take a look at something here. We'll take a look at that in just a minute. This is SBX and this is showing expiration concentration. We can zoom in on this chart. So what this is showing is delta notional at different expirations and this is the expiration tomorrow June 16th. These bars are showing call delta or positive delta with the orange bars negative delta or put delta with the blue bars and you can clearly see the large domination of call gamma. And typically in a call dominated environment that call gamma that has been helping to support price higher expires and market makers can often sell some of their long hedges since they no longer need that those long hedges so that can it's kind of similar to what I've talked about a call gamma unwind that can happen to stocks that are traders have been buying calls. They're buying calls that expire tomorrow and those calls start to lose value as expiration approaches. So that is the charm effect the change in delta with the change in as time passes. And then also again those calls are just going to expire. They're going to go away and market makers can sell some of their long stock hedges or futures hedges. So what spot gamma is looking for is some consolidation next week after expiration. All right so that is what spot gamma is expecting and I don't have any reason to disagree with that. All right any any other stocks anybody want me to take a look at. If not we'll go back go to the live market now. Let's go to the S&P 500. So it looks like traders are starting to fade the move higher. So let's we'll start with a this one day look back period and let's take a look at puts and calls. So traders really have not they're kind of leveled off with buying calls. Let's take a look at a shorter rolling window period see if we can get more clarity. So right now I'm just looking at the last 30 minutes of data. So this is showing that in the last few minutes what traders have been buying puts shown by the following blue line and now they're starting to sell calls shown by the following orange line. So this makes total sense to me. All right so Alex says guys I got killed today looking for a pullback. Any ideas how I can better avoid that next time. That is something that I have trouble with. Most people do is you know I guess buying as price moves higher. You know I assume you mean looking for a reversal. So when you say pullback I'm thinking looking for a pullback entry for the long for a long for an uptrend. So I assume you mean reversal and you know I think the key for today was just to watch this orange line knowing that traders were let me shift this back. You know watching hedging flow and order flow. So I'm going to go back to the total one day period. So this is you know just watching this this rising orange line. Traders are buying calls. Market makers are selling the calls and they have to buy futures to hedge their delta exposure. And as long as this continues price is really not going to reverse. So I you know who knows what will happen tomorrow. And again Spotgam is looking for some consolidation perhaps next week. And then the big event after that will be the quarterly expiration. And you know of course there's the J.P. Morgan collar at forty three twenty which has been a that J.P. Morgan short call has been a pretty strong magnet for price at previous expirations. So Alex I understand your problem completely. It takes a lot of discipline and something that I struggle with as well. And I think many other traders but you know trying to get in on a trend after it's been going in on going on for some time is is difficult. But you know maybe another way of looking at that is you know wait until you see you know a series of lower highs and lower lows before you take a take a short entry. But anyway traders are continuing to buy calls. Let's go back and take a look at book map. All right. So you're not the not the only one fading this move. Note the this iceberg line here started to move lower. Let's see just before noon. So larger traders are coming in and they're they're selling this with iceberg orders. So they're trying to fade the move higher fade the move and so far it's not working out for them. I guess eventually it will. Most traders larger traders that use iceberg orders have enough size and they don't have you know they have large size and they can take some pain that smaller traders like us we just can't take. So larger traders fading the move higher. That's the same with NASDAQ and note the cumulative values here that's about 2,933 for icebergs negative but over 10,000 for buy stops positive 10,000 and then over positive 12,000 for cumulative volume delta. So aggressive buyers and buy stop orders helping to fuel the move higher along with call buyers. So again you're not alone the larger traders with iceberg orders are trying to fade this move and so far not having much luck. Let's take a look at NASDAQ and pretty much the same situation here the larger traders were fading the move earlier in the morning iceberg orders and so far they're feeling some pain today. All right let's take a close look now at what's happening with SPX. Let me just check on something here see if we can come up with some levels to reference give me just a moment so that level should be displaying let's see I'm looking at the wrong I just want to get some reference levels on this chart so get some spy levels on here for at least for a reference. So Alex says that makes a lot of sense thanks Doug you're welcome it seems like the spot gamma where you can see the futures are being hedged buying or selling you can get a sense of the direction futures are heading yes so again the key is knowing what traders are doing how market makers are reacting most you know today for sure knowing that traders are buying calls and as long as they do that price is going to continue to move higher giving you pullback entries so let's take a look at you know anywhere looking for a pullback deeper pullback so here's one down just below the ES 44 50 level just after one o'clock and then the pullback just to the upper daily expected move and the spy 441 level now this could be another just another pullback right here as price continues higher and if you like to trade breakouts note the consolidation in this level several tests of the upper daily expected move oh from about 11 30 to really to 130 and then price broke broke above just after 130 so there's the breakout above the upper daily expected move let's go see what options traders are doing see if they're continuing to buy calls we'll go to the shorter time frame and yeah around 115 they started buying calls again right so like i said at the beginning today is just about finding any way you can to get long and you know who knows when this will reverse again uh what spot gamma is calling for some consolidation next week so we'll see let's go back and take a look at that book map one thing that i uh look at in book map is this stop line in the sub chart here in book map and as long as that's rising the price is generally going to continue to rise that's a very good directional indicator and then cvd cumulative volume delta is a little bit more sensitive and you can just see that with the see that with the dark blue line here right so alex asks says asked is the so the white line would be calls blue puts and orange futures uh so i assume you're talking about hero now so let's go back and take a look at that so what this chart is showing the white line is price that's spx price and so this really does not have anything directly to do with futures so this is showing traders are buying spx spy and spx spy and es and xsp options so buying options and all those price uh indexes and so that is the orange line calls and the blue line is puts so they're buying calls and buying puts call buyers are winning so oranges options trades calls blue is options trades puts white is price and then i know just you know we know that for those instruments traders are uh market makers are going to hedge with futures not stock now if i was looking at apple or tesla they would be hedging with apple or tesla stock but in this case for uh spx spy nes futures they're hedging with actual futures so no uh alex when traders are buying calls options market makers are taking the opposite side of that trade so they're selling calls they want to remain delta neutral so they have to buy futures to hedge their delta exposure that is the most efficient way for for market makers to hedge so again just to summarize traders are buying calls market makers are selling calls and they buy futures to hedge their delta exposure all right so uh it's been an interesting day let's just wrap it up take one last look at book map and price continues higher so the the pullback that i pointed out before and you can just see the shift in order flow from bearish aggressive sellers to aggressive buyers and now price continues to move higher and continues to be fueled by stop runs as well call buyers buy stops and aggressive buyers all fueling to move higher all right so alex asked how do you see their selling calls um well i know that that's just what market makers do they're making markets that's all they do they're making markets so i can see from that rising orange line this is showing me the the hedging pressure options trades and hedging pressure so i and that's in terms of delta so when the orange line is rising i know that traders are taking positive delta positions with calls they're buying calls and market makers again that's what they do um they sell calls they take the opposite side of the trade they want to remain delta neutral so they um they have to buy futures to hedge their delta exposure all right so alex uh yeah it takes time to uh you know fully comprehend this i suggest taking a look at the uh if you really want to understand spot gamma taking a look at the spot gamma youtube channel and also the spot gamma website they have a lot of just go to the free resources tab on the spot gamma website there's a ton of information there also the spot gamma youtube channel and then for book map book map also has a lot of information and knowledge base and uh also a great youtube channel all right that's all i have my time is up for today and um again remember tomorrow's options expiration there's an am settlement for spx and also a p.m. settlement then everything else uh expires at the end of the day so there could be a potential call gamma unwind we'll just see what traders are doing tomorrow all right thanks everyone thanks for your questions and comments uh thank you very much alex and floyd's garage for your questions and comments and i will see you tomorrow