 And I seem to be having a problem with with YouTube Okay, YouTube is working. Okay. 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 and 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 And it's not suitable for all investors Past performance is not necessarily indicative of future results as a reminder the focus of my presentation and The options with 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 I have a two-step process for trading and the first is planning and I use positional analysis And I look at how traders and market makers are positioned in the options market And how those positions change from day to day to help develop a thesis regarding expected volatility and trading range for the day as well as a directional bias and The second step in my process is real-time order flow I look at real-time order flow execution and I look at real-time order flow and bookmap Real-time market maker hedging flow and spot gamma hero to confirm my thesis and that's very important You can plan all you want, but sometimes it doesn't work out and You know again, I watch book map and hero to confirm my thesis and I think this process two-step process provides a significant edge and trading Other traders use technical analysis and Fundamental analysis, I think this is a new way of looking in the market that again provides significant edge and Questions and comments are welcome And I will be watching discord the discord chat channel for questions and comments as well as the YouTube chat channel and I Posted this earlier in discord YouTube if you guys have any stocks that you want me to take a look at Please post them and I will I've gotten a few in discord and I will I'll try to get to them at the end of the presentation Okay, what I want to talk about today First of all news go over Economic data that came out this morning and upcoming economic data events and earnings Then go through our positional analysis and Then talk about setups today Okay, first news items and there were a couple of A couple of economic events that came out this morning, and I'm not sure the market S&P 500 the market jumped around 830 and I I saw this and the Canadian GDP I don't I don't know what caused the market to jump higher at 830. It could be could be this I Can't imagine it's the Canadian GDP that came in as expected So if this is the US employment cost Came out a little bit lower than expected maybe the market interpreted that as bullish and this was at 10 a.m this consumer confidence Came in a little bit lower than expected and the US one-year can Consumer inflation rate a little better than expected. So that was that's what was out today and then tomorrow kind of starts the The big events So first of all tomorrow morning, there's PMI and then the big event of the week is the FOMC meeting and that Announcement is 2 p.m. And that'll be during my a session and then the Okay, so Paul says was employment wages. Okay. Thank you Paul Alright, so tomorrow FOMC Announcement at 2 p.m. During my session and then the excuse me then the press conference starts at 2 30 p.m. As I'm wrapping up my session and Then on Friday, there's the employment situation report that comes out on the first Friday the month at 830 p 830 a.m Eastern time and Then finally earnings this week So amd reports after the close today and then tomorrow Metta reports after the close and then Thursday's the big day with Apple Amazon and Google All reporting after the close so today this week is a very big week for earnings Okay Now let's take a look at some charts Okay, there's a question in Discord our options traders supporting the market at the moment moment and We'll take a look at a hero in just a minute during this morning. They were not The S&P 500 was rallying as Traders were taking negative Delta positions and that has been going on for most of the day and we'll see if that has changed So let's start with levels And I'm going to take a bigger picture view and this is the SPX this is a one-hour chart and this shows the spot gamma levels and the put wall at 3,800 down way below down here and the call wall at 4,800 and Then 4,000 is the absolute gamma strike and then this is showing the other levels in between So the volatility trigger has been in play this morning and the volatility trigger is spot gammas proprietary gamma flip level where gamma flips from Negative below to positive above That's the market makers gamma notional position and the zero gamma and now this combo l4 level so that is the That is the bigger picture view at one hour chart and now let's take a look at a And SPX chart and that's think or swim and this is a One-minute chart for SPX for today showing the volatility trigger Showing the levels that are in play today volatility trigger acting as support a pause and retest of the zero gamma level and Then prices moved up and found resistance at this Level and this was noted as resistance in the spot gamma am founders know this 4050 level This combo l1 or combo l4 and an l1 level So that was the big picture and then the levels that are in play for today All right, let's take a look at book map now, and this is the S&P 500 chart and This is showing So first of all what I'm showing the in these columns. This is the spot gamma cloud nodes. These are notes that are Provided to spot gamma subscribers That are updated automatically and displayed in this cloud these cloud notes, and they're showing Primarily here showing SPX levels. So that's that l1 level that is currently acting as resistance And that's SPX 4050 adjusted to an equivalent ES price and right now spot gamma is using a 15-point difference, which is pretty close This is that zero gamma level And then there's the volatility trigger level that again the volatility of the Gamma flip level So those are the spot gamma cloud notes all those levels are in play and also I have a column of notes This cloud levels. These are my cloud notes and what I'm showing are key spy levels so there it is the spy key gamma strike at 400 and I'm also showing the support and resistance levels that were noted in the AM founders note So there's the support level that was in play today and then now the resistance level is in play at SPX 4050 and Also, I'm showing big ground numbers in ES so today this support level at 4020 and That's converted up to 4035 in ES so SPX 4020 acted as support and Price has rallied chopped around Yes, lunchtime chop around the The zero gamma level and is now testing the 4050 resistance level so this to me this was not quite as clear as yesterday But and not supported by option straights at least in the morning so there's the S&P 500 and One thing to note here what I'm showing in the sub chart. I have three different lines and This yellow line is showing stop orders so these are by stops and This is showing the this is in some mode or cumulative mode Showing the total number of by-stop orders at almost 8,000 during the session that I have Have had this open So typically this is a a Very good indication of a price direction and as long as this yellow line is rising it's typically very difficult for The ES to drop and the other lines are The light blue line these are iceberg orders and these are what large traders used to hide their Hide their size and this is pretty typical to their Trading their selling strength and by weakness and Then finally the dark blue line is cumulative volume Delta and that's showing aggressive By orders and sell orders market buy orders market sell orders. So that's that's kind of up and down So it looks like this Rally is in large part driven by stop orders At least that's what book won't book map is showing to me Okay shifts and levels very minimal today and There were shite slight shifts in the volatility trigger SPX up five points and spy down one point And no big deal So very again very minimal shifts and levels in the S&P 500 and For the QQQ the volatility trigger Dropped three points and the key gamma strike did drop down from 300 to 290 All right, let's take a look at the gamma levels first for the S&P 500 and here at There's the put wall down at 3,800. That's a strike with the largest net negative gamma and Can typically be expected to act as support and Then there's the 4,000 level that is the absolute gamma strike or the key gamma strike And that's a strike with the largest absolute gamma and then for 4100 remains the call wall and that's a strike with the largest Positive net positive gamma and can be expected to act as resistance So that's SPX spy and for spy there's the 390 put wall the largest net negative gamma and Now the key gamma strike is at 400 the strike with the largest absolute gamma and There's the 400 call wall Strike with the largest net positive gamma and one thing to notice here is the The build-in put positions here from 390 to 400 and I guess traders are positioning themselves ahead of the FOMC tomorrow and the employment report on Friday and We'll see that when we look at the numbers. There was a shift Pretty significant lower and market maker gamma notional. All right, let's take a look at the Nasdaq now We'll take a look at QQQ So these are the absolute gamma levels for QQQ And I think I forgot to mention that what we're looking at here This is the zero line and above the line the black lines are called gamma or positive gamma and Below the line the teal lines are negative gamma or put gamma so for QQQ Here's the put wall at 280 And there's the absolute gamma strike or key gamma strike at 290 and Then 300 is a call wall and it looks like there has been built a build of put positions as well Okay, let's take a look at the data now We'll take a look gamma notional and this is showing gamma notional. This is market makers position on the gamma curve And it is shifted to negative for SPX slightly negative Yesterday as Gamma notional for SPX was positive 384. So now I had a shifted to minus 101 and for spy yesterday Market maker gamma notional was minus 250 and today it's minus 1137 so pretty significant shift to more negative for spy and Then yesterday gamma notional for QQQ was totally neutral at zero and now to shift it to minus 275 and that is indicative of Traders building put positions as we saw in the absolute gamma charts All right, let's take a look at the Vanna models now. This will This is a visual Illustration of what I was just talking about so this is SPX and this is showing how market makers delta exposure changes with changes in price and Delta notional is on the vertical axis and price change strike is shown on the horizontal axis and then the Green line is showing how This is for the current expiration Showing how market makers Delta exposure delta notional changes within changes in price and implied volatility And that's the Vanna effect the change of Delta with a change in implied volatility and the black line is showing Delta notional at the next expiration. So that's showing Their delta notional as time passes and that's the charm effect the change in Delta as time passes and Let's take a look and see how that has changed Over the last couple days So there's the positive Gamma notional yesterday for SPX And now we can see the gradual shift To negative that's for SPX. Let's take a look at spy So the same thing, you know gradual shift to more negative and Then finally for QQQ Again as traders appear to be positioning themselves with puts before the Events and economic data for the rest of the week and then finally and again I'm still going through my planning process here and the last thing that I want to take a look at is my Key gamma strike list. These are all the stocks of my watch list and I track the key gamma strike every day and at Also the preview compare that with the previous gamma strike the key gamma strike from the previous day and I color code The current day based on whether that key gamma strike increased that would be green or red Indicating that it decreased. So here You know, this is showing quite a few drops and key gamma strikes and And I interpret that as bullish bearish. I'm sorry traders are Anticipating and accepting lower prices and positioning themselves in the options market Okay, so based on this for the S&P 500 Again gamma notional became more negative that is indicating that Traders are adding puts market makers are selling puts and as price decreases as we as we saw in the Vana model that Traders will Market makers will have to sell futures to hedge their delta exposure as price drops And they will they can buy back those futures as price increases and their delta exposure drops So that is that's indicative of a higher volatility Environment as their market as market maker gamma notional becomes more negative You can expect a wider training range and and higher volatility. So that was my expectation for today and For the S&P 500 itself There was not that really with those no shifts no significant shifts in levels my Directional bias was was neutral. I had no no directional bias for the S&P 500 and for these stocks Yes But again, I always confirm my thesis as I said in the in the introduction with Real-time water flow and book map and real-time market maker hedging flow and hero So with that let's get started and There's a question RT RT Ask and I think I made a mistake there. So let's let's just confirm that let's go to equity hub and It's 350. So I did make a mistake there So Thanks, good catch. Yes key gamma strike for Netflix is 350 not 250 So typo on my part there All right. So before I get started with setups, there were some questions and discord that I want to address and first of all There's a question about How do I? Get the equivalent levels between spx Spy and ES and there are a couple of ways of doing that and first of all There's a quick and dirty way of doing that and this is just a watch list and think or swim and Let's say I want to get the equivalent level and spy and ES so I can just watch this and This is again the quick and dirty way and when I see ES Get to a round number Something that's easy to punch into my calculator I'll quickly glance down at spy and I'll do that three or four times come up with an average and the same for spx and spy So there was 40 69 then I'll quickly jump down and look at look at spy. So that's the quick and dirty way and Then I I think probably a more exact way is To compare two charts and I I'm only showing one screen here. So I can only show Show one screen at a time So let's say I have spy on one one screen and ES on another screen And what I will do is compare I'll take a couple of High and low maybe three or four high and low points At various times during the day. So I'll look at that Let's say look at look at that and then I'm looking at this exact. This is a one-minute chart One-minute chart and I'm looking at the exact same chart for ES on another screen and Comparing the highs and lows at exactly the same minute in time and I'll do that three or four times come up with an average and There's my ratio between spy and ES or spy and SPX or whatever I want to compare and One thing to note is that? difference Tends to slowly decrease so it will increase with every rollover every monthly rollover It will increase and then slowly Decreases down towards 10.0 as time goes on I Don't know why that happens, but That's the way it works. So Carmo trades, I hope that answered your question. So two ways of doing that, you know, it's not not perfect It changes a little bit every day But that's how I do it And it doesn't have to be perfect But it's close enough Okay, and then trader He asked can you cover today today? Today if you lost any parts of your process What would be the most valuable insight? So I'm kind of interpreting that as What what's essential what what? Can't I do without so what's essential for me all right and JC is answering the question because the future price at rollover is Very to the present price as present gets close to expiration the variance between spy and spx and ES get gets more narrow so a more exact way is to calculate based on the RTH close and settlement for ES daily and Then it changes a lot it changes a little bit the the next day So I'm looking I want to get a more exact number for what's what what is happening today So that's why I'm looking at the one-minute charts for today and Again, I'm not looking for for an exact number just something That's close enough so I can draw lines on my charts Okay, and thanks. Thanks for that. So again trader HEE asked today if you lost any parts of your process What would be the most valuable insight so I again? I'm assuming you're you're asking What what is essential what I what can I what can I do without and? Okay, so first of all the levels The levels on my chart or essential for the way that I trade and what I look at and Then the second part so really I would say that If that was the only part of the planning process that I had I could not give that up and you know Bruce does his presentation in the morning. He has no levels on his chart and I just can't it looks like You know, maybe it's my engineering background. I don't know but I like to look at some some levels on a chart to give me some frame of reference and You know, I've shown over time that How important the spy and spx level are for ES You know the gamma levels the round number levels So first of all, I could not give it the levels. The second is book map watching order flowing book map and then hero is also An essential part of my process Former engineer. Yeah, I'm a trader now trader and educator now JC was asking Doug isn't engineering. Yes, my My career was an engineering Okay, so hopefully trader he I I hope that answered your question. So what we're looking at now everything on this chart With the addition of of hero is essential to my process Okay, and there's a question and And in YouTube if you could only trade ES or Tesla Which would behave more true to hero for increased odds of success and Seems like ES can do the opposite of hero so many times. So first of all Those are two of my favorite instruments to trade and they do trade differently Hero is definitely different For Tesla and ES and for Tesla. It's often a direct confirmation Heroes a direct confirmation There's an occasional divergence in Tesla and hero, but typically This is showing how options traders are trading market makers in Tesla typically will hedge their delta exposure right away in in Tesla so there's a strong confirmation between price action and Hero in Tesla and then for the S&P 500 spy and ES Divergences often happen and that's one reason that I'd like to to trade ES spy SPX Trade that any number of ways ES spy shares spy options SPX options Because of the divergences give you it gives you time to plan a setup So with the levels on my chart that I have strong confidence that these levels are important and price may react at those levels and when I see Hero diverging from price action then I would look at my bookmap chart for a potential level for a divergence and That's what I was looking for today, and it didn't happen at least in the morning Okay, so with that let's start. Let's take a look at some setups today And I'm going to go take a look at hero now so this is the S&P 500 Futures ES and this is showing a combined signal of SPX and spy So this is combining SPX and spy options trades into one signal that are shown for ES here So let's expand the chart and this is interesting It looks like there's been an update to hero now that this expanded chart is taking Excuse me taking up the whole screen. So this is what I was looking at this morning falling hero and I expected the ES SPX spy to roll over at one of those levels above and that didn't happen this morning and again recall that when we looked at the ES the S&P 500 futures That stop orders were Seemed to be fueling this rally higher that rising yellow line by stop orders so let's take a closer look and see what What traders were doing here we can separate out puts and calls and It looks like traders are buying puts now. I'm looking at the the total Cumulative hero signal for the entire day. That's this one day Rolling window and we'll just We could take a We'll take a quick look at 30 minutes see if that provides any any insight and We can see now that traders are buying calls and selling puts. I'm just going to shift back to the one day So they're buying puts and buying calls But this number and this is in dollar terms For puts 1.8 billion versus 418 billion is a lot stronger for puts so net net for the day The hero signal is negative showing traders are taking negative delta positions again You know they appear to be Positioning themselves for the FOMC. So there's the ES Let's go back and take a look what we'll take a looked spy and then take a look at Same thing for spy and there's the there's the total number, which I think is probably pretty close to the total number for ES Yeah, I Don't know if everybody can see that 1.4 billion Negative Delta for ES 1.5 for spy. All right, so let's go take a look at Let's go take a look at book map again So Yes Continues to rally Take a look at spy So what again what I was expecting was You know with the hero dropping down like that You know certainly this level here the 403 volatility trigger. That's a spy 403 volatility trigger or the ESPX zero gamma level would act as resistance and price would drop but the By start stop orders continue to rise and never confirmed a down move So that's why it's important to watch order flow as well as as hedging flow So let's take a look at spy now, and there's the reversal higher And remember we saw that was at the I believe that was at the 40 40 20 support level close to the Spy 401 and spy continues to move higher So that's the S&P 500 then I had some other setups and the semiconductors were strong today first. There's AMD With the reversal at the 73 hedge wall. Let's take a look at hero full screen and notice the Nice divergence higher So this looks like a kind of a series of large block orders traders buying calls buying a lot of calls there and Price responds higher a few minutes later So that's a divergent setup and again price continues down as traders are buying calls Let's go take a look at book map again Ember versus higher around the 73 hedge wall so trend break a couple of tests of the 73 hedge wall and heading towards the liquidity target at 75 and it looks like absorption and that level and if I think of options traders continue to push it higher They may be able to get to 75 So that's AMD and right Paul says AMD earnings after the market. So traders apparently are positioning themselves bullishly before the With bullish positions before the earnings. All right. The next was Microsoft. Let's go take a look at hero So remember the divergence setup here For AMD So that's one type of setup and then here's another this is confirmation setup Hero continues to rise See what traders are doing as traders buy calls And price continues to rise they're buying calls and selling puts Okay, great Carmo trades a dancer answered my question. Great. You're welcome Okay, so Microsoft, let's go take a look at book map again Nice steady uptrend first price target at the 246 liquidity level actually 245 246 and And 247 Next target above is 248 so again AMD divergence setup and Microsoft confirmation setup hero rising traders of buying Calls selling puts and price continues to rise hitting one liquidity target after another the next was Nvidia This is great setup this morning with the 190 Put ball in play and remember yesterday Nvidia was down as You know look like traders were taking profits and it had been up It was so strong this year. I think I pointed out that Nvidia You know as of yesterday was up Maybe 35% here today. So 35% in January. All right, so let's go take a look at hero now So again, there's the reversal at the 190 put wall There's Nvidia So it looks like calls are primarily driving here. So traders started buying calls as Price reached that 190 put wall and then price reversed higher So more here another confirmation setup and the for me at least the 190 put wall Gives me added confidence that that level should act as support. So there's the reversal I'm going to zoom in on this just a little bit and notice the buy sweep here those small green dots and A lot of larger green dots the market buy orders coming in At the 190 Put wall level As traders started buying calls and selling puts All driving price higher from 190 up to the first liquidity target That 195 So a very nice long setup there and Nvidia All right, let's take a quick look now at QQQ And let's go take a look at hero So in the morning there was a pretty strong confirmation for the up move Here here Now it looks like traders are starting to Take negative delta positions Let's see what they're doing. So in the morning they were Both buying calls and that was pretty steady and they started selling puts and now they're selling calls and buying puts So kind of getting in line with the with what the S&P 500 is doing And once once that happened price stalled Not making a lot of upward progress All right, great. We've got more engineers in here great fantastic. Yeah, this As an engineer this this is what makes sense to me So that's QQQ. Let's go back and take a look at book map and remember the strong strong hero in the morning and then it has leveled off or actually decreased and prices chopping around between the 295 combo 5 level and 293 Let's take a look at Tesla and then there were some Request for additional stocks and we'll take a look at those So Tesla strong rally in the morning. Let's go take a look at a hero and Tesla there was a Really a bit of divergence here Hero dropping and it really didn't start to increase until right at 1030 and price was already rising but continued to rise at that time so Not a strong not a clear signal up until about 1030 and let's just see what traders were doing So this helps a little bit to separate out Calls and puts Showing that trader started buying calls as Price was rising and price continued to rise. Let's go take a look at Book map again. So that's why I have this this 1030 Area I've drawn a rectangle around 1030 showing with my approach That is the that would be the entry point. I always like to see a confirmation. I want to be Trading in the direction of the market makers and have that confirmation So absorption of that liquidity there and price moves up from 169 to 173 and higher okay, and Got a question to YouTube then we'll take a look at a couple of charts that were requested All right, so RT RT says logist logistically to catch these moves You must have multiple hero and book map charts open correct And how many screens and charts do you have open to catch these moves that happen in the first 30 minutes? So what I have I have two computers and my first computer is a PC and I have two charts two screens there and I have book map on one and If I'm trading the S&P 500, which is typically my preference I'll have ES open on one chart and spy open on another So I'm seeing both both levels and then on my other screen on my other computer I'll have hero open. So that's for the S&P 500 and and If I'm just trading Not trading S&P 500 trading another stock then I will I'll just have a hero on PC on my one screen on my PC and book map on the other and maybe an occasional look at Candlestick chart on another computer or on another screen, but the With hero I can quickly scratch scan first of all I can look at the hero signal and I post that typically every day Often are generally ranked by the strongest to the weakest or the weakest of the strongest and Depending on my bias for the day I will either start with the strongest or the weakest so strongest if my bias is bullish and weakest if my bias is bearish and some you know, sometimes I miss the best moves if I'm focused on The S&P 500 today that I might miss the move in Nvidia but what it boils down to the stocks that I trade the most often are The S&P 500 the instruments that I trade the most are the S&P 500 QQQ Nvidia and Tesla Occasionally Microsoft, but it really it's boiling down Although I have ten stocks open here in two futures. I'm generally looking at four instruments So that's that's not hard. Okay, so now there's a There was a request to look at a couple of other stocks so I'm going to Share my screen and those are on my other computer. All right. The first was Roku So here's Roku and book map Nice strong uptrend today. Let's take a look at hero. So I'm going to shift hero from my Watch list to the entire list of stocks So there's a very strong correlation between Options trades market maker hedging activity and price action at Roku Looks like mainly calls driving so traders have been buying calls except for one One block order here Looks like traders were selling calls as price approached the 57 57 50 level and then they resumed buying calls buying calls drives price up and there's the Block order and then they continue to buy calls and price rises and now it looks like it has Price is stalled as traders started selling calls Okay, so karma trades Requested Roku. Hopefully that helped so again very strong confirmation correlation between options trades hedging activity and price action and strong rally in Roku today There was also a request for snowflake. Let me just make sure Yes, okay, so there was a request for snowflake and there's typically a pretty strong correlation between Price action a market maker hedging activity and snowflake Let's go take a look at snowflake. Let's see what traders were doing So they've been selling calls today And they started selling puts as price was rising and it looks like the only Gamma level and play is the 150 key gamma strike This down below So this is not as clear as some of the other charts that we've looked at but a possible entry at You know again, if you're waiting for a hero confirmation Let's say just just before Just before 1050 here this pullback and with the absorption there At the 154 level which also looks like just around the the opening print And you can tell that with it Typically for a lot of stocks the point of control will remain at the opening print the volume is so large until the End of the day and the closing print Okay, let me I'm going to check for any final questions here Bookmap, okay. I think that's all the questions Okay, so JEC ask Spy so it will take a win here in book map will take a look at spy and Then take a look at at hero. Let's go back to spy Go back to my watch list Okay, so here spy and still for the day the cumulative position is still Definitely negative Delta and his price continues to rise Let's just go back to book map and take a quick look their spy again price continues I have that as 403 that should be 405 there Another typo Let's take a look at Yes, that's be 500 futures rising yellow line By stop orders continue and there's a question in discord. What is my thoughts on the spy chart? so options traders I You know with the big big events coming up sometimes This can be spy can be a little bit difficult to interpret so traders appear to be positioning themselves Ahead of the event so again, I was looking for a reversal lower this morning and You know it never never happened so You know that was my that was my thesis and it just never Price action never confirmed a reversal lower at the levels. I was looking so Yeah, right now the S&P 500 continues above or is trading above the resistance level at the SPX 4050 level, so let's take a look at hero again For spy, I don't know what's happened here. I'm having a problem with hero So I don't know what's going on with hero here Try and refresh okay, so anyway, I'm reading through the discussion and discord and The so the assumption is that market makers at the beginning of the day the data most of the data that we have From spot gamma other than hero is at the beginning of the day and the assumption is that market makers are Delta neutral at the beginning of the day and They will You know based on gamma notional as we saw they will have to hedge To you know that again, they will buy and sell futures to hedge their delta exposure and For the S&P 500 there are a lot of drivers of price action You know I showed that buy-stop orders are could seem to be driving price higher and JEC notes a drop in volume. That's to be expected today Given the you know the big event tomorrow Okay, so I'm gonna wrap it up I'm having a problem with hero here. I'm not sure why it's not showing so anyway I want to thank you for your questions and comments And Thanks for watching again. Thanks for your questions comments, and we'll see you tomorrow Thanks again. Bye