 Hello everyone welcome to options with Doug streaming live daily on bookmap discord and the bookmap YouTube channel at 1 30 p.m. Eastern time before I get started I need to go through the disclosures general disclosure all bookmap limited materials information and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations risk disclosure trading futures equities and options involves substantial risk of loss 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 and discord is options order flow the impact of options markets on stocks and futures and the influence of market maker hedging flow on price action have a two-step process for trading and 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 of 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 just to just to point out just to be clear give me just a moment I need to make an adjustment to YouTube here okay and just to be clear I'm talking when I talk go to setups and talk about setups I'm just talking about a setup and an underlying and that setup can be taken anyway with either options or shares or futures depending on what I'm talking about so for example if I'm talking about a setup in the S&P 500 there are a number of ways to take those trades ES futures spy shares spy options SPX options so again I'm just talking about using the options market for my analysis but the trades that I talk about the setups can be taken with either futures shares or options and finally on topic questions and comments are welcome and I will be watching the options dash Doug chat channel in discord and the chat and YouTube for your questions and comments all right let's get started and what I want to talk about today my agenda for today quickly go over the news that came out this morning then go through my positional analysis then I'll talk about my plan for the day and then finally I'll talk about setups so first of all news for today I'll just go through this briefly there was a lot of news at 8 30 a.m. consumer spending PCE and it looks like it all came in slightly lower than forecast so there's the PCE slightly lower than forecast slightly lower than previous that was the year for the year for the month in line lower than previous and then at 10 a.m. consumer sentiment came in a little bit lower than forecast and lower than the previous number and the market interpreted all of this as as bullish and just let's take a quick look at the CME Fed watch tool I'm gonna get the latest number here so right now it looks like there's slightly greater than a 50% chance that the market is pricing in no no right rate hike at the next FOMC meeting on May 3rd so right now this is showing 52% chance of a zero basis point moves you know no hike versus a 47.5 percent chance of a 25 basis point hike so really no Chan really no change from yesterday this is about the same as yesterday and there is a change from from last week so based compared with last week now there is slightly there's less chance of a zero basis point move and a higher chance of a 25 basis point move so anyway from yesterday to day with the data that came out this morning no change all right so that was the data for this morning and then let's let's talk about our positional analysis now so I'm going to go to the bookmap chart for ES the S&P 500 futures and this is showing a how the market interpreted the data that came out first of all at 8 30 a.m. the initial reaction was bullish and then the market came back right to the upper edge of the expected move at 9 30 a.m. Eastern time and then moved higher and this upper edge of the expected move is for the week and now the S&P 500 has sliced through a number of levels so before I go on to this chart any further let's take a look at a larger time frame so here is the SPX S&P 500 index just showing price and spot gamma levels key gamma levels this is a 20-day one hour chart let's zoom in most of the spot gamma levels are concentrated up here and these are levels that are provided to spot gamma subscribers for a variety of platforms I'll I'm showing this for thinkorswim and we'll go back to the bookmap chart and show the same levels in just a moment so this is a 20-day one hour chart SPX moved down to the 3800 level and then has rebounded back up to around the 4100 level right let's take a look at another thinkorswim chart and this is for today this is a one-day one-minute chart again SPX showing the spot gamma levels they're in play for today and note here the call wall at the 4065 level and the SPX is trading above that level the call wall and that is typically a level of resistance right so those are the levels that are in play for today and then the next resistance level up above that was the 4080 and the SPX is trading above that as well and here's the 4100 level up above and let's just go back to that larger time frame just to point out a couple of other levels here's the put wall way down here at 3800 that's the strike with the largest net negative gamma that can be expected to act as support and here's the 4000 level that is the absolute gamma strike the strike with the largest absolute gamma that's also the volatility trigger that's spot gamma's proprietary gamma flip level and below that level that indicates that market makers position on the gamma curve is negative and they have to trade in the direction of price to hedge their delta exposure and above that level it's just the opposite market makers position on the gamma curve is positive and they have to trade against price to hedge their delta exposure okay so those are the levels the larger time frame and then also the levels that are in play for today I'm showing the same levels on my chart first here the spot gamma cloud notes in this column and these are provided to spot gamma subscribers again for a variety of platforms and for book map they're provided in the form of cloud notes that are updated automatically and right now spot gamma is using a 23 point difference between ES and SPX and I calculated about a 30 point difference that's what I've been using for most of the week so I'm showing some of the same levels in my own column of cloud notes here so these are my cloud notes here and I'm showing here's that 4080 resistance level didn't really act as resistance here's the 407 spy call wall and price moved up above that but that may be acting as resistance and then here is the 4065 SPX call wall and note the upper edge of the expected move that's for ES and ES is trading above that level as well so the S&P 500 is trading up into territory it has not seen for a couple of weeks two or three weeks all right so that is the S&P 500 I'll talk more about this when we when I talk about setups all right so let's talk about shifts in levels now and for SPX there were no shifts in levels so the volatility trigger put wall call wall and key gamma strike all remained the same levels and we'll take a closer look at the gamma levels in a few minutes and see exactly well where those levels come from and for spy the volatility trigger did shift higher from 400 to 402 and the call wall shifted higher from 405 to 407 and in the spot gamma AM founders note they attribute that that move higher to actually puts being added to the 405 level rather than calls being added to the 407 level so the call wall is a strike with the largest net positive gamma so if puts are added to the 405 level that in enough quantity that level level no longer is the level with the highest net positive gamma put gamma is negative call gamma positive so 407 becomes the call wall and anyway that that is an increase in the the ceiling for the spy and S&P 500 all right so those are the shifts in levels for the S&P 500 and for QQQ the volatility trigger shifted higher from 309 to 315 all right so let's go back and let's go take a look at the gamma charts that I was just talking about this is the SP S&P 500 SPX showing the absolute gamma levels this is the zero line with negative gamma or put gamma below and show them with the teal bars and call gamma or positive gamma shown above with the black bars and this is market makers position at those strikes so this is the 4,000 key gamma strike or absolute gamma strike here's the where's it way down here 3,800 the put wall strike with the largest net negative gamma not really in play and then here is the 4065 level the strike with the largest net positive gamma and note that is the and I've been talking about it all week that is the short strike of the JP Morgan collar that has probably already been rolled today I'm not sure exactly when they roll it but it expires today and that will be rolled and at some point we'll have the new strikes for the JP Morgan collar and note that this in the last couple days the gamma at this level has increased as it has become closer to expiration and closer to at the money and the same with the 4050 strike so that is the SPX here spy for spy the 400 key gamma strike or absolute gamma strike again recall what spot gamma said about the 405 level although the call gamma is the highest at that level the call wall is the strike again with the largest net positive gamma so positive minus less the negative gamma put gamma means that the 407 strike here actually is the strike with the largest net positive gamma and again that's the call wall and the put wall is down at 390 the strike with the largest net negative gamma and while we're on this while we're on the screen let's take a look at the combo strikes and this is for the SP 500 combining SPX and spy into one number in equivalent SPX number and note the large amount of positive gamma we're still above zero here that's positive gamma at the 4060 strike and again that is the that's a combo strike and it's combining the SPX 4065 and spy 405 and 407 into one strike and that comes out to be the SPX 4060 level and just one other note especially for SPX here with the this gamma expiring today the 4065 level this will change on Monday that level that that gamma will disappear all right let's take a look at NASDAQ now oops wrong screen right for NASDAQ we look at QQQ and for QQQ and it's been very bullish this week 310 with multiple increases and the key daily levels for the QQQ especially in the last couple of days so right now the key gamma strike strike with the largest absolute gamma is at 310 and the put wall at 300 and the call wall at 320 all right let's take a look at data now I'm going to look at the gamma notional this is market makers position on the gamma curve and this is shifted pretty significantly this week I'm taking a look back so last Friday gamma notional for SPX was minus 450 and for spy minus 1952 and in the it now SPX is shifted to positive as well as QQQ so from yesterday so first of all this is showing market makers position on the gamma curve at the beginning of the day and in the case of SPX this is a positive number indicating that market makers position on the gamma curve is positive and for an index as spot gamma assumes that traders are short calls market makers along calls hence the positive gamma position and they have to sell futures as price increases to hedge their delta exposure and they can buy back those futures as price decreases so in a positive gamma environment they're trading against price and generally that tends to subdue volatility in a positive gamma environment and on the other hand for spy this is still a negative number indicating that for spy traders are long puts market makers are short puts and they have to sell futures as price decreases to hedge their delta exposure and as price increases they can buy back their short futures so they're trading in the direction of price in a negative gamma environment and that tends to enhance volatility so these levels did shift from yesterday for the S&P 500 both became positive or and or less negative for SPX gamma notional yesterday was 275 today it's 333 so on a slight increase and then yesterday for spy gamma notional was minus 923 shifting to minus 556 today so less negative for spy and then for the QQQ gamma notional actually dropped a little bit it was positive 114 yesterday and today it's 89 so pretty neutral for QQQ all right let's take a look at the Vanna charts now and note that spot gamma did make a change to the algorithm and it makes a little bit more sense today so the way to look at this again remember to gamma notional for SPX was positive and this is typical of a positive gamma environment as price increases market makers delta notional increases and they have to sell futures to hedge their delta exposure and as price decreases they can buy back their short futures so this is showing their delta exposure delta notional on the vertical axis and strike price on the horizontal axis and for spy just the opposite because spy is still negative gamma and this shows that market makers delta notional increase as price decreases and market makers have to sell futures as price decreases and they can buy the back as price increases and for QQQ it's fairly neutral slightly bullish give it a slight tilt all right so that's an illustration of what I was just talking about and how market makers are positioned and how they are expected to trade and hedge in these in positive negative environments all right so that is my positional analysis for the indices Q the S&P 500 and and the NASDAQ for stocks actually my starting point is this spreadsheet that I track the key gamma strike for all the stocks on my watch list and this is I'm looking for an indication of shifts in levels either up for bullish or down for bearish and I'm comparing the previous key gamma strike that's from yesterday in the e column with the current key gamma strike in the D column that's for today and then I color code these numbers green indicating that the number increased from the previous day and red if there was any red it would indicate a decrease from the previous day so note yesterday an increase in the key gamma strike for Microsoft Netflix Nvidia and QQQ and today an increase in the key gamma strike for Meta Netflix and Nvidia and note the double increase for Netflix and Nvidia there so that's a starting point for further research to see if there were any additional shifts in levels so let's take a look at Nvidia for example so I'm going to go to equity hub and I have Nvidia showing here and I'll talk about what I'm doing here in just a moment so first of all this is the history of the key daily levels and other data for the last 10 days so this is showing the for the last two days here the increase in the key gamma strike from 250 to 270 to 275 and note also today there was an increase in the hedgewall from 262 to 265 and that's an indication that traders are closing puts and buying calls or adding calls so so far bullish and also the increase in the put wall and that is all that is bullish three of the key daily levels increasing definitely a bullish signal for Nvidia and some other stocks so some other stocks on my watch list and I'll go through those setups one by one also had multiple levels that increase from the previous day now on the other hand so that that is helping to form one thesis for the day and what I would call my primary thesis for the day was was bullish based on the increase in levels and in the indices and in multiple multiple stocks and that on the other hand it is Friday and for Friday we typically look at a look for a call gamma unwind and that's more prevalent on the monthly explorations but for many stocks especially traders will buy calls that expire during the week they will buy calls that expire on Friday so today there are some stocks with calls that are expiring today and the way to discover that in equity hub here and stocks that have a significant amount of gamma expiring today is to sort any list of stocks I'm sorting my watch list here by this next expiry gamma percentage and I'm looking for a percentage around 30 or above the next thing to look at is this top gamma expiry date and that's today so I see that especially in video here has almost 39% of a gamma expiring today so the way that works is again traders are buying calls during the week market makers are selling calls and they have to buy stock to hedge their delta exposure and these calls 39% gamma expiring today a lot of the calls are expiring today they are quickly losing value due to charm the change in delta as time passes and traders can either take profits they may be taking profits or market may for you know one of a reason market makers delta exposure will decrease due to charm traders taking profits and they can buy back their they can sell their long stock edges and that is generally a pretty reliable strategy excuse me for looking for shorts and stalls at stocks that are call dominated as we can see here above a certain level that's the green shading here indicating call domination above 275 strike and that is also the key gamma strike on the call wall and put dominated below that that's shown by the red red orange shading alright so that the given the increase in the levels for a number of stocks and we'll go through those setups my primary thesis for the day was was bullish looking for a continued move higher and then the alternate thesis was looking for a call gamma unwind in the especially in these stocks right here the stocks on my watch list all with close to 30% or higher of gamma expiring today and let's just we'll take a quick look at some of these other stocks and call dominated above a certain level not so much for Tesla but definitely for Nvidia snowflake and in Netflix alright let's take a look at some setups and I'm going to go with the primary thesis first so let's go to hero now and I'm going to start with Amazon and Amazon had two key daily levels increasing the hedgewall and the call wall let's zoom in so there was a move higher move lower and then what I'm looking at here is this divergence setup long in the morning so those of you who may not be familiar with this chart this is spot gamma hero hedging impact of real-time options and this is showing options trades and market maker hedging activity on this chart in real time the white line is price and the purple line is the hero signal and a rising line indicates positive delta trades traders are positive delta trades would be buying calls and selling puts so what I saw this morning I'm following the purple line first that starts increasing around 10 10 o'clock and then around 10 20 price makes a lower low and then starts to move higher so note the time that's just around 10 20 then price moves higher let's go take a look at book map now and we'll go to an Amazon not a lot of range today but there's that long setup just around 10 20 as traders were taking positive delta positions and know the order flow is definitely bullish looking at the volume dots these green dots showing buy minus sell are definitely dominating order flow very few pink dots so this is indicating market buy orders are dominating aggressive buyers so that's Amazon with a divergence long alright let's take a look at meta and for meta the key gamma strike increased the hedge wall actually dropped and the put wall increased so two out of three let's go take a look at at hero alright so just just to be clear about what I'm doing so I I keep a list I'm I showed my spreadsheet for the key gamma strike it but what I do is I also let's go back to book map I have this C levels column for futures and for stocks and I am filling out a spreadsheet every morning with the all the levels and I want to display the up-to-date levels on my charts so I just fill out the spreadsheet and update the levels on my charts so to do this I look at let me go back to equity hub and I go to the history and I just start in alphabetical order so for Amazon that we just looked at I'm scanning and comparing today all the key daily levels with the previous day and then I just I'm noting that in my handwritten trading journal I just have a list of stocks I'm not filling out a spreadsheet for all all this like the key gamma strike spreadsheet I am looking at this making a note of my journal and then I'm circling the stocks that I am bullish on or bearish on using different colors and for Amazon I was bullish based on the increase slight increase in the hedgewall and also the increase in the call wall and I'm doing that for every stock in my watch list I'm filling out filling out this spreadsheet with the updated levels and then I'm also making a note of my journal whether I'm bullish or bearish on the stock or no have no opinion so again Amazon was the first one in the list now let's take a look at meta and note here the increase in the key gamma strike that was shown on the key gamma strike spreadsheet a decrease in the hedgewall increase in the key gamma strike decrease in the hedgewall and increase in the put wall overall interpretations is still bullish can always confirm with hedging flow and order flow all right let's go take a look at hero now for meta zoom in look at the warning session strong confirmation between options trades hedging flow and price action so let's go back and take a look at book map now for meta and note the quick jump up not much chance to get in unless you are very fast we'll just zoom in on the early session so unless you were really prepared for this and and and we're fast again meta jumped right up to the 209 level did a couple of retest and the primary target was at the 207 call wall key gamma strike and note all the liquidity at that level those are passive sell orders and act as a magnet for price by or seek sellers zoom back out to the full chart and that level has acted as as resistance today all right so that was meta and that was the stack second stock on my list and now let's go back to hero and the next stock was netflix and I'll come back and look at Microsoft there was actually there were no changes in levels for Microsoft and for netflix the key gamma strike and call wall did increase so the call gamma as long as traders are taking positive delta position so they started initially they were traders were buying calls shown by this rising orange line I've separated out the puts and calls traders were buying calls and they've been selling puts continue to sell puts even though they started selling calls and price leveled off and then as soon as they started or I guess actually before they started buying calls again price started to increase traders started buying calls and are moving price higher so as long as traders are taking positive delta positions here this call gamma on one just not gonna not gonna happen trader market makers still have to buy stock to hedge their delta exposure so positive delta trades in netflix continue today and it's easier to see with the total line here hero rising price rises hero levels off really it's about here then starts to increase and this is combining the call and put signal and price moves higher I have netflix on my other in book map on my other computer if we have time at the end I'll go take a look at that right let's take a look at nvidia now and for nvidia it looked like there might be a potential for a call gamma unwind that was at the top of the list with almost 39% gamma expiring today it looks look like netflix nvidia had found resistance at the 275 call wall key gamma strike and just a note from equity hub nvidia on the other hand had three levels key daily levels I mentioned this before increasing the key gamma strike the hedge wall and the put wall all right let's see what's driving price and we'll go take a look at book map so mainly call buyers call buyers are in buying calls market makers are selling calls so they have to continue to buy stock to hedge their delta exposure as long as traders are taking positive delta positions so let's go take a look at book map and we'll come back and take a look at microsoft so here's nvidia assume it on the morning so initially it looked like this 275 call wall key gamma strike level might act as resistance there were a couple of tests and failures here and here but that was uh turned out to be just pullbacks for long entries as traders so let's go start a buying calls let's take a look at hero again and focus off on that action from about 10 to 10 to 11 30 all right so from 10 to 11 30 traders were buying puts and buying calls let's just zoom in on this so I would say up until this time at about 11 30 put buyers were dominating I'm looking at this notional value right here minus 73 million versus positive 66 million orange line calls so buying calls and buying puts positive delta for calls negative delta for buying puts and then over time that that has started to dominate now call buyers are dominating and traders are starting to sell puts and then as they start to buy puts again prices leveled off around uh 1250 uh to one o'clock so call buyers are still dominating slightly let's go back to book map all right the next let's take a look at snowflake just like yesterday beautiful uptrend so for the last couple of days snowflake is really caught a bit higher and snowflake had one level increasing the call wall and that was also on the uh call gamma potential call gamma unwind list and let's take a look at hero for snowflake separate outputs and calls and at least in the uh early morning session up until about 1045 call dominate uh call buyers were definitely dominating and that's what took price up to the 150 level so let's go take a look at book map 150 just being a big round number there was not necessarily any significant uh liquidity at that level let's go I want to take a look at equity hub and see if we can get more information on the significance of that level so let's go to snowflake here I'm going to look at the put call impact chart and this shows the the gamma levels let's zoom in on this and this is going to be similar to the uh s and p 500 and also the nasdaq gamma levels that we looked at that I looked at for my uh positional analysis the exception is that spot gamma makes a different assumption for single stocks than they do for indices so for indices spot gamma assumes that traders are long puts and short calls market makers are on the opposite side of that so they are short puts and long calls hence the volatility trigger gamma flip level from negative gamma below to positive gamma above on the other hand for single stocks spot gamma assumes that traders are either long puts or long calls and so market makers position is always the opposite of that short put short calls so in this case this is the 150 level I know the dominance of gamma at that level both call input gamma and that strike did act as resistance earlier today significant gamma significant gamma level at 150 and notice all that most of the gamma is concentrated below that level call gamma from 150 to 140 and put gamma from 150 down to 120 which is still the put wall all right for snowflake the call wall did increase all right let's go take a look at hero again and again call buyers dominating up to the 150 level and now they've come in again and price is moving higher let's go to book map so there's snowflake definitely bullish order flow look at all the green dots and I've been following snowflake for a couple of weeks and the order flow is typically pretty easy to read and snowflake sometimes for stocks like amd order flow can look bearish and price can be rising but it's a lot easier to read for snowflake notice rising kimla to volume delta all the green dots and market buy orders buyers are dominating call buyers are dominating and price is moving higher all right so there's a request to look at tesla and that was truman that was next on my list let's take a look at tesla and tesla was on my stock list with the for bullish setups both the hedge wall and put wall increased in tesla and tesla's been pretty choppy trading in a range for the last uh at least the last week it seems like and today it's just broken out into a beautiful uptrend just adjust the size of these dots tone that down a little bit so let's go take a look at hero and see what options traders are doing there's tesla and this is just an incredible confirmation strong correlation between hedging flow options trades and price action and we'll see this is driven by call buyers and if you're looking for a long setup in stocks this is what you want to look at traders buying calls market makers selling the calls and they have to buy stock to hedge their delta exposure and as price continues to increase they have to continue to buy stock to hedge their delta exposure all right so that's tesla so really snowflake and especially tesla were the best long setups of the day with call buyers dominating all right let's take a look at a couple of other stocks on my list and any questions so qqq and es yeah we'll take a look at those so let's let's go take a look at we'll take a look at qqq so on qqq this is not not quite an easy read but options traders were generally taking positive delta positions up until about 1230 then they started fading the move higher and that's often the case with indices let's see what call buyers were doing were and this is also typical of indices traders are buying calls and buying puts and it's just a matter of who's winning call buyers or put buyers let's zoom in on this a little bit so up until about 1230 1245 it looks like the call buyers were winning i'm looking at this notional value here positive 537 million for calls negative 442 million for puts call buyers were winning price is moving higher let's zoom out again and now traders have started selling calls and prices leveled off let's go take a look at book map and price is continuing higher it looks like it has somewhat leveled off here at the 319 level and it looks like the 320 call wall is on deck here and note all the high liquidity at that level so price price continues higher that would be the the natural target 320 call wall let's go take let's go back and take a look at hero and see what what options traders are doing right now we'll go back to the total signal and let's just take a we'll take a closer look go back to a 30 minute look back period rolling window period and it looks like options trades shifted bullish or around one o'clock and now that has leveled off back to the full day and the reason i do this is when i shift to a shorter time frame that's something that you can do in the afternoon if you're if you're looking to trade and want to get a more relevant signal from from hero in some cases that worked it's worth taking a look at a a shorter rolling window rollback period look back period all right let's take a look at the s and p 500 now and this is a combined signal for spx spy and xsp xsp is insignificant compared to spy and spx let's zoom in on this so this is combining signals for again spx and spy into one signal for the s and p 500 and this is typically what i look at whether i'm trading uh es spy or spx options and so far today net bearish especially in the morning traders were fading the move then they kind of joined the party and then around 1230 started taking negative delta positions and this from about 11 o'clock on this hero signal was in sync with price action or price action was in sync with options traders all right let's go take a look at book map and we'll wrap it up with the s and p 500 we'll start with the um es and note these levels are different than the from the actual levels these levels should be a little bit higher this combo l3 level and the 4100 level uh are actually a little bit higher and it looks like uh afternoon price has really kind of centered around the 407 level and just above and that's the spy 407 level and note the concentration of volume here in the session volume profile around the 407 level and order flow has shifted somewhat neutral cvd moving lower from about two o'clock on there been no uh there were some iceberg buy orders here as price moved down below the 407 level and stops this shown by this yellow line has leveled off not many buy stop orders driving price higher all right let's take a look at spy and again a concentration of volume between the just around the 407 level above and below all right then finally there's a request to see spx so we'll go to hero for spx now again rji look at this total signal this is give me all the information for the s and p 500 spy and spx both are significant but if you do want to look at spx here it is i'm going to zoom in on just the uh rth session here so this is the actually that's 8 30 let's zoom in a little bit more so this is just starting at 9 30 and spx there's been a closer correlation between uh hedging flow in spx and price action separate outputs and calls and as usual in an index traders traders are buying calls buying puts and for right now in spx the call buyers are winning let's just go back so from this chart it certainly looks like uh spx call buyers are dominating price today let's go back and take a look at the total signal one more time breakdown calls and puts so looking at the total signal the put buyers are dominating uh are leading not really dominating price but three billion versus 1.43 billion for calls all right so rj there's your uh there's your breakdown of the spx plus spy with that my time is up i'm going to wrap it up for today and we'll look for the shifts and levels next monday as this 40 65 level and all the gamma at that level goes away due to the role of the jp morgan collar all right i want to thank you for watching thanks for your questions and comments and i will see you on monday have a great weekend everyone