 Hello, everyone. Welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern time. And before I go any further, let me 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. And let me remind everyone that the focus of my presentation and the focus of the Options with Doug channel and Bookmap 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. The first is planning. I use positional analysis. I look at how traders and market makers are positioned in the options market and then how those positions change from day to day to help develop a thesis regarding the volatility and expected range for the day as well as a directional bias. Other traders may use technical analysis or fundamental analysis. I use positional analysis and I think this is a new way of looking at the market and I think it provides a significant edge. And then the second step in my process is education. Execution, sorry. And I look at real-time order flow in Bookmap and market maker hedging flow in Spot Gamma Hero to confirm my thesis and also to find setups for the day. So the positional analysis, the thesis for the day is just that. It's what you expect to happen but that doesn't necessarily mean that it is going to happen and we'll see some of that today. So again, I always confirm my thesis with Bookmap, with price action, and with market maker hedging flow shown by Spot Gamma Hero. So as Bruce always says, order flow rules. So it's important to develop a thesis but again that doesn't always play out. And questions and comments are welcome on topic, questions and comments. Okay, with that out of the way, let's get started. So what I'm going to talk about today, just a quick review of some news items, economic data that's coming out later on in the week and then I'll go over the position analysis for today in the S&P 500 and then I want to do a review of a setup yesterday and spy just as education and emphasis on that setup. And then finally I'll look at setups for today. So first of all, quickly the news and I cover that because it could have an impact on how traders are positioned and also price action. Now the economic data coming out this week is nothing compared to last week with the CPI report and the FOMC meeting and announcement. But nonetheless it's important to keep that in mind. So tomorrow Wednesday there's a consumer confidence report I believe that comes out at 10 a.m. and then on Thursday there's the GDP report that comes out at 8.30 a.m. eastern time and then Friday the PCE and durable goods orders at 8.30 a.m. eastern time and then consumer sentiment at 10 a.m. Let's go over our position analysis for today for the S&P 500. So first of all this is the ES, the S&P 500 futures and the support and resistance levels that we play today are shown on this chart with the exception of a SPI level that I'm not showing that has been a significant level today and let's just go ahead and take a look at that right now and that is this 382 level that was noted as resistance or as a support resistance level as the founders note and so we can see here that it definitely acted as resistance between 10.30 at 11 a.m. and it looks like SPI is up to that level again. So let's go back to ES now and what I'm showing on my chart are again this is ES and I have two columns here with notes and this column is spot gamma cloud notes and these are provided by spot gamma updated daily and they're showing SPX levels converted to the equivalent ES level so they're adding 25 points to the ES level and then this column my notes and I'm marking the key support and resistance levels that were shown in the a.m. founders note from spot gamma as well as other levels like this this SPX 30 spot ES I'm sorry ES 3850 level and then the there's the SPI 380 key gamma strike shown there. Okay so those are the support and resistance levels that are in play today and one important thing to note is the this level the put wall the 3800 support level held this morning and then again we saw that the SPI 382 level above acted as resistance but you know that just goes to show how important tracking both SPX and SPI levels are if you trade ES. Okay shifts and levels and there were just a few shifts and levels and again remember when I talk about positional analysis I look at how these positions changed from day to day and yesterday there were a number of shifts lower just about all the key levels shifted lower actually that was on Friday and yesterday as well so today the SPI put wall shifted down from 380 to 375 and let's take a look at a note about that and this was noted in the spot gamma AM founders note and talking about put positioning lower at SPX and SPI strikes and noting this addition of puts at the 360 SPI level SPI strike SPI put wall shifted down to 375 and noting that put walls rolling lower are bearish indications from their data from their stats that's what that indicates so that is SPI and also the for QQQ the call wall road lower as well as the key gamma strike so the key gamma strike for QQQ dropped from 280 to 270 so some shifts and levels not as much as the last couple of days and now let's take a look at the S&P 500 charts and actually let me just take a look at one other thing there was in addition to this note in the AM founders note there was also this noting the build in the put positions and you can see the significance this is the zero line and showing the put gamma and the black line show call gamma so let's now let's go to the S&P 500 charts and this is showing the SPX and note that the 4000 level is still the key gamma strike so that's the strike with the highest absolute gamma and 38 3800 is the put wall and that is the level with the highest net negative gamma and the call wall is the and the call wall is the 3835 level and that is the call strike of the JPMorgan caller so my understanding of the JPMorgan caller is that they sell a call and then buy a put spread and the again the 3835 is the call of that caller okay let's take a look at spy now and here you know note the significance as you know as the note in SPOT gamma the AM founders no pointed out the significance of all the puts from the 360 level 365, 370, 375 up to 380 and again 375 is the put wall 380 is the key gamma strike and one other thing that we can look at to confirm that is the shifts in open interest so what this, what the black lines are showing is the first of all we're looking at put data and looking at the volume and that's shown by the black lines and then the open interest change so this this is highlighting the increase of open interest those are positions that are held for at least one day so they were that information comes out once daily sometime during the night and so traders were adding to positions that are you know they could expire Friday or they could be longer term and then let's take a look at some data here and this is something that I watch closely and note every day is the shifts in gamma notional so both gamma notional for SPX and spy shifted more negative so yesterday SPX was minus 590 and today it is minus 677 and spy shifted from minus 1732 to minus 2176 so what this means this is the market makers position on the gamma curve and you can see that it is very negative and that indicates that in this region of the gamma curve traders are long puts and market makers are short puts and as price drops they have to sell futures to hedge their delta exposure and that works the other way around as price rises they can buy back those short futures so that in a negative gamma environment what that does is tends to increase volatility since market makers are trading in the direction of price and just note also that the other measures of gamma have also gone negative or become more negative and that is shown by this spot gamma gamma index as well as the CP gamma tilt so this is a call put ratio adjusted for gamma and it is their proprietary, spy gamma's proprietary measure okay so again the thing to note here is the shift down in the gamma curve and one other way to view that is to look at this VANA chart and the way to interpret that is to I'm just using a pen tool to draw a line through here on my screen and what this is showing is how market makers delta exposure their delta notional increases or changes with changes in price implied volatility and time so the green line shows how market makers delta exposure changes with changes in price and implied volatility and that is the VANA effect and then the black line shows how their delta exposure changes with time as time passes to the next expiration and that is the charm effect and need to know the yeah the let me just note to him that the stream is live now I can't seem to get to that and Carmo let me get back to you on that and let me check for questions in YouTube okay no questions in YouTube okay so putting all this together you know I see that market makers position has shifted more negative further down the gamma curve and let me just show you what I'm talking about with this gamma curve clear that is this right here this is for SPX so it's shifting further down on this gamma curve and again that means market makers are short puts and they have to sell futures as price decreases and they can buy them back as price increases so increased volatility is what you would expect in a negative gamma environment so putting all this together my thesis was bearish for the day and that is based on the shifts lower and levels there has been a decrease or put wall and call wall or put wall and the key gamma strike for spy for example have shifted lower and to me that indicates an interest in lower strikes and someone of a bearish or negative sentiment is these levels shift lower and that doesn't mean that ES and SPX inspire going down every day but that was my thesis and expectation for the day okay I want to now go over a review of setup from yesterday and this is this is spy and I did talk about this yesterday and I want to go over it again for emphasis and this is something that I do every day is develop this I have this spreadsheet with all the stocks in my watch list and I note the key gamma strike and again that's the strike with the highest level of absolute gamma and I note that every day for all the stocks in my watch list and again remember this is from yesterday the color coding indicates that the level dropped from the previous day so this is showing for apple for example that this 140 level was lower than the previous day which is not showing on this chart so I just keep the previous day and the current and what I do at the beginning of the day is I just take this entire current key gamma strike column and shift it over to the right and then I clear out the color coding and then start over for the day so this is what I had yesterday and the important thing to note for spy was the decrease from 390 to 380 and then I note that the previous day this key gamma strike also dropped probably from 400 to 390 so there's at least two consecutive drops in the key gamma strike and again I look at that as bearish that indicates interest in lower levels of price and bearish sentiment okay so that gets my attention and the next thing that I want to look at is the 5 day history and equity hub and here I can see that and I'm kind of this is a scenario taking you step by step through my process so I see that indeed let me just actually move that over a little bit so we can see the numbers so indeed yes the key gamma strike dropped from 400 to 390 to 380 and one thing to keep in mind here this 1216 that was Friday that was the big Friday monthly expiration so I see these other strikes kind of all over the place for the key delta strike the hedge wall call wall now the put wall is held steady at 380 until today and this change in position could be related to the to the 1216 expiration okay so I've got a again this is yesterday I have a bearish directional bias for spy and I've done a little bit of research prior to the market open and that has confirmed that has helped me develop my thesis and then as the market opened and I post this in book map discord and the options with Doug chat room every day I try to get it out by about 945 a.m. about 15 minutes after the open and I rank my watch list from the weakest signal to the strongest signal if I'm bearish and I was yesterday and what this is showing is the current signal for today in relation to the last 30 days and the last five days and this this light gray bar shows the shows the last 30 days so this shows that spy the hero signal is the weakest that it has been in the last 30 days and then this colored section indicates the signal for the last five days so this also shows that spy is weaker than it has been the hero signal for spy is weaker than it has been in the last five days so that is another confirmation of my thesis so now and I usually start at the top of the list when I'm looking for a trade so the next step is to take a look at the hero signal and I see this divergence so hero the purple line and this is showing both call and put transactions is moving lower and while price is making just about equal highs so this you know if you were fast just watching this in the morning you could have you know there are a couple of short entries here or here as hero continue to drop so a couple of short divergence setups in the morning and let's just take a look at the call and put signal and the some sometimes helps to clarify what you're seeing and you can see the see that traders were buying puts as price chopped around you know again giving a good indication of some short entries there and here's how here's how the day played out and spy you know I've noted the short entries here so the way I approach this once I see that you know I've gone through all the setups I see you know I've marked up my key gamma strike list I've confirmed that in equity hub then in the open I sort my list from weakest to strongest I see spies at the top of the list and I note that divergence especially the early one in spy and then I shift over to book map and I'm looking for an entry and I see the bearish order flow here you know this is the first you know I think really good entry or the way you know where I would enter is right here I see the absorption at the point of control that's the purple line and then the move lower and then one key thing to note here is this price target and note the high liquidity at the 380 put wall so there's your confirmation in book map and you know at this point you've developed a thesis you see the hero signal the divergence and you're just looking at book map or I was looking at book map for a short entry let's this is the ES chart so with the S&P 500 you know there are a number of ways to trade it futures contracts spy shares spy options spx options all would have worked yesterday and one final thing that I want to point out is there were some questions yesterday I believe in YouTube about Tesla and let's just go back to this noting that the hero signal for Tesla was strong was at the bottom of this list ranked from weakest to strongest and Tesla was actually moving down yesterday and there was a question about that and one thing to keep in mind is what this is showing is the it's comparing the current signal with the last 5 days and the last 30 days and let's take a look at a Tesla chart so this is Tesla and think or swim and note the downtrend from pretty much the September expiration until now and so if you're saying that the hero signal is strong compared to the last 5 days and the last 30 days that's not necessarily saying a lot because Tesla has been so weak so it may be yesterday it was stronger than it has been in the last 5 and 30 days but that doesn't necessarily mean that it is strong so again keep in mind about these things are showing so now let's talk about some setups for today and I'm going to go through the list I'm going to hit a couple of highlights from the list that I posted this morning and let me just bring that up so this is from today this is 1220 today and again I ranked my hero signal from weakest to strongest and I'm going to hit a couple of highlights here and first is Moderna and this is a new addition to my watch list I'm not that familiar with price action in Moderna yet but let's go ahead and take a look at it and it was actually a bullish setup so let's take a look at Moderna and let me just check for questions and there's a question on YouTube yes the list that I was showing for the spy example was from yesterday and then I just showed the list from today with Netflix at the top and that is from today so the previous list that I showed was from yesterday for the spy example and then the list that I just showed was from today so this is Moderna this is showing a very strong correlation between price action and options trades in Moderna and let's break out calls and puts and we can see that primarily calls are driving I'm going to zoom in a bit and I would consider this somewhat of a divergence here as both the put line and call line were fairly flat as price dropped down here to to this level at about 945 and then price started to increase and let's go back and look at the total signal so there's not much of a lead effect here but I would definitely be see this and be watching for an entry point for a long and book map so now let's go to book map take a look at Moderna and I've highlighted some pullback entries so the first thing to note is the pullback to the 190 hedge wall and then this moves higher after that so that was really the first entry point and let's I'm going to zoom in on this kind of focus mainly on the morning session here and so we first note that you know at this point again looking at hero the hero line was flat while price was dropping and at that point the divergence set up so I make a note that I'm thinking long entry and also let's just go back and take a look at that the signal for Moderna from 1220 is still weak so no clue there but again you know this you know looking at this in real time I see the flat hero line with a good price drop next step I see the 190 hedge wall as a potential reversal level and you can see that price does first see the aggressive buyers coming in there with the green dots and then you know just look for a pullback entry and finally you note this targeted at 200 key gamma strike and like some higher price stocks liquidity is usually at the 5 and the 0 levels and that is the case here with Moderna so an entry down lower with the first price target at 195 and then secondary price target at the 200 key gamma strike and again based off a slight hero divergence and a reversal at the 190 hedge wall so that was really just about the best setup that I saw today and let's see what else is in play for Moderna today looks like if Moderna continues higher the next stopping point next target is the 205 level let's go back and take a look at a hero and see what it is see what hero is doing right now and I'm going to change this look back period to a shorter rolling window so now I'm just looking at the past 30 minutes of data and this is showing that traders are starting to sell calls and buy puts come up to this level so if I were looking for a bullish entry to head up to that 205 level then I would wait for this to turn around see if there's any additional insight from dropping that rolling window lower okay so traders are taking advantage of the higher prices to sell calls and buy puts so no in my the way I see things no long entry at this point alright let's take a look at Nvidia now I'm going to arrange these in alphabetical order and pretty choppy day in Nvidia and I thought there was a and need to know ask about separate videos on my strategy well there are a couple things I have done I believe three pro trader webinars for book map and those should be available on the book map YouTube channel and also I did 6k studies for spot gamma but I don't know that first of all that you know that was a paid event and I don't know if those videos are available for anybody who wants to see them later you might contact spot gamma and I go through my approach in detail in those 6k studies so what I saw here was a divergence setup for a short in Nvidia watching hero drop especially from here to here as price was increasing setting up a short setup that took a while to play out so let's go take a look at book map now take a look at Nvidia and need to know I have also written a number of articles for the spot gamma blog those are free to everyone I'll post a link after my webinar in book map discord so this is what I was looking at this is not nearly as good a setup as the setup in kind of setup that I like to trade but there's the kind of a series of lower highs here and then this break of the trend line with a 160 put wall as a target so more of a scalp again with this 160 put wall liquidity as a target there's a two point scalp in Nvidia and note this reversal was at the 162 hedge wall and now let's take a look at spy and there were a couple of couple of divergent setups that I saw I'm going to zoom in a bit here and the first was the setup right here as heroes starts to fall and then price follows a little bit later so that was the first divergent setup and so that was a divergence lower and then this one I think he's even more clear as this with this divergence higher and let's just see what traders are doing here so no clarity by breaking this out into puts and calls really or no additional clarity I don't think alright so let's go take a look at book map now and here is the setup lower and let me just point out and this is something that I don't look at enough but I should I'm going to go back to spot gamma and note here this is showing potential support and resistance levels and spy and there's that 382 level and somebody pointed this out asked a question about this in book map discord this morning Zen 550 and I appreciate the question again it's something that I don't look at enough but it was significant today so again thanks for pointing that out let's go back to book map looking at that then we can anticipate that 382 LG2 that's large gamma 2 level could potentially be resistance and in fact it does act as resistance noting the divergence in spot gamma hero looking for a short entry at that point and one interesting thing to point out and this is often the case and with spy is how significant the round number levels are in spy and I've drawn rectangles around all the levels where I think there's a kind of a significant interaction with a round number level and it doesn't necessarily have to be a spot gamma level within a few ticks so there are quite a number of of those levels here and remember this morning the reversal in ES was at the 3800 SPX level and that also corresponds to the 378 spy level so just note all the number of rectangles here again showing some sort of significant interaction at a round number level to trade ES again I think it's important to keep track of the spy and SPX levels all right let me just check for questions and RT ask how how did you know to go long moderna when your list had it in the middle as neither weak or strong and you know that's where the second step in my trading process comes in so let's go back to moderna and working my way down the list if I got that far, moderna may be something that I want to trade and we can take a quick look at equity hub and see if there's anything that would have gotten our attention and we saw that it was in the middle of the list it might not be where I start but there may be something else that got my attention for moderna but anyway assuming that it did the order flow and the hedging flow confirmed this rally so that's the second step always use order flow and market maker hedging flow to confirm your thesis and just based on the position of the list I would say I had no thesis for moderna and let's just go take a look at hero and if it had caught my attention let's just see if there's anything else in here any changes in levels that would have caught my attention and really the only thing is the increase in the call wall from 200 to 210 so the key gamma strike has held at 200 for the last five days and we can take a look at one other thing and now this gets my attention so this is the skew diagram for moderna and what this is showing is implied volatility which you can equate to interest and options as demand for calls or puts increases you expect the implied volatility to increase and what this is showing is implied volatility for calls above the delta 50 level at the money strike so this is calls above and puts below and this is a change for moderna showing the increase in call interest shown by this sloping line and this is most likely for the calls that expire at the end of this week so the dash lines are showing the next expiration which would be this Friday for moderna and the solid lines are showing implied volatility for the expiration that's about or approximately 30 days out so this does catch my attention is from Friday to yesterday there was an increase in implied volatility and also this line is sloping up indicating an increase in calls interest in calls and also note the increase in the call wall so now that is enough if I did my if I was interested in moderna and wanted to trade this in my pre-market planning I would note this and that would lead me to have a bullish thesis again the increase in call wall from 200 to 210 and this is showing the increase in interest in calls and the increase in implied volatility from Friday to yesterday and let me just show you for comparison the chart for spy and note that this line all these lines are sloping up on the put side but they're flat to slightly down on the call side this is very typical of spy is there is spies used for hedging typically and there's always an increased demand for puts in spy and spx so that I hope that answers your question so again it takes some time to put all the pieces of the puzzle together and I look at a lot of stocks so potentially without moderna being on one end of the list or the other I might have missed it but if you dig further you can see the clues here that again the increase in interest in calls above was a clue that you might want to look for a long entry in moderna and then the order flow and the market maker hedging flow confirmed that and finally let's take a look at Tesla and as usual there is a very strong correlation between options trades, market maker hedging flow and price action in Tesla and it looks like mostly puts driving price action and let's zoom in on this this morning and I would take this as a divergence lower inputs and let's just go back to the total signal here and let's now take a look at book map go to Tesla so the order flow shows very good very good set ups here break of this trend line you know you could have gotten in on this sell sweep here or the break of the trend line and a pull back to the VWAP to VWAP and then pull back entries below the first target the 144 liquidity there and then the primary target is this is the 140 put wall and the liquidity and notice that it has been in there since the open and that is the level with the highest liquidity that I see on the chart here and that is the clear price target let's just take a look at cumulative volume delta but mixed signal here definitely definitely bearish here as to these pink dots these are buy minus sell so this indicates that sell market orders are dominating from this drop from 147 all the way to 142 so definitely bearish order flow after the pull back to VWAP and the move lower okay my time is just about up let me take a look and see if there are any final questions and Mike Walker asks will Tesla see 140 today and you know who knows let's just go check Hero again and let's change the look back period to 30 minutes so right now if I were looking for 140 then I would look for Hero to drop lower so I would say if this drop had continued I would say for sure 140 is next but I would again I would look for a you know if I were looking for short entry I would look for Hero to start dropping again and then that 140 would be the natural price target and RT, RT asks the put wall call walls correlate to high areas of liquidity yes all the time that is the definition of the put wall and call wall the put wall is the necessarily liquidity in book map but you often do see liquidity at those levels but the put wall and call walls are the the put wall is the level with the highest net negative gamma so that is the you know that's based on open interest in the option chain and then the call wall is the level with the highest net positive gamma and often liquidity is that you see in book map that's the orders that are in there for the stock are concentrated at those levels not always but that is often the case and there's a question we want to see ES for 30 minutes we can do that let's go back to 30 minutes it's often pretty can get pretty choppy as you drop that rolling window period so there's ES and one last thing I want to point out there is a new version of Hero now I'm still using the old version but this is the new version that shows the dark mode and I'll start to incorporate this as time goes on okay check for final questions in discord and I don't say any okay so I'm going to wrap it up at this point thank you very much for attending and thanks for your questions and comments and I will see you tomorrow thanks again bye