 Good morning traders and welcome to the book map ProTrader webinar series for December 7th Today we have Brent Cachuba of Spot Gamma And he's going to go over options levels with stocks and futures And I need to go through the risk disclaimer here. We've kind of updated this so a general disclosure and risk disclosure And then I'll introduce you to to Brent and then we'll get started here the general disclosure All book map limited materials information and presentations are for educational purposes only it should not be considered specific investment advice nor recommendations live trading is in simulation demo paper trading mode and Strictly for educational purposes live trading executed in simulation cannot accurately represent realistic trading performance risk disclosure trading futures equities and digital currencies involves substantial risk of loss and is not suitable for all investors an Investor could potentially lose all or more than the initial investment risk capital is money that can be lost without jeopardizing one's financial security nor lifestyle Only risk capital should be used for trading and only those with sufficient risk capital should consider trading past performance Is not necessarily indicative of future results. You can read the hypothetical performance here if you like and A little bit about Brent. We've had him now. I don't know. This is the third time or fourth time something like that Yeah, and Expert trader here Complete expert in in Options for almost 20 years. He has institutional background with Bank of America and credit Swiss And equities broker as well and also from the algorithmic sales and trading as well He also worked at Wolverine Representing the electronic derivatives trading platform and now currently Brent is trading some proprietary strategies and runs spot gamma comm which publishes Publishes various metrics on options data And here is all of Brent or spot gammas Contact information here. I am going to paste this into the chart for you guys These are special offers also from Brent one more thing I need to mention to you guys here is that There is Kind of giving you a little bit of insight before we release this There's a code. I'm going to put it into the chat for you and I'll mention it again For those of you who are new in here on new to book map For the first month you can get 50% off All right, so it's all for you know people new to book map if you want to give it a try so I'm going to put a special coupon code into the chat there for you and You can Input that in when you purchase and you'll get the 50% off just for this first month. Okay? All right guys, we were gonna offer it next week as well That 50% off, but it's with this pro trader webinar. The idea was that if you guys are New to book map and you want to get started immediately. Well, we're gonna give you the coupon right now So you can get started. You don't have to wait for the sale next week Okay, it's gonna be you know the the Christmas special, you know, blah blah All right, so let's see here Let's just get started I see some questions already, but we'll just get started here and Brent I'm gonna pass you the presentation great Let's see here. So I'll make sure I have my right screen set up All right. Can you see that? All right Bruce No I think there's a There you go. Yeah One day. I'll get better at this stuff. I said it every time Thank you all for taking it's actually I'm sorry, so I'm seeing it vertically I think you have one of your monitors. Yeah It's still quite small. It's it's like on a vertical monitor. It looks like That doesn't seem right This is what everybody wants to see me do right now is muck around with Do let's see I do have a vertical screen, but I'm not showing on that one. So it's a little bit stranger. All right, let's see There you go. All right. Yeah, I see that. Yeah. All right. There we go. Looks great. Looks great. Much more professional now Thank you all for showing up today I want to talk about two things one. I talk often about you know futures and the ES futures I want to touch on stocks. So I'm gonna do kind of a combination thing, but they're all gonna be Kind of tied together here So one of the things that many of you are probably familiar with are the record levels of call options that we've been seeing in the marketplace and What's so interesting about that is that the options market, you know This is kind of a story we've been talking about for a while But it continues to become a larger and larger piece of the market and piece of underlying liquidity So if you see this chart here from Goldman, you could see that based on the amount of hedging that the options require The no daily notional traded if you look at how big on a notional value the options market is compared to equities It's become sort of the tail wagging the dog And what I mean by that is you can look at a lot of the top Not just an ES but also in single stocks and see how the options complex is really driving You know the the underlying liquidity and I bring that up for two reasons one you need to really pay attention to You know where options are showing up and trading In your single stock names if you're trading single stocks, but two You can't just look at ES if you're an ES trader You can't just look at that in a silo and what I mean by that is you can't just look at ES and ES liquidity and ignore all that's going on in spiders and And some of these other kind of derivatives of the S&P as well So it's a it's all linked together, right? So if you if you consider this and and many there are many of you are probably familiar with this idea or how this works But the S&P index is really what drives the price of the S&P, right? so they take all the individual stocks on the open and all the individual stocks that are used to that are indexed to the S&P 500 and The value the sum of where those are trading is what the value of the SPX index is so you know Those underlying stocks are the driver of the value of the S&P, right? But ultimately there's people that arbitrage the price of spiders and ES and all these Individual you know like VOO which the Vanguard S&P all of those are arbitrage together, right? So that they all kind of link and what's interesting about this is that you would assume that sort of the feedback loop goes You know that the ES and the individual stocks kind of control things But what you're going to see when I show you in a slide a minute is I think what's happening now is you're getting spiders is What's kind of dominating the options complex and I think that is having a major feedback mechanism back into the ES and So hopefully, you know, I'll be able to sort of show how that works for those of you who are familiar with my levels This is what the combo strikes are where we really pay a little bit more attention or weight the spiders more than the SPX And so again, it's very important and this works for the NASDAQ as well. The NASDAQ futures complex is not Excuse me the NASDAQ options complex the NQ index is not very big It's the QZ is the big driver of that complex and that's been that way for quite some time Same thing with Russell the IWM is much bigger than the RUT index options SPX the big contracts in options has been the driver Historically, but that's really kind of switched recently and it's it's quite an interesting time So just to give you one quick metric, you know, we showed you that Goldman slide. This is hot off the press. So to speak this is the amount of buying to open premium in Calls and puts for broken down by different sectors, right are different categories. So this is equity call premiums This is how much people are spending to buy calls And then you can see how much they're willing to buy or spend on puts it's way down here And what is relevant sort of this conversation is note index options They're actually down 2% from a from a volume perspective While obviously equity premiums are massively so the index complex is not participating in this rapid rise of Options trading and options volumes. I'd also note that futures volumes are off as well So what we're seeing is equity people are piling to equities and that means that spiders and the ETFs which are seeing, you know, this This drive, you know, the drive is not the same as individual stocks But it is the same in spider spiders for some reason has escaped sort of this equity call premium The drop in equity call premiums. I think if you look at like XLF, you know, XLE those those types of ETFs those are off quite a bit So let's just give a brief comparison of those three Areas, right? So when we look at gamma, I'm assuming that many of you are familiar with our Conversations on gamma and we've done some primers and things like that here with with book map You can watch those videos if you want to sort of dig into exactly what we're talking about with gamma But essentially what we're doing about measuring gamma is we're measuring the size of the options market gamma is highest for options that are at the money and Gam also increases the closer to expiration you get so really what game is simply telling you is The it's waiting the size of the options market, but it's also waiting calls versus puts right So if you consider a positive gamma number, that's telling you there's a lot more calls And there are puts in the marketplace and the more negative or the more towards zero this number gets and as it goes Negative that's simply telling you that the market has more puts The S&P has more puts than calls right in terms of where that gamma waiting is So if you look at the size of spiders, and this is as of Friday You know you have two billion dollars in spider gamma and you only have six hundred million spx gamma The levels sync up as you can see here You see three seventy is our call wall or sort of where the most positive gamma is is laid out and that match So the SPX was 3700 so the two are Insync more or less right, but the size of spiders is way bigger than Than SPX and so this matters when you're sort of laying out the options level and where liquidity for futures may show up because I believe Market makers still use futures to hedge at the S&P's But where spiders are trading right now may have a little bit more of an impact in ES than where sort of the bulk of S&P open interest is and I'll show that in a live shot in a second Many you're probably going to ask about ES options I I used to look at the size of the ES options complex and I stopped bothering, you know about six months ago If you just consider the volume from Friday, you can see that we traded about 200,000 contracts in the ES options SPX and SPY traded over a million spiders obviously traded about you know a lot more than a million and then if you just consider the open interest For SPX in December alone, which is a humongous expiration that could be a real day on your counter to mark Obviously not just with the Tesla inclusion in the quarterly rebounds But there's a lot of open interest expiring and we think that can mark a turning point so for those of you who Want to mark sort of very important dates 1216, which is the big VIX expiration and the 1218 is a big Quad witching expiration those could be key turning points in the market But aside from that note that the open interest in December just in SPX is almost two million calls and three and a half million puts Look at the open interest in it in the for the entirety of the S&P E-mini options. It's only 1.8 million and that goes across all expirations. So you just see the ES options complexes is quite a bit smaller So I wanted to show quickly here our our screen And what you can see here is What we show is one this is sort of what we call the call wall right and what the call wall is is where the most positive gamut is trading in the SPX and then we have this idea of the combo strike So what this combo strike is actually showing you is is actually showing you a combination of spider options and SPX options and what we do is we kind of blend that open interest together and back out what the relevant prices are And so what you can see and if you've been sort of tracking our work that call wall has been at this level And it's also 370 spiders for quite some time meaning Basically all of last week and what we think how does we think this works is when you have a whole bunch of options Tied to a certain strike right tied to a certain level in the S&P you get all sorts of Options forces that serve to sort of draw the market up into that strike And that's a combination of the way that dealers are hedging and the way that other people other entities are hedging And essentially time decay in the market right if you if you consider that these are all long calls or dealers are are long those calls as the expiration moves to the Friday expiration as We mark forward in time those calls are decaying and as those calls are decaying dealers who are short Short futures versus long calls will have to start buying stock back Right they'll have to start buying futures back and that has a natural sort of way of sort of levitating or bringing us into sort You know pinning this large Interest area and then what happens is you kind of get especially close to these big ground numbers with people like You know that will also draw more hedging and more flows to these specific levels And so you end up getting is this idea of it being a resistance point But it's also kind of a pinpoint right it kind of draws people draws the market in and holds it there And you'll see the liquidity form in these kind of big areas So it's interesting about this 36 89 is if you look at where spiders are trading You can see that the round number and spiders will be significant support resistance levels in the ES So, you know, there's an arbitrage There's a difference obviously between 37 100 in the ES Compared to where 370 is trading in spiders, right? And so what you may want to note is, you know, where's 370 in spiders and where does that correlate or correspond to the you know, what's the equivalent ES price, right and in And does the market react to that because of the amount of open interest in spiders and how that needs to be hedged That may be sort of wagging the SPX dog if that makes sense and so Really what you want to do I think if you are an ES trader is you want to pay attention this goes for cues and NASAC as we sort of said before you need to Be aware of how big the options complex is in those ETFs and maybe wait those a little bit differently When you're sort of forecasting or setting up, you know, the different trade levels for for your day trading plan and if you kind of zoom back here, I think the For the number one combo strike level is but you know kind of as you pull back We'll see is there are odd strikes that we mark with these combo levels, right? 3715 is not a very big strike in SPX But what that's dominated by is the size of the open interest in the spiders And so these different levels you'll see clay out and will be significant as sort of the market moves and shifts around right and Again as we kind of pin this high open interest area What you're going to see is liquidity as shown in bookmap here You'll see liquidity sort of form in this area You'll see things kind of pin and then as we get closer to that 1218 expiration as it's open interest source starts to Unwind or wear off as it decays you'll see kind of the market ranges expand and you should see things shift around, right? But the important thing I guess I'm trying to convey here is that it's the it's the ETFs right now that are really kind of controlling The way that we're viewing the market and not necessarily the the index So I'm gonna stop there for a second and see if anyone has any questions as I'm gonna shift a little bit to single stocks Which sort of runs what we're talking about here But are there any questions specifically on that spider SPX relation and how that may feedback into the Yes, nothing yet, but let me let me let me see here. There's a few different questions already Well first off David Which you know, David's been really active tweeting David Blake here and loves your levels and just You know things you're basically a unicorn here Thank you Works Let's see Steve is asking do your levels work better on the ES compared to the NQ Yeah, I think the This the size of the options complex and the SPX is bigger than the NQ just because you know SPX is still pretty big, you know, even though spiders are so much bigger SPX still holds a lot of size And so when you look at the combined amount of notional value in the SPX plus the spiders It just heavily outweighs that of the NASDAQ. The other issue is that if you look at the components of the S&P There's a lot more obviously hot tech names and momentum names in the Q's And so I think the Q's can also be pushed a little bit more by what's happening in the single stock underlying single stock names So I think single stocks weighs more on or pushes the Q's more than the than the ES so The biggest levels in the NASDAQ matter a lot whereas I think you can You can zoom in a little bit more and look at some of our smaller levels in the S&P that are a little more accurate Whereas the NASDAQ I would just pay attention to maybe the top two or three levels as opposed to the S&P where you can look at sort of five different levels Okay, let's see Jeff is asking which I don't quite understand Jeff how You configure your lift bid and ask oh This he may be talking about Walters Okay, window here below Trade this is from our friend Walter who works a lot book map. He offers this This liquidity indicator here below so trade to win is his site Okay You know actually I am let's see here's another our dealers typically net short or Net long on the call wall. Yeah, so It I think it really moves into a blend. So we typically Would view the call wall as dealers being short futures So they're long they're long calls at that call wall, right? but I think as you kind of get closer what ends up happening is a Different mix of volumes come in and what I mean but what I mean by that is that if you were to look at the Volume in options on a Monday Wednesday Friday, there's an expiration each on Monday Wednesday and Friday and so what happens is you get a ton of day traders that come in on Monday Wednesday and Friday and they add a ton of volume in and that daily volume That doesn't show up on our gamut charts because it you know comes in on Monday at the open and it's close You know it expires at the close. So what you end up getting is? The you know a mix of different traders doing different things and so, you know, they're but they're Their view on the market is a day out, right? They're they're gonna sell a straddle or a strangle around 3700. They're trying to bring income, you know They're taking a big swing. So it's a mix of volumes and You kind of bring up an interesting point here because that intraday volume can matter a lot If you see a lot of times into the close There'll be really big moves right in the last five minutes of the day You'll have a 5 10 15 handle move a lot of times I think that can be because The dealers need to adjust their book into that 4 p.m. Close because they need to hedge out or adjust hedges Or something, you know, arguably more nefarious kind of around that that volume, right? so in other words if if on the on the let's take today for example if There's a ton of volume going off at 3700 today. We may see a huge spike up in the market into the close because you know 3700 there's a lot of cash premium tied to Those options are all tied to the four o'clock close, right? So there's a lot of premiums That are going to settle based on where the markets going to close So maybe we shift up really quickly at 30 into 3700 at the close because today's options volume was so big, right? And then tomorrow kind of pull that pin because there's no expiration tomorrow Hopefully explain that, you know, in a way that makes sense Okay, I Mean like, you know, I would probably like derailed this whole webinar I'm just fascinated by what you just presented about the SPY and and and compared to the ES and SPX Very odd and strange I Mean this is a major like a major shift like a kind of revolutionary. It looks like to me, but You know, I don't want to I don't want to any any comment on that just to begin with like yeah Yeah, I think, you know, it's it's a it's a it's a small point And hopefully it was sort of made clear and sort of just a very short, you know Few slides to talk about it, but I think it's a You know, it's very strange, you know of all the exchange if you look at all the individual exchanges I'm not sure how many are you familiar with with how that works, but there's I think there's on all there's 15 now options Exchanges, but the SPX is listed only on the SIBO exchange the SIBO Is the only exchange that has lower volume this year than than any of the other listed exchanges and that's because the SPX index was forever kind of their their honeypots so to speak and and that has You know the volumes there have dropped Or really stayed flat at you know kind of at best Whereas spiders obviously done, you know quite a bit more volume and then you have VOO and some of these other You know other S&P linked products that are popping up And so that's it's really fascinating and and that is a derivative or whatever happened is a result of the you know the COVID crash in March Things before the COVID crash are not like that. They're you know entities I think were blown up During the COVID crash meaning a lot of volatility, you know trading entities And then I think that's really what the ramifications been and then you know people retail and the like have been using spiders as a way to express their long S&P views So it's really pretty amazing shift. I've been I've been waiting for it to shift back But but if anything the kind of the chasm has has widened there in that respect And then when you look at the fact that you know the futures is off as well You know it just sort of highlights the importance of of knowing where spiders are and I think that maybe a different A different way of looking at it maybe then than a lot of futures traders have been you know in the in the past Very very weird Jason's asking here about is there a way that one can see gamma Becoming more positive or negative and what amounts Yeah, so you know really again it's kind of a it's a it's a function of where you know how many calls are trading you know relative to the puts and so You know I think you can kind of extrapolate what's going to happen in the future just based off of recent trend You know it's it's unlikely that when we have record call volumes in the market doing so well that we're going to suddenly You know flip to calls without a catalyst and that's what I think the explorations are so important because if you consider You know this the upcoming expiration that's going to occur on 12 18 Dealers who are you know if you just consider all options, you know That are all listed options, you know just consider this chart This is telling you that people are long tons of call options 12 18 expiration is the most concentrated expiration on me by that is most options have very large Gamma levels Expiring on 12 18 So if you think about what that means dealers who are short calls on net right in single stocks if you add up Tesla and cues and you know the whole all the listed options Dealers are long stock versus those short calls right because because if if everyone and their brothers buying calls dealers are short those calls the way the hedges to buy stock So on 12 18 all those options expire right they're all gone well dealers still have all their long hedges right where they have to do with that well they have to unwind those hedges So that's why those explorations can be such important inflection points because what can happen in this situation when everyone's long calls if you suddenly unwind You know the dealers unwind their long hedges that could put selling pressure on the market and in this market just seems set up that no one is hedging downside So what can happen then suddenly you know it's a scramble right to catch to catch downside or to or to hedge your downside risk. A great example of that is what happened into August you know on the the high in August was around those Tesla and Apple splits everyone bought calls because you know hey free money stock splitting you know look at us and that's what this peak is right here right and you can this peak was right before the 10% drawdown You know that came with that August sort of call ramp unwind and so you know this is the same situation right this is the exact same thing. And what's so interesting is I can't shake the feeling that Tesla is going to have something to do with you know this addition to the S&P is going to have something to do with you know an inflection point in the market. You can never be sure but you know just can't can't quite shake that that feeling. So that's again on 1218 which is about 10 days so who knows this could ramp up again to retest the August highs. And then what's the catalyst to kind of get people selling and to get people worried and get people hedging you know hedging the downside well it could be this expiration which again dealers are kind of needing to unwind that they're they're big long hedge position. Okay excellent and yeah that's that's it for now. Okay so so let's talk about a couple of single stocks just to touch on this. So I'm going to talk about Tesla because it's such an interesting stock to watch obviously right now. And so for those of you who are not terribly familiar with the mechanics of how the S&P will add on 1218 and I know a lot of you don't follow this but again because it's going to be quite possibly one of the top largest stocks in the S&P index. It could have quite an impact on the way the S&P X the SPS we calculated and the way it's going to move and consequently that's going to have that feedback loop back into ES right. And so on 1218 at the close of 1218 anyone that indexes to the S&P 500 those are I think it's about $5 trillion of assets indexes to the S&P 500. So you have pension funds you know all sorts of large asset managers that only underlying individual stocks that comprise of the S&P as they track the index itself. So they're all going to need to own Tesla at the close of trading on 1218 and the way that they do that is banks you know Bank of America and Credit Suisse and the like will actually buy Tesla. Going into the close of Friday and then on the close they essentially put in what's called the market on close order and they flip the stock to those big pension funds. On the close of trading at 1218 and they do that because the index is calculated based on the closing levels of the S&P on Friday night so all the indexers want to own that. Own Tesla at at the closing price of Friday night 1218 or a little bit better that way they show that they're tracking the S&P accurately. And so the banks will go out ahead of time to all these different pension funds and they'll try to get a deal with them right Bruce is going to index the S&P said Bruce I will guarantee you the close of trading. On 1218 you know how much notionally you're going to agree to give me and Bruce will say okay you know I need to buy a billion dollars notional Tesla and I'll say great. And so I know as a dealer I need to buy a billion dollars notional Tesla to sell to Bruce at the close of trading on 1218. And so that's why that's kind of an important date and that's why the stock has been sort of driving as a lot of people are obviously trying to front run that trade or get in front of the index as everyone knows. And so if you look at the way that options have been trading around this is kind of interesting because you can see as we kind of pop back into the slides here. You can see that the S&P news was added on November 17 or 18 and the stock obviously had a pretty big bounce but what it did is it generated massive amounts of call buying for reasons you can understand. And so what we've been tracking is that wherever that largest call position goes is where the stock will rise up and then we'll pin. So what happens is and this is a phenomenon that works in the S&P and any other single stocks will Tesla is just an example because you know it's it's such an active name but the weekly options so every Friday is where there's a bunch of options expiring. Will be the where the largest volume goes in terms of the call so basically what I'm saying is today is Monday and most people will start buying calls that expire for Friday and Tesla. And that's essentially what you're seeing here everyone piled into options that expired you know on this Friday which is the 20th. Which is somewhere in here and it was 500 strike options the stock went up to that and pin that level exactly why because as we get closer to Friday all the 500 strike calls start to decay right so. Initially when people go by calls dealers have to buy stock to hedge themselves but then as that call buying subsides a little bit and as those calls start to decay right anything at 500 or over starts to decay. And the stock kind of pins that level then what happens Monday the day reload well where did they reload they reloaded to 600 so we marched right to 600 and we kind of pin that area all week. And now what's happening in the stock well it's up I think as we saw before good 20 or 30 bucks so far today and why is that well. Friday's data said that 600 was the large strike call strike area but now it's shifting up to 700 I believe so if you kind of just look at where the Tesla volume is so far at the moment as I bring up my broker system here. So far today we've traded almost 300,000 calls in Tesla and only 100,000 puts so this is all call buying driven. You know, hedging volume, you know to for Tesla trade a million calls that's a lot and you can you can sort of watch as those calls take up this volume is just hedging volume right. And they'll and they'll keep kind of sweeping this thing up and they'll keep going and you can and you can watch this happen and all sorts of different stocks. What's fascinating is typically will happen on Friday night and a lot of these heavy call names like pl tr is a great example of this on Monday you'll see a big unwind. And this is sort of tied to what I was talking before about the December 18th expiration is that dealers who are long a bunch of stock will need to sell that stock right though they'll need to unwind that stock. The caveat to that is of course if been caught call buyers step right in immediately on Monday and start buying that stock. So ACB was one that was a huge call buying last week and you could see this the drop in this name right this is a huge sell off in this name because it had a massive amount of calls that expired on Friday. So dealers unwind and then here we go and I haven't checked ACB volume but I'd be willing to bet that you know call buyers are now stepping in and kind of buying the step that puts the floor in the stock and adds sort of pressure as the stock shifts higher. And so you can look at you know these different positions so if you were to look at this is our equity hub tool if you go to spot game you could check this out. This is what Tesla looks like right this is the options complex and so what you're seeing here is this blue line is a representation of call buying this is accurate as a Friday's close. The orange line is how much puts are in the market in terms of put game and so when you get a big divergence like this. This is telling you that people are flooding into calls as obvious and Tesla right but some of the other stocks may not be as obvious. And so what we're talking about the key gamma level being 600. You'll note that the top call interest is 700. So what happens is as call buyer step in now where all the major gamma is right where the dealers want to hedge will shift from 600 to 700. And as that shift happens that's where you get sort of this difference here in the way that the stock moves. And you can see this against all sorts of different stocks and you know you want to look at stocks where obviously open interest is the biggest. But this phenomenon is something that works the same in Tesla as it has in SPX with our call walls you know we're at 360 a couple weeks ago that that level shifted to 370 or 3700. Now we hit 3700 and the call wall is now threatening in S&P to move to 3750. It's the same phenomenon and everything right. And really just this idea that call additions you know force the market kind of higher. And that's a mechanism that seems to repeat until we get expirations and things sort of shift or adjust. So hopefully that hopefully that makes sense. So I don't have any any questions on that. Let's see here. No I don't think so no nothing yet. This is just fascinating stuff though Brent I mean it just seems like just this kind of knowledge as well as just just jump in and let it ride. Yeah it's I think it's a very hard thing to do and you can and you can you know obviously if news in the S&P or so really what boils down to is volume right and when you have a lot of options that means there's a lot more underlying volume tied to those options. And so you know obviously if it comes out this afternoon that you know Tesla has been cooking their books or whatever I mean Tesla is different the stock will probably still go up but. You know catastrophic news is not going to the options market can't account for that kind of major news or major volume right just like an S&P we forecast a very tight trading market a small range today because there's so much options. But obviously if you get very bad news you know it's going to overwhelm you know the amount of options hedging so you kind of have to weigh some of that particular names where there's a not a huge options complex but just decent size. And some of those names can be you know the moves will be a little bit more shorter short term. So, but you know on net you can go in and you can look at the size of the options complex so if you come into like this this tour if you look at what the top trading names are on Twitter a lot of you know different. People will tweet out the big options trading names you know like I was looking at Pfizer is obviously popular one today there's a lot of options you know that trade here this is pretty big complex you get 363,000 options trade a day, but if you switch to a name you know like young or something like that you know 30,000 open interest you know it's just nothing trades in this name right so options aren't going to have any impact here and what's going on. You know but but Tesla and Apple and all these other names have just massive amounts of, you know, volume and I think this is where the options complex really, you know, in a way dictates what's going on in the, in the underlying stocks. We're going to look at a few of them I loaded a few up and I haven't looked at any stocks it today so I just like to see what's going on put myself on the spot a little bit so you know Pfizer, which is obviously big vaccines news has a ton of open interest at 40. So again we measured gamma and delta. And what gamma is telling you get this question a lot. Gamma is telling you where the options are most concentrated, which is obviously the 4040 strike and what's interesting about delta is delta is telling you where the most in the money options are and that matters into expiration because if you think about where there's a lot of in the money options expiring those require the biggest hedges. So if those in the money options expire then you could get you know bigger delta, the big delta meaning big big hedge unwind in these names so you know 40 is the big strike in in Pfizer, the big. There's calls up at 45 so this stock has good support at 40. You know, should get a pretty good boost up to 45 and I have no idea what Pfizer's doing but we'll see what happens. So it looks like it's kind of holding 40 here. And there's a pretty decent amount of liquidity, you know it's posted up, you know rate above that level so you know my eyes and my view, you know the fact that this is bouncing like that is indicative of the fact that there's so much, you know options going on, or options holding that that 40 strike level. You know, you can look at probably bunch of these other names and it'll be a very, you know, similar phenomenon. Kodak got a bunch of news today I mean this is just an amazing move isn't it $14 until 11 and one day. So, you know, hopefully, I was able to kind of convey the idea in the sentiment here what's what's happening in this name looks like 10 is kind of the key level we see in Kodak and it hasn't quite made there so see how that kind of unfolds but is there any anyone have questions there on on the single stock side or just any more of these options expiration and flows that I can, I can answer. No, no questions at the moment. Looks like you have some some people that are taking you up and on your trial. Great. Yeah. Great. I'll take that. Well if there's no questions it must have been because it was an amazingly succinct presentation. Yeah, so, so I'll talk for one more minute about just sort of what our forecast is for the for the market here. What we view this call wall as a as our major resistance point so our view is that unless this call wall shifts higher the market is is is capped here. We do get a move above we would expect mean reversion back below this level and the market will sort of hold this as a significant area up until this call wall level rolls higher if it doesn't roll higher and we don't think the market is really going to move up or shift up. And so, that's kind of our view for right now. 3750 is a strike that depending on how today's flows are in options that maybe this call wall does shift up to 3750 in the next day or two but for the moment you know we think that this caps the market. And to the downside because there is so much positive gamma. What that infers is that we shouldn't have a whole lot of movement in the market. So when you have a total notional S&P of 2 billion positive gamma what that's telling you is there's a lot of dealer buying as the market goes down. And a lot of dealers selling as the market goes up and that has an effect of constricting or capping volatility right. So that really the last three or four days we've had a pretty tight trading range and because there's so much positive gamma that should hold and because there is so much options tied to the 1218 expiration. And we may kind of just have a rather dull market in the S&P up until you know next week when the VIX expires and that that shakes things up a little bit. And that's the other interesting thing to note is that you know the VIX is trading at haven't seen it since we started the presentation blows up around 21 or 22 and if you do the dirty math on that that that's something like a one that forecast is over a 1% move in the S&P. Which is obviously not really what we've been getting recently so it's interesting that the VIX remains so high. And I think a lot of that is related to this 1216 VIX expiration when there's a lot of 20 strike puts that are set to expire and so that could be kind of an unpinning of the volatility complex. And who knows how that manifests that could just mean that you know suddenly that VIX floor 20 strike floor is broken. You know we'll see but I pretty sure things will be shaken up so to speak into that into the expiration. Yeah I mean and it just sounds like there's even potential for like I mean just massive volatility at that time as well. Yeah I mean your end is always obviously you know a pretty it tends to be very bullish and and you know who's to say that's not the case again this time. Clearly sentiment is heavily tilted towards puts, excuse me towards calls that the the composite put call ratio made a 2020 low last week. So you know there's no one wants to own downside protection if you look at short interest is the same thing you know short interest is anemic at best. And so it's a very kind of one sided you know trade and boat. Obviously the S&P inclusion of Tesla is is on net a delta neutral trade meaning that you know they need to sell indexers need to sell a certain amount of stock in order to buy Tesla right so on net that's a delta neutral trade because they're selling other stocks in the equivalent note. amount to what they need to buy in Tesla. You know but that, so that shouldn't technically have an impact on where the S&P is trading. But these big events, you know, tend to sort of be a catalyst or an online, for instance, will people still want to buy calls after Tesla's been added, you know, will you still want to buy Tesla call after it's been added to the S&P. Sort of what's your new thesis there wanted to get along that stock, and that stock drives a ton of call open interest and call volume I mean it's, you know it's pretty amazing. So it's going to be a it's going to be a lot of dynamics into the year end. Yeah, I mean, is this going to be kind of I mean I haven't looked at it. So, you know, I'm just asking, if when Tesla is added to the S&P 500. Are we looking at this being like kind of like the IBM of the Dow, like it's the majority, like the market cap of the Dow index or I just can't imagine we have 500 stocks in there. I mean, it grew, you know, every day, you know, I mean, I don't know, I don't know what the market cap change in Tesla is for today alone but you know it stocks up 5% right now. And so, you know, it's, it's a massive amount of stock that all these indexers are going to buy and, and what's so interesting about it is that the stock is undoubtedly being inflated by call volumes. You know, it's it's it's completely artificial and so you know it's kind of what's strange about that is I think that call buying is going to go away on 1218 right and then you have the biggest component of the S&P suddenly just lost all of its, you know, sort of momentum, I would say, right all those call like call volumes have to after that ad. I guess they don't have to but you know I would bet that they would and so you're kind of getting this big pump right you're pumping the bubble up and then you're passing the bubble off to the S&P indexers which are the pension funds and for on case and you know people buying spiders and then that biggest component just going to deflate and that's just I think it's going to be a drag on the S&P, at least in the short term but you know, it's just a guess. Yeah, yeah. Let's see. David again is complimenting you here on there on your pre market notes is being excellent for him setting up his trading plan for the day. Thanks David appreciate that very much. Okay, so yeah no no other questions here at the moment. Cool. All right. Well, you know I think if anyone does have questions you can you can reach out to me on email sg at spot gamma calm. All of our different plans come with a free five day trial. So you have five days to you get full access for five days. And if you want to have the book map links which are the cloud notes links here you need to subscribe for either the our advanced plan or our full plan either one of those get your access to these cloud notes links. These are updated automatically each day so you don't need to type our individual levels in every day you just turn on your book map system and we're we're pushing the feed out to you automatically so it's a it's a really nice feature and you know I think it's pretty fascinating to watch how the liquidity lines up at these at these different levels. It's been a fascinating exercise to watch in Bruce I know you have a new absorption metric which which looks like it's showing some interesting synchronicities here between the big options levels I know the iceberg tracker shows some really interesting synchronicities between when there's big iceberg or big stop orders and these in these levels as well so I'm very interested to check that out. Yeah, yeah, I'll be happy to spend some time with you and go through some of that. Yeah, it has been rather rather fascinating to see these levels all kind of coinciding together, especially at some of these, you know, higher time frame options areas as well. So, yeah, some some some interesting stuff to take a look at for sure. Let's see. Yeah, I put a Brent's spot gamma information here into the chat a few times for you guys so look into the chat there and actually let me grab the presentation here, and I can show you. And yeah so if you're interested in reaching out to Brent and, you know, his websites in there is his email his Twitter, and then also that 50% code discount that I was talking about. I also put in there. So, you guys have access to that. Okay. So, here we go. Here's Brent's information here. And let me put that code back in just a moment here sorry. Okay, so just a little bit of insight on this. So, next week we will, and I'm letting you guys know now we will have a special on book map it's only for first time users for the first month only this 50% off. So if you're interested in trying book map out. The reason that I'm giving you the discount code now and I'm kind of pre emptying that sale is, maybe you're going over something interesting in these webinars. And you want to try book map right now. You've got it. You've got the code you can get the discount now. Okay, so that's why we're kind of doing that, so that you guys can get access immediately and and get a discount as well. Yeah, I think that that's it if there's anything else that you want to go over Brent then I mean just, I mean utterly fascinating stuff I every time that you present I mean it's just it's amazing like these all the different things that revolve around these options and and you know the insights that you gather here and putting putting this and plugging this into what's happening in the price action. Yeah, thank you and thank you and and you know we're trying to cobble the system together to be able to offer the trading levels on book map to for individual stocks. Obviously there's 3500 different stocks so it's a pretty heavy lift. You know to do but you know it's something we definitely are trying to get to. You can also see like, you know, I mean what Brent is looking at there in book map is he's looking at the liquidity levels and the order flow around his options levels. That's what he's interested in. So, right, and I think kind of the key takeaway to is, is if you can figure out, you know how people are positioned, then that is what the advantages right. If you know like in Tesla you know most people are buying calls so that that's giving you directional edge I believe. You know that that's really what the takeaway I think as a trader is if you know people are buying puts if you know people are buying calls, you can, you can, you know wait your trades accordingly in those instances. Or if you believe that you know 37 hours and be a pin you know you can trade differently around where those options are positioned based on how you think people are positioned. Yeah, yeah, exactly I mean so there is your strategy right there. Yeah, and I think you over you can overlay it on really any strategy you know if you're a swing trader or scalper or whatever it is that you might be, you know kind of knowing that and forecasting how a deal or how the market may react based on those options flows, you know I think you can really add an edge or a component to really any strategy so. Yeah, yeah, let's see here one more question it looks like. You said to believe that 99% of options traders are wrong. But I think what Kendall's getting at is that 99% or it's a massive number of options expire worthless. And so, whether or not people are right or wrong isn't necessarily of what's important to us as much as sort of how dealers are going to react to flows right. Because if I right now by a 700 strike call in Tesla I'm forcing a dealer to hedge that call. The stock may never go to 700, but I made that dealer by his hedge today regardless right now, how the stock moves is going to dictate, you know the way that the dealer changes this hedge or just his hedge that's his gamma, you know going to go higher, but as of this moment, the stock is going to go higher, you know should go higher because I bought 700 strike calls and so did everybody else and and read it or on Twitter or whatever, you know we're all doing it at the same time we're forcing the stock higher, at least immediately based on our action and I think that's kind of what the difference is Kendall you're it's a great, it's a great point. You know, it's kind of there's a dynamic to this but really we don't necessarily care where the options are trading initially it's sort of what the hedging impact is and, you know, how those flows are going to impact the underlying stock that that we're kind of paying attention to. Hopefully that helps answer that question. Okay, yeah, excellent. And this is recorded everyone so it look for it later today this afternoon it's going to take a little while, but it will be up on our YouTube channel later this afternoon under the pro trader webinar series you'll see it there. Okay. Brent, thank you very much. Great. Appreciate opportunity Brent Bruce and be talking to you soon. Okay, sounds good. Bye bye.