 Hello everyone, welcome to Options with Doug. Streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 p.m. Eastern Time. Before I get started I need to go through the disclosures. General disclosure, all bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Pass performance is not necessarily indicative of future results. As a reminder, the focus of my presentation and the focus of 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 volatility and expected trading range 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 in Bookmap and real-time market maker hedging flow and Spot Gamma Hero to confirm my thesis and that's important today and also for increase for setups for entries and exits. Okay, questions and comments are welcome and I will be watching Discord, the Options with Doug chat channel and Discord, as well as chat in YouTube for questions and comments. So JC, thanks, glad the audio is good, always helps to know and Jason, hello, you're welcome, glad you're here. Okay, let's get started and what I want to talk about today, my agenda for the day. First of all, quickly go over some news items, economic data events and earnings and then we'll go through our positional analysis and then we'll talk about setups. So for news, the economic data, there's not much this week. So really the only thing of note is the consumer sentiment report on Friday at 10 a.m. Eastern time and then the big event of the week was the Jerome Powell speech yesterday at 12.40 p.m. Eastern time, which traded up down just like an FOMC announcement. So just another Powell speech and traded again like an FOMC announcement. So for those of you who traded that, you probably did pretty well. All right, so that was the main event for the week and earnings. I've mentioned that, I think Uber came out, Disney reports this afternoon, I believe. So nothing like last week with with Apple, Amazon, Alphabet and others reporting last week. And then finally, back to events and economic data next week. So we have somewhat of a reprieve this week from economic data and events. And then next week, the CPI report comes out on the 14th. So that's Tuesday the 14th. VIX expiration is on Wednesday the 15th. And then Friday the 17th is the big February monthly options expiration. Okay, so that is the news and the events. Let's get out of this and let's talk about levels. So let's go to go to book map here. We'll start with the S&P 500. So what I'm looking at here. Actually, I'm going to go. So this is a S&P 500 in book map. And I'm actually going to start with a bigger, bigger picture view. So this is in thinkorswim. This is a 20 day one hour chart of SPX showing the key gamma levels from spot gamma. And this is updated. I update this every day. This is available to spot gamma subscribers. And you have to download the latest think script and update it in thinkorswim. So this is showing the latest levels for SPX. And here's the put wall at 4000. And that actually moved up from yesterday, 3900 yesterday. And the call wall remains at 4200. 4000 is also the key gamma strike. And we'll look at gamma charts in just a few minutes to confirm that. So these are the levels that are in play for today on a bigger, bigger picture, longer time frame view. Let's go take a look at a daily chart now. So this is SPX for today. And I'm going to zoom in on this a little bit. Actually, let's start with start with yesterday. Let me shift around just a little bit. Okay. So here is SPX for today. And updated levels. So this shows the crazy movement yesterday as Powell speaking up, down, then up again. And then traders now appear to have had second thoughts about what Powell said. And the S&P 500 gap down lower from this 4177 level and then reversed. And that was a good long setup. We'll talk about that. That was confirmed by Hero. And then it looks like the SPX is trading lower again. So this is a closer look at the levels in play. And one reason I look at this, this is just a very simple chart of SPX, the key spot gamma levels and price. And that's it. So those are the levels in play for today, the 4150 and the 4152 combo level above and then 4100 level below. Okay, let's go back to book map. And again, the reason I'm showing that is it's just very simple view of price and levels. And what I'm showing on this chart, I have levels on this chart too. This is the spot gamma cloud notes. And these are provided, updated daily for spot gamma subscribers. This is showing key SPX levels like the 4150 level there. And also that combo L2 level, which is a combination of SPX and spy gamma levels. And one thing to note is spot gamma is still using a 15 point difference between ES and SPX. So this these SPX levels and combo levels are converted to an equivalent ES level. And again, spot gamma is using a 15 point difference. And I am showing that difference at about 10 points now. So these levels are about five points too high. So that shows that this support level here at 4130 should have been at 4125. So that makes more sense. And that is the that's the 4150 the SPX 4115, I'm sorry. Okay, JEC says I got 10.08 for my levels. I assume you're talking about the ES SPX difference. Okay. All right, so I'm pretty close there with with 10 points. Okay, so just keep that in mind as we look at this chart. And then I also have my cloud notes that shown in this column. And I'm still using I I'm still using the levels that that spot gamma provided. So that 4165 that was noted 4150 SPX 4165 ES that was noted as a pivot level around the spy 415. And in YouTube Milton says Hi, I'm sorry, the volume is very low. Can you up a little bit? No, I really don't know. I'm speaking right into my microphone. There's nothing that I can do to to up the gain on my microphone. So hopefully, hopefully this is okay for everyone else. Okay, so this is these are the levels that are in play today. And again, looking at this chart, just keep in mind that the that the SPX level should be about five points lower. All right, and let's take a look at we can just take a look at spy. And these levels are pretty close to correct. So there's the 4150 level. There's the 415. So this is the the spy 415 level, that's the call wall and the key gamma strike. And the spy 413 C2 level, that's a combo two level. And then this 410 LG three, and that was noted to support in the spot gamma AM founders note. And it did act as support around 1130. Alright, so those are the levels that are in play, both on the both on the ES and and on spy, a little bit easier to see on the thinkorswim SPX chart as well as the spy chart here. All right, shifts and levels. And there were some shifts and levels not not that many. So first of all, I mentioned before, the SPX put wall moved up from 3900 to 4000. And then the spy call wall moved down from 420 to 415. And the spy key gamma strike moved up from 410 to 415. So somewhat of a I look at that as a consolidation of gamma at the spy 415 level. And then for QQQ, the put wall dropped down from 300 yesterday to 285 today. And the key gamma strike moved up from 300 to 310. And also for QQQ, the call wall is also at 310. So more of a consolidation at the 310 level for QQQ. And let's take a look at the gamma charts now. So these the absolute gamma charts and this will this will clarify what I'm looking at. So this is market makers gamma position gamma levels. The zero line is shown here. And above that's positive gamma or call gamma shown with the black lines. And below that's put gamma or negative gamma shown with the teal lines. So this is SPX. And note here the 4000 remains the absolute gamma strike. And that is the strike with the largest amount of gamma the largest absolute gamma. And that has been the key gamma strike or the absolute gamma strike for quite some time. And the notable thing here is the amount of call gamma above the 4000 level. So traders are adding call positions above. And let's take a look at all the levels. So there's the 4000 level. And that is the key gamma strike as well as the put wall. And the put wall is the strike with the largest net negative gamma. And then here's the 400 4200 call wall. And that's the strike with the largest net positive gamma. So the put wall can be expected to act as support. And the call wall can be expected to act as resistance. So it looks like let me check for questions in YouTube. There's some discussion going on. Okay, so Dave says Doug's volume is fine. Always fine on both. So I assume that's on YouTube and Discord. So Viney I just explained about the put wall call wall and key gamma strike. And this is showing that visually here again SPX. That's the strike with the largest absolute gamma. So adding the absolute values of call gamma and put gamma. And that's also the put wall. So that's the strike with the largest absolute net or net negative gamma. And then the call wall. And that's pretty obvious. So you take the call gamma minus the put gamma, the largest net positive gamma. And that's the call wall. Okay, and there's also a question about the C level marks every day. And yeah, it is somewhat time consuming. That's the way I like to see my charts and not willing to put in the effort to do that. So the way that works I use a an add on in the available in the book map marketplace called price lines. And I fill out the updated levels in our spreadsheet. And those are just updated on my all my charts. Based on the changes to the spreadsheet. So it takes a few minutes it is time consuming. Okay, so that is the SPX. And there's spy. So for spy, there's the 400 put wall. And that's pretty obvious the strike with the largest net negative gamma. And again, the 415 key gamma strike. And that's also the call wall. So it's pretty obvious there that is the strike with the largest net positive gamma. And then what spot gamma noted this morning and the AM founders note is this range right here, noting that 410 spy 410 should act as support. 415 is a pivot level. And then 420 the gamma there is the top end the resistance. Okay, then let's take a look at NASDAQ. And we'll look at qqq in DX is not, not significant. So if we qqq the put wall drop down here to 285 and that's that's not in play. But anyway, that's what it is the put wall. And then there's also amount of significant put gamma 300. And then 310 that's the absolute gamma strike or key gamma strike, as well as the call wall. So those are the gamma levels in play for SPX spy and qqq. All right, let's take a look at data now. And what I want to take a look at is this gamma notional. And this is market makers position on the gamma curve. And this is SPX on the left here, spy in the middle and qqq on the right. And what this is showing again is market makers position on the gamma curve. And it's important to note that, whether the gamma notional is positive or negative, in a negative gamma environment that existed for most of last year, that means that traders are long puts, market makers are short puts, and they have to sell futures as price decreases to hedge their delta exposure. And just the opposite, they can buy back those short futures as price increases. So that tends to increase volatility with market makers trading in the direction of price. And then in a positive gamma environment, like the SPX here, the assumption is that traders are short calls, market makers are long calls. And as price increases, they have to sell futures to hedge their delta exposure. So they're trading against price. And that tends to reduce volatility in a positive gamma environment. So all of these became more positive, or in the case of spy less negative. So SPX yesterday gamma notional was 256. And today it's 518. And then spy yesterday was minus 776. And made a pretty significant jump to minus 60. So just very slightly negative for spy. And then qqq yesterday was minus 83. And today shifted to positive 128. So that at the start of the day today, that is how market makers were positioned on the gamma curve. And this is illustrated here with these Vanna charts, Vanna models. So this is SPX. And remember that gamma notional for SPX was positive. And there this is showing how market makers delta notional shown on the vertical axis changes with price that shown on the horizontal axis, as well as with changes in implied volatility. And that's shown by the green line. And that's the Vanna effect, the change in delta as implied volatility changes. So according to SPX here, the market S&P 500 is in a positive gamma environment. And market makers should be trading against price, which will tend to reduce volatility. Here's spy. And this is pretty neutral for spy. And spy has even this year has been, I think mostly, if not all negative gamma. And then qqq is slightly positive here. So I would say both spy and qqq are fairly neutral with SPX being positive gamma, meaning traders or market makers will hedge against price. All right, the next thing to look at. And again, I'm doing all this. This is my morning planning preparation. And I'm doing this to again develop a thesis for the day. So this is a spreadsheet that I keep every day. I track the key gamma strike for all of the stocks in my watch list. And the far right column is showing the key gamma strike from yesterday. And then the current key gamma strike is the key gamma strike for today. So this is and then I color code these indicating that the key gamma strike either increase that shown by green from the previous day or decreased and that shown by red. So obviously this is showing a lot of green today, meaning that market traders were expecting and accepting higher prices yesterday and positioning themselves in higher strikes. So that's that's how I interpret that information that is that's bullish to look at rising key gamma strikes and and other key gamma levels like put walls and call walls. And it's hard to keep track of all that. So I just track the key gamma strike. So that was my planning and preparation for the day. And based on that, my thesis for the day was for the S&P 500, I'd say neutral to bullish looking for a lower volatility trading range today. And also, you know, slightly bullish and really looking for SPX and spy in particular to trade in a range between 410 and 420 with a slightly bullish bias. Really based on this key gamma strike list and all the key gamma strike key gamma strikes rising for all these stocks. Okay, let me check for questions. And JTT says I found the time to build the process and go through it. It does pay dividends. It pays dividends. I agree. Yeah, it takes time, but it it you know, you need to develop a process that makes sense. And that's what I've done. And the godfather speaks, ask, Where do you find the key gamma strike number? And that is from spot gamma. So that's it. This information is available to spot gamma subscribers in the spot gamma equity hub. Okay, so that was my my thesis for the day. Didn't necessarily play out. So let's take a look at some setups now. And remember, I said I have a two step process. And the first is positional analysis. And the second step is execution. And I confirm my thesis with execution. And that is again, looking at order flow and book map. And looking at market make your hedging flow and spot gamma hero. Right. So speaking of hero, let's take a look. So what I'm looking at here, let's start with ES. And this is the combined signal, SPX and spy into the ES. So this is showing puts and calls for SPX and spy combined into one signal for ES. Let's zoom in. So I interpreted this as first thing in the morning as bullish. I was looking at the rising hero signal. And that led to a few long scalps. And then hero leveled off price dropped lower. And then hero starts rising again. And remember that for 10 level, as noted as support and the spot gamma AM founders note. So this divergence here led to a long setup. Right. And it turns out just above the four 10 level. So confirmation long, somewhat of a confirmation short, then confirm divergence long at the four 10 support level. And those are spy numbers, of course. All right, let's separate out puts and calls. So traders were buying calls up until about 12 1230. And they have started buying puts around 1020. And that's when price started to move lower. All right. So, you know, I mentioned this all the time that I'm looking at two screens. While I'm doing this, I can I'm only showing one screen. But I'm looking at hero on one screen and book map on the other screen. So let's go back and let's take a look at spy. So I'm going to go back to book map now, look at spy. So there were some scout long scalps in the morning. And there was that short setup and the reversal just above the four 10 support level. And let me just show you where I'm where I get that. Let's let's go back to here's the AM founders note. And this is what I'm looking at here. The 4100 SPX 4100 to 4150 spy 410 is support. And remember, we looked at the looked at this, the 410 to 420 level, 410 support, 415 pivot, and then the 420 as resistance. So those that's the the setup the levels for today. All right, let's go back back to hero. So now it looks like traders have started started fading this as price moved higher. And now it looks like they may be taking positive delta positions again. And spy the spy chart is going to look very similar. spy is spy options trades are much more important, much more dominant than SPX typically for ES for the S&P 500. I'm just going to change the look back period to see if this gives us any, any more clarity. So instead of looking at the cumulative signal for the entire day. So yeah, it does. So now what this is showing when we just look at the past 30 minutes of data that traders are once again, as taking positive delta positions as price approaches that low level. All right, let's change this back to full day. All right, let me check for questions. And spot God, Godfather speaks, see that 415 is a call wall and large gamma level on spot gamma. And I always note that the the call wall, I want to make sure I know the where the call wall is on my chart. So that's how I that's how I noted on my chart. Okay. And no questions and discord. All right, so let's just take a look. I've got some other setups that we can go through. So that was the ES and spy. Let's just take a, we'll take a quick look and spy and I'll see that it is very, very similar to the ES chart. Same thing. And once again, go to book maps of their spy. And again, notice as spy is now approaching that low level for the day that traders were taking positive delta positions. All right, let's go to Apple now. And I'm just going to go through these setups. And I focus mostly on the S&P 500. Let's go to discord. Take a look at a go to hero. Look at, look at Apple. And there's some good setups and stocks confirmation short here in Apple. And calls are driving that show by the orange line, traders are selling calls, not doing much with puts. Notice the, the put line, the blue line is pretty much flat for the day. And traders are selling calls. And that was driving price lower. And then price is leveled off as traders stop selling calls. And let's go back and take a look book map for Apple. Not a lot of range, but a good short setup. Just short on the pullbacks, like I have shown here. And the primary target was the 150 key gamma strike and all the liquidity at that level that shown on the heat map and book map all the resting limit buy orders at that level. And that liquidity often acts as a, a targeted tracks prize. And Frank asked, where do I get the hero chart? Where do I get the founders notes? And the founders notes are available to all spot gamma subscribers and hero is available to spot gamma alpha, alpha subscribers. So I use, I use spot gamma and I use spot gamma alpha. And I do have a subscription and use that for my planning and as part of my execution process. All right, so that's Apple. Next one AMD. Let's go take a look at hero AMD mainly looking at a, so there's somewhat of a confirmation for short in the morning that really doesn't help looking at a divergence long that so far is not played out looking at this and expecting a long setup and so far that really hasn't played out. So for hero, not a lot, not much there. Let's go on to the next one. Amazon, short and long confirmation, short and long. Let's go take a look at book map for Amazon. Oh, one thing I meant to point out for AMD was a key gamma strike there. That was a target for the morning short. And then price did reverse higher that level, but not anything to write home about. So anyway, that was a level in play for AMD. So let's go back to Amazon now. So here's the short setup reversal at the 99 level and then long setup. And here's the 100 foot wall and key gamma strike in play. And that was the initial target for the short this morning and price went down below to the next level down below the liquidity at 99 and then reversed higher. And let's take a look and see what what traders are doing now on Amazon. What options traders are doing. Let's change the look back period 30 minutes. So yeah, they're going long again. So it looks like this is providing a little bit more clarity here. Confirmation short, divergence long, divergent short and confirmation long again. So a good signal on Amazon here or good signals. Let's change that look at Google. So confirmation short and Google and Google and Microsoft were in the news today. So Microsoft apparently had news about some changes to their Bing search based on chat BT, chat GPT or something like that. And we'll see with Microsoft that traders weren't having any of that weren't buying that bullishness in Microsoft. But anyway, that had an impact on on Google as well, which I thought was was pretty silly. So anyway, there's the confirmation short and then a divergence long kind of a confirmation divergence long. Let's see what traders were doing. So they were selling calls and buying calls. Now not much. Let's change the rolling window. And that doesn't provide a lot of clarity. It looks like yeah, this this helps. So again, taking bullish positive delta positions here, which makes sense to me good opportunity to sell a put just my opinion. But I don't think Bing is going to be any competition for for Google. Okay, so that's Google. And the next is meta. So in the morning, confirmation short. Let's go take a look at book map. So we skip Google. So here's Google. So there's the short of the morning. Notice all the green dots coming in here. Market buy orders, aggressive buyers coming in at the 99 level. And now they're trying to take Google higher again. All right, meta. And there's the short. Let's go back and take a look at take a look at hero. So now traders are taking positive delta positions trying to move meta higher. Let's take a look at Microsoft. So again, the traders weren't weren't buying the news about the chat GPT. So they were selling calls and buying puts a little bit more clarity from the total signal there. And then they've that activity has leveled off and price is not moving higher. Let's go take a look at book map again. So just like many of other the other stocks in the morning, you know, good short set up to pullbacks. The first target was the 185 liquidity here. 184 price made it all the way down to 183. Then the aggressive buyers start to come in. And now just like some other stocks, they are attempting to move price higher. And there's the 182 put wall down below. Let's take a look at Nvidia. Oh, I'm still on the meta. I'm sorry. So here's, here's Microsoft. It's hard jumping around. All these different stocks. So again, I apologize looking at the wrong thing. So here is showing Microsoft traders not making much progress moving price higher. All right, let's go to Nvidia now and pretty choppy price action and video. Let's take a look at hero confirmation short in the morning. Traders were selling calls and buying puts. Let's take a look at book map. There's Nvidia. Pretty choppy price action like it has been recently. I think there are a lot better setups today, kind of difficult to trade. And JC, thank you. It is difficult. I'm looking at two chats and trying to go through about 10 different stocks here, plus the S&P 500. Okay, so that's Nvidia. Let's take a look at QQQ. And yeah, Nvidia, it's been pretty choppy price action. There are, again, a lot easier stocks to trade for today. I like to trade something like, you know, again, this choppy consolidation can be a little difficult and the S&P 500 does this a lot too. It's choppy consolidation. You know, if you can get a hold of a trend like this, Microsoft, Meta, Google, or even even spy after it broke down. Then I like to trade those setups a lot better. There's clear trends. A lot easier to trade than the choppy Nvidia. And let's take a look at Tesla. So Tesla has been pretty fairly choppy to large, large pullbacks, two or three point pullbacks. Let's take a look at Hero for Tesla. So as usual, pretty strong confirmation between price action and options trades and hedging activity, especially in the morning. Let's see what traders were doing. So calls are driving here. Traders are not doing that much with puts. They are buying puts, but they were buying calls in the morning and that was driving price higher that shown by the rising orange line. And then Tesla reverses lowers, traders start selling the calls and then starts to move higher again as traders start buying calls. Let's just change this rolling window to total and still slightly bullish here for this total line, looking at a 30 minute rolling window. So let's see what Tesla may do back to book map. So here's that morning, run up, move down, consolidation, and then Tesla is broken above the 200 call wall key gamma strike level and appears to be moving higher. Let's see what's in play above. I expect to see high liquidity at 205. And yeah, there it is. Now notice this is the upper edge of the expected move and this is a one week expected move based on the options market. It's a one standard deviation move again, based on the options market. And I update that once a week on over the weekend. So Tesla, if it's up at the upper edge of the expected move, has been pretty strong this week. And if it continues higher, there's next big liquidity target at 205. So again, move higher, kind of a trend break. And now now moving higher again towards the upper edge of the expected move and liquidity targets at that level around 203, 204 and then ultimately 205. And JEC asked to use common implied volatility for the week to measure the expected move. And actually, I use a script that I got from somebody else in Thinkorswim. So yeah, I don't know what it's based on. If you don't have access, it's just easier, quicker and easier just to use, look at a script in Thinkorswim. So let's take a look at, this is for Google, let's take a look at spy. Actually, we can take a look at at Tesla since we're talking about Tesla. So what I look at is this auto expected move. So this is just a script that I have that updates itself every week. And the green line is the upper edge of the expected move. The red line is the lower edge. And of course, if you want to do this yourself, you can just, you know, calculate this for, you know, for the following Friday if you want to do that over the weekend. So that's what I'm using. It's just, you know, really easy. No, you don't have to get out my calculator. I can just look at the look at the red line and the green line. And so you can see what this is showing is that Tesla on the way down often move lower. So Tesla is often more volatile than the options market expect. So moving as it's moving down, it's exceeding the weekly expected move. And then on the way up, exceeding that weekly expected move trading above the green line, maybe closing here last week close just at the upper edge of the expected move. And right again, right now trading just below the upper edge of the expected move. So again, yeah, this is just an easy way of doing it. Okay, so there's a question in YouTube, what is hero? And actually hero is capital H I R O. That's a tool provided by spot gamma. And it stands for the hedging impact of real time options. So the idea behind what spot gamma provides. And this is what I use in my positional analysis is a lot of data that's static. And a lot of that is based on the open interest that's updated once daily sometime during the night. And spot gamma provides applies all of their proprietary calculations gamma waiting to these levels to come up with their own levels again based on this static data. Open interest provided by the options clearing corp once daily sometime during the night. So that's the static data and that's what I use for my positional analysis. And then like I mentioned, my execution is based on real time order flow on book map. And we've seen that and then real time hedging flow and hero. Let's go back to hero now. So this is this is spot gamma hero. Again, hedging impact of real time options. And this is the real time component to what spot gamma provides. So they provide static data. And then that's updated during the day with this hero chart showing how traders are what we're showing what traders are doing with the options. They're buying or selling puts and calls and how market makers are responding to those trades. And that's the the hedging impact. So again, two components to my process, the one is planning based on static data. And then this real time component with order flow and book map. And real time hedging flow with hero. Okay, my time is up. And I think I've answered all the questions you're welcome in YouTube bedtime stories. And JC, thanks for your thanks for your comments. Thanks for your help here in discord. And again, that's all I have. So I will see you tomorrow. Thanks again. Bye