 Hello everyone, welcome to Options with Doug. Streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern Time. Before I get started, I need to go through the Disclosures. General Disclosure, all Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk Disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. Here's my contact information. The best way to get in touch with me is through Discord. My name on Discord is Doug P. Also in Bookmap Discord, there's an options-doug chat channel that's a great place to post questions, comments, and content about the topics of the channel and my presentation. And then finally, I'm on X, formerly known as Twitter. My name there is at Doug Plus. And for those of you watching on YouTube, if you do have questions after the webinar, the best place to post those questions is this options-doug chat channel in Discord. The focus of my presentation today and the focus of the options-doug chat channel 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. I look at how traders and market makers are positioned to the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day, as well as a directional bias. And the second step in my process is execution. And I look at real-time order flow and book map and real-time market maker hedging flow and spot gamma hero to confirm my thesis and for setups for entries and exits. And when I talk about setups today, I will be talking about setups in an underlying asset, and those setups can be taken with futures, shares of stock, or options. For example, if you're trading the S&B 500, the setups that I'm talking about can be taken with ES futures, spy shares, spy options, or SPX options. Questions and comments are welcome, and I will be watching both the options-doug chat channel and Discord, as well as the chat and YouTube for your questions and comments. So please feel free to post, and I'll do my best to answer your questions. All right, my agenda for today, what I want to cover is news items, economic data, events, and earnings. Then I'll go through my positional analysis. Then I'll review setups from this morning, and then I'll talk about the live market. And when I get to the live market, if anyone has any questions or stocks they want me to take a look at, please let me know, and I'll be glad to do that. All right, news items. Of course, the big news item was the event yesterday, the FOMC announcement and meeting, and, of course, the fireworks began just after my webinar yesterday ended. So the ABC pattern down, up, and then down, the C was the move of the day. Let's take a look at that. So here's yesterday. My webinar ended at 2.30, and it looked like the SMB500 was moving back up and then found resistance in this cluster of levels here. This is from yesterday between the 4450 SBX, 4450 Volatility Trigger, and the 4451 Zero Gamma level just above that, and then the ES4500 level acted as resistance, and traders continued to buy SBX by puts, and the SMB500 made it all the way down to the SBX, 4400 Putwall, and the, I believe the SBX closed the day yesterday right around 4402, so essentially at the Putwall, and we'll take a look at the charts in just a minute and see that the SBX created well down below that level today. All right, so that is the, I don't think there is any high impact news coming out for the rest of the week. So the, of course, again, the FOMC meeting, that was the event of the week, and that triggered a large move down. All right, let's take a look at the, let's start with the positional analysis now. So this is the SB500, big move down today, and most of that occurred before the RTH opened. So here's the 4400 level, and price has moved down pretty steadily from that level, all the way down to the 4350 level. So before I go into this chart further, let's take a look at a larger time frame. I'm going to start with an SPX 30-day one-hour chart. This is the August expiration, Friday of the August expiration, that was a slightly put dominated, but very negative gamma expiration, and as those puts expired, market makers could buy back short futures that led to a rally where gamma, market makers gamma position shifted from negative to positive, then a consolidation, then here's the expiration in September, the September 15th large quarterly expiration, and that was more of a positive gamma call dominated expiration, and those calls, loss value, market makers could sell their hedges, sell their ES futures hedges. All right, so let's take a look at some levels now. First of all, the lower and upper weekly expected move shown with the dash purple lines, SPX trading well below the lower weekly expected move, that's from an options chain available in any trading platform that has options, it should be, and then here's the lower and upper daily expected move that's shown with the dash blue lines, SPX trading below the lower daily expected move as well. All right, let's take a look at the spot gamma levels shown by the dark red lines, and I'm going to point out the key daily levels, these are proprietary spot gamma levels available to spot gamma subscribers. First of all, here's the put wall, that's at 4400, that's the strike with the largest net negative gamma that should and is expected to act as support, SPX trading below that level, and in spot gamma's view, if SPX, if an index is trading below the put wall, spot gamma views that is oversold, unless the levels shift, continue to shift lower. So yesterday, the put wall was at 4400, it did not shift lower. So it's been at 4400 since the 18th. All right, so that 4400 level has held SPX trading below that level in spot gamma's opinion, SPX is oversold, all right, the 4400 level is also the absolute gamma strike, that's a strike with the largest absolute negative and positive gamma. So that's the level with the highest concentration of gamma. Then the next level up is the 4460 volatility trigger that is spot gamma's proprietary gamma flip level. Below that level, market makers position on the gamma curve is negative. In a negative gamma environment, market makers have to trade with price to hedge their delta exposure. And that tends to enhance or increase volatility. And SPX is trading well below its volatility trigger again at 4460. That level did move up slightly from 4450 yesterday. And then finally, the call wall is at 4600. That's the strike with the largest net positive gamma that can be expected to act as resistance. And that level did move up yesterday from 4500 to 4600. So it's well out of play and not really a consideration for today, considering SPX is trading below its put wall. All right, so those are the key daily levels, the put wall, volatility trigger, absolute gamma strike, and the call wall. All right, let's take a look at book map, go back to book map now. So this is the ES futures and book map. We saw that the big part of the move lower occurred yesterday, starting around just after 230 continued overnight. And we'll talk about setups in a few minutes. So now here is the mostly the RTH session. So this level, the 4376, this is SPX 4376, somewhat acted as resistance. And just to point out, I have cloud notes here. These are my own cloud notes. I'm showing SPX levels. Also spy levels, there's the spy 435 put wall. That strike did move lower yesterday from 440 to 435 today. So I'm showing SPX levels, spy levels. There's the ES lower daily expected move that did act as resistance. And then around the SPX 4350 level acted as support. Let's just take a look at the SPX levels they're in play for today. So here's SPX in a one day one minute chart showing the lower daily expected move acting as resistance. And there's right at the open that 4376 level acting as resistance. And then 4350 around that level acting as support. So pretty narrow range during the cash session today for SPX. Those are the levels on play again spy SPX levels. Note there's quite a difference in price between ES and SPX. And today I calculated that as 42.5, somewhere between 42 and 43. So I'm using 42.5. All right, we'll take a look at setups in a few minutes. So those are levels of play for today. SPX spy. Also the lower daily expected move for ES and SPX. Let's take a look at NASDAQ. All right, NASDAQ. Before I take a closer look at this chart, I want to take a look first of all at QQQ. Take a look at the levels and play for today. Also a pretty narrow range for QQQ today after the large move that began yesterday. Here's the put wall at 360. Right now QQQ trading above that level. That level did move up from yesterday. So unlike spy the put with the spy the put wall move lower with QQQ the put wall moved higher up to 360 from 350 yesterday. Also for QQQ the three the volatility trigger moved higher QQ at 374. So QQQ is trading well below the volatility trigger and then also strangely the call wall moved up to 400. So well out of play for the QQQ call wall. And let's take a look at NDX. Again a one-day one-minute chart just to isolate the NDX levels and play for today. So it looks like this combo L2 level at $14,790 price has been oscillating up and down around that level. All right let's go back to book map now. So again a sharp move lower began 230 yesterday and now consolidation for the NASDAQ as well as the S&P 500 today during the regular trading hours regular trading session. All right so again I've got my cloud notes here showing QQQ levels. There's the 360 put wall and then there's the NDX 790 level the combo 2 level. All right let's take a look now at gamma notional. This is market makers position on the gamma curve at the beginning of the day. Quite negative this is for SPX by NDX and QQQ. All these numbers for SPX by QQQ quite negative that's just over negative one billion for SPX 2.347 billion for SPI very negative and also 773 negative for QQQ. Those numbers as you would imagine all shifted lower from yesterday again very negative and again this is also at the beginning of the day. So let's take a look at the VANA model now and this will be a visual representation of what that means and the the consequence of a negative gamma environment. So what this chart is showing is market makers delta notional or delta exposure and how that changes with price delta notional shown on the vertical axis price shown on the horizontal axis. There are two curves on this chart the light gray curve shows how market makers delta notional changes with changes in price only and then the purple curve adds implied volatility to the equation that's showing how market makers delta notional changes with changes in price and implied volatility. All right so what this chart is showing again is just how market makers delta notional changes with changes in price and applied volatility. So we want to look at the purple curve and this gives a sense of how market makers may react to changes in price and applied volatility and this curve is pretty typical of a negative gamma environment. So let's just check on price. So first of all SPX right now is trading around 43.61 the low of the day was around 43.50 so that's on this portion of the of the gamma curve here. So remember market makers would have remained delta neutral so if price decreases their delta notional is increasing and they have to sell futures to hedge their delta exposure they will always want to remain delta neutral. Then on the other hand this works both ways so if price increases and implied volatility drops market makers can buy back their short future hedges and that's a put vana rally. So vana is the change in delta with the change in implied volatility so as implied volatility drops price increases market makers can buy back their short futures and that and vana is the change in delta again change in delta with the change in implied volatility that's a second order of greek. So if implied volatility really starts to drop and price increases then market makers can buy back their short futures and that can fuel a rally higher that's a again a put vana rally. All right let's take a look at SPI and SPX SPI and QQQ so we'll start with SPI so for today SPI the low of the day was right around 40 433 right around there SPI is currently trading just above that in very narrow range somewhere between 434 and 435 so again if price really gets going higher implied volatility drops market makers can buy back their short futures hedges so they're trading market makers are hedging so when traders buy and sell puts and calls and SPX and SPI market makers hedge those positions with ES futures and then finally QQQ low of the day around 359 right here QQQ currently trading trading just above that at 360 so again if price gets going higher market makers delta notional will start to decrease and they can sell they can buy back their short future hedges so for QQQ they're had it hedging those options positions with NQ futures all right so again that just gives us a sense of how market makers may hedge with changes in price and applied volatility all right let's take a look at some setups now I'm going to start with the SB 500 this is the hero signal hedging impact real-time options this is from spot gamma available to spot gamma subscribers what this chart is showing is price for SPX and the hero signal showing options trades and market maker hedging activity for a combined signal for SPX SPI XSP and ES futures so if you trade any form of the SB 500 this is the signal that you want to take a look at all right let's zoom in on this chart we'll take a look at a couple setups from this morning and I'm going to zoom in again just for setup review so what I'm again I'm showing the first first hour of trade after the cash open what this chart is showing is that traders were taking negative delta positions that shown by the falling purple line up until about 10 o'clock they started taking positive delta positions and let's just take a closer look and see what they were doing so first of all I'm going to zoom in on the initial move lower so up until about 10 o'clock traders were buying puts and slightly buying calls but the put buyers were more aggressive and price was responding to the to the put buyers as well as let's go take a look at a book map we'll zoom in here on the the first hour we'll take the hour and a half so initially right at the cash open we know that traders were buying puts when traders buy puts market makers sell the puts and they have to sell futures to hedge their delta exposure we can also see aggressive sellers coming in shown by the magenta volume dots those volume dots are shown by minus sell market orders magenta dot indicates they're more sellers than buyers and aggressive sellers were moving price down as well as traders buying puts that shown by the falling cumulative volume delta line and also the move down was fueled by sell stop orders shown by the falling yellow line so put buyers aggressive sellers and also somewhat the sell stop order supported the move down from around that 436 level 43 76 level down to spy 434 right here all right let's take a look at go back to hero now so we're going to take a look and see what happened around 10 o'clock let's go back to a hero I'm going to scroll over to the left here and let's go back all right so here we go all right so we know from the from the open traders were buying puts right around 10 o'clock they took their foot off the gas the put line levels off and they shifted they started buying calls that's shown by the rising orange line the orange line shows call transactions the blue line is showing put transactions and the lines are shown in terms of delta so rising line indicates positive delta falling line indicates negative delta so around 10 o'clock traders put buyers took their foot off the gas they stopped buying puts and they started buying calls and price responded higher all right let's go back to book map so we can see it this time again right around the spies spy 434 level as well as ES 4400 we know that traders stopped buying put started buying calls aggressive buyers started to come in you can see all the green volume dots here indicating more buyers than sellers also shown by the rising cumulative volume delta line also note that large traders were buying weakness that show them with iceberg orders that show them by this rising slightly rising light blue line so CVD rising aggressive buyers large traders buying with iceberg orders they used to hide their size and again traders stopped buying put started buying calls and price moves higher back up to the lower daily expected move and then aggressive sellers started coming out again let's go back to hero all right so pretty pretty easy read here that move higher then after that not so much really we'll just zoom out all the way all right so for today for the entire day traders continue to buy calls they're also buying puts looks like the call buyers are more aggressive but the put buyers are really driving price along with aggressive sellers all right let's take a look at one other one another thing I have in my notes here 10 20 all right so 10 20 we're taking a look at this reversal lower now so we we know helping to drive the move higher actually let me traders start up aggressively buying calls right around 10 o'clock up till 10 20 that activity leveled off and then price reverse lower so they stopped buying calls resume buying puts let's go take a look at book map and then there's the reversal lower that I just talked about so carefully watching hero hedging flow and order flow led to a short and long then a short again all right so those are the setups that I saw this morning in the sb 500 all right let's take a look at nasdaq right nasdaq was not uh as an easy to read as the sb 500 so this is a combined signal for ndx and qqq zoom in so i'm going to focus on this this was really the only clear setup here here right around 10 40 traders started aggressively taking negative delta positions and let's see what they were doing so initially from the open they were buying calls that level that activity leveled off they were selling puts that leveled off they started buying puts again so the call buyers took their foot off the gas and they shifted to put buyers again call buyers took their foot off the gas started buying puts right around 10 40 price reverses lower and that's right around here oops wrong tool so price jumped up above vwap in the lower daily expected move and then move lower is that again traders stop buying calls started buying puts all right let's take a look at some stocks and hello holy trinity glad you're here welcome we'll take a look at the live market in a few minutes and see what's going on i do do want to highlight a few stocks and so sorry i'll take a look at meta also i want to start with microsoft so right around here microsoft made an announcement this morning something about the ai co-pilot being incorporated in windows 11 so ai news drives microsoft higher up to this 325 level which just so happens to be the hedgewall and the key gamma strike so price reverses lower at that level let's see what options traders were doing how they reacted to that let's go to microsoft zoom in on this chart so here's the 325 level key gamma strike hedge wall there's the sharp move sharp move higher after the news i can't seem to get the right tool right here we go sharp move lower higher after the news and then almost immediately options traders start taking negative delta positions they were fading that move higher at the 325 level all right so that's microsoft let's go back to book map and the next so now it looks like microsoft buyers are trying to move price back up to the 325 level today let's take a look at nvidia all right 420 is actually the put wall and that acted as resistance today so let's go see what options traders were doing at the 420 put wall so let's go to nvidia now zoom in on the start so here's the 420 put wall and as price hit that level traders started taking negative delta positions let's see what they were doing they were buying puts so initially traders were selling puts and buying calls call buyers took their foot off the gas then started selling and the put sellers turned into put buyers and price moved lower again blue line showing puts orange line showing calls let's go back to book map we can zoom on this just a little bit all right no kung fu for you says stream not working uh is anybody else having a problem i can i can see the stream is working on youtube i have that on another computer so i can see that it is working also discord uh is indicating to me that my stream is still running is anyone else um having a problem all right uncle says not working on discord has it been um not working on discord the whole time all right so max says stream working here in youtube thanks holy trinity looks good on on his end thank you all right so i i see a uh an image with the uh kind of a uh uh a stamp small image of what's showing on discord it looks okay to me so if you're having a problem on discord uh just go to youtube so sorry about that i i don't know if there's anything that it can do all right so we were looking again at nvidia sorry about that let me get reoriented to nvidia here all right so 420 the put wall acted as resistance let's go back and take a look at hero as call buyers turned into call sellers and put sellers turned into call buyers all right so that's nvidia then last set up i want to take take a look at stock is tesla so tesla there was a divergence long set up right around 955 this is what i'm looking at right here traders started taking positive delta positions price responded higher that's right around the put wall the 255 put wall and in the case of tesla the put wall did its job and acted as support let's take a look at book map so price jumped down or moved down below a little bit below the put wall the 255 put wall but it did act as support and price moved higher as options traders took positive delta positions and note the very bearish water flow here all the magenta volume dots we can also take a look at cumulative volume delta should be sloping straight down to me this indicates that options traders are really driving price today back and take a look at hero all right so net for the day so far actually that's actually now the call buyers have shifted to call sellers right so both numbers are negative so traders buying puts and selling calls all right let me check for questions uh hl aquarius asks book map on thinkorswim is same quality i i assume you mean versus the standalone book map version of book map that i'm looking at and if so if that's your question the answer is no so the thinkorswim version of book map is an older an older version that has limited features i think it's an older version of book map global so you can't have any add-ons in um in the thinkorswim version of book map like this mbo bundle which is showing stops and icebergs that's not available in the thinkorswim version of book map also you can't trade from the chart all right uh the advantage is it's inexpensive a good way to get an introduction to um to book map the i i think it's about forty dollars a month that includes data so that includes data from dx feed which is a very good high quality data package uh full depth of market all right two men asked what would news source do i use um i guess regarding microsoft so here's what i i did i saw that first of all i saw the news the move on microsoft uh before the news i wasn't specifically watching for this then i went to my watch list and in thinkorswim and just clicked it clicked click that right there all right there it is all right so this you know again i saw the move well well before the news came out so this is showing at 1038 right true man i hope that's that helps i did not see the the news before then all right let's take a look at the live market now well i i think uh you know that there are plenty of news feeds that you could true man there are plenty of news feeds that you can buy you know if you trade the news or you know uh large traders have algorithms that will read the news and and trade based on you know before any any human can can make the trade all right so let's take a look at the live market now oh slow sorry i wanted to take a look at meta let's take a look at that all right so nice rally and meta today let's see what options traders are doing so let's go to hero for meta all right meta looks like it made a double bottom here as traders started taking positive delta positions price moved higher to the 300 level which is the hedge wall and key gamma strike so it looks like at that 300 level options traders have taken their foot off the gas the hero line levels off as well as price let's go to book map meta so here's the double bottom as traders were taking positive delta positions price reaches that 300 level and and as options traders have taken the foot off the gas looks like price is moving a little bit lower and let's just zoom in on this for what i'm looking at is the liquidity in the order book this is pretty typical of stocks that traders will come in at the cash open put their limit orders in this case this is a history of limit sell orders for meta and they place them typically on the round number lines and the interesting thing here is they pulled those orders right here right before price reached up to the 300 level looks like they came back in let's go back and see what options traders are doing all right so today they are net buying calls also selling puts call buyers more aggressive so what this is really indicating is that call buyers have taken their foot off the gas they are selling puts they've stopped buying calls and slow to sorry asked when you trade the news is it rule-based mechanical or is it more discretionary approach we're really i don't trade the news i'm just not fast enough i mean you saw that you know i i saw that move of microsoft after it happened and i just did some research after to find out what caused the move so i i did not trade microsoft today but i was pointing that out so truman says he saw the move first got in on it by luck yeah i just i did not see that i typically in this negative gamma environment i'm typically looking for larger moves in the sb 500 and nasdaq and kind of focus my quality my my focus is on the index you know not not always but you know that's my first focus and then the stocks that i normally trade like like in video tesla right so i again slow to sorry i'm just not fast enough to trade the news and i don't have a uh even if i had a very uh expensive news feed i'm still not fast enough to compete with algos so i'm i am uh very quantitative though in my trading i'm i'm looking at the same things i mean you i talk about the same things every day my planning and then what i'm looking at for trading looking at order flow and hedging flow all right let's take a look let's go back to the sb 500 let's zoom in on this so it looks like traders if we look at the overall trend for hero trending up till right around 130 140 then they've started taking negative delta positions again let's just see what they're doing so they have looks like the call buyers have slowed down a little bit and they continue to buy puts now prices moving lower let's take a look at book map to book map all right so sorry says e s about to hit a new low yeah it's back to the 43 50 level that level was noted as support and the spot game am founders note right so it looks like the large traders that have been buying with iceberg orders really shut it down stop buying with iceberg orders large orders here kind of obscured by that red dot which is sell stop orders and then that has leveled off i'm talking about the light blue line and then also cumulative volume delta has shifted back negative all right so back down to the 43 50 level let's take a look at nasdaq all right so nasdaq reverse lower just below the lower daily expected move and the nq 15000 level and the qqq 361 level let's see what options traders doing and while we're here on S&P 500 let's see what the zero dte traders are doing so that's interesting it looks like the zero dte traders shown by the green line here are driving quite a bit of the options flow today almost all of that you see the just strong correlation between the green line which is showing zero dte trades options that expire today versus all expirations shown with a purple line almost a direct correlation indicating that very strong component of the options trades today are options that expire at the end of the day all right let's take a look at nasdaq now and since about 1045 this hero signal has been steadily trending down and started to move more sharply lower right around 130 and price responded lower so hero leveled off moved up a little bit and traders started taking negative delta positions again and now price is moving lower let's go take a look at book map again right in the case of nasdaq large traders have been selling all day with iceberg orders shown by the following light blue line also since about just after 11 o'clock sell stop orders helping to fuel the move lower the cumulative volume delta really leveled off and now iceberg orders sell stop orders and options traders all driving nasdaq lower all right my time is up i want to thank everyone for watching thank you very much for your questions and comments and i will see you tomorrow thanks again bye