 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 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. The focus of my presentation and the focus of the options-dog chat channel in 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. I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected volatility and trading range for the day. And the second step of my process is execution. And I look at real-time order flow in Bookmap and real-time market maker hedging flow in Spot Gama Hero to confirm my thesis and to help develop a directional bias as well as for setups. And just to be clear, when I talk about setups, I'm going to be talking about an underlying asset, whether it's the S&P 500 or a stock like Apple or Tesla. I'll be talking about the underlying and the setups can be taken any number of ways with shares, with futures, or options, single options or option spreads up to you. I'm just talking about an analysis based on the options market and then talking about setups and underlying assets that can be taken, again, any number of ways. And questions and comments are welcome and I will be watching the option stash dug chat channel and discord and also the chat and YouTube for your questions and comments. So please feel free to post your questions and comments. All right, let's get started. What I want to cover today, first of all, go over news events, economic data and events for the week. I'll talk about my positional analysis and then talk about some setups. All right, so first of all, economic data for the week. There's a lot of pretty much minor data that came out that comes out this week today. I think there was some housing data at 10 a.m., something at 10 a.m. and then starting tomorrow. The only thing that's marked here with high significance is the building permits tomorrow at 8 30 a.m. Eastern time and then for the rest of the week just minor medium or low impact data, jobless claims, manufacturing index, PMI data on Friday, and also Friday note is the monthly expiration. So that is the March 21st, April 21st monthly expiration. All right, let's talk about positional analysis now and I'm going to go look at book map and this is showing key levels as well as order flow again in book map for the S&P 500 futures. Normally I show a couple of thinkorswim charts, a larger time frame, but for some reason SpotGamma did not update the thinkorswim script for today so the levels are out of date on my thinkorswim chart so I'm not going to show that and the S&P 500 ES is trading in a narrow range today as you can see and let's just zoom a little bit. Here are some levels shown on my chart for the again ES S&P 500. I have two columns of notes here and the first is the SpotGamma cloud notes provided to SpotGamma subscribers for a variety of platforms and these appear to be up to date and this is showing first of all key SpotGamma levels at SPX so this is SPX 4150 and converted to an equivalent ES number. Looks like SpotGamma is using a 27 point difference and I'm using a 25.25 point difference between ES and SPX. Alright so in YouTube Eli asks is a think script you use something you share uh no it's not that is something that's provided to um SpotGamma subscribers and they provide these levels again for a variety of platforms and I'm showing the levels in book map and again for some reason the think script was not uh was not updated today it was showing levels from last week so I did not uh I'm not showing that today and then also here's the volatility trigger and that is again for SPX I'm showing it just a little bit lower so I'm showing my cloud notes here and here I have the 4150 level I'm also showing key SPI levels and there's the SPI 413 volatility trigger and you can see that that acted as resistance today this morning between 9 30 and 10 30 so the for uh for the first hour this morning that acted as resistance and note this is also um I'm also showing ES numbers and this is the I show the 50s and the zeros for ES and so that's the ES 4150 level and Eli asks another question and Eli asks does the price lines add on allow you to set auto updating formulas I don't know I don't think so I have never looked into that um I'll show you what I do uh and just a minute and I don't think the uh the levels change like the ES SPX difference I don't think it changes enough during the day to make a difference and I really don't want to see those levels jumping around I want something stable so I change that every day and I have um thanks to another thing script that I will share in discord some a member in discord shared a thanks script and I modified it made a couple of others that calculate both the the ES SPX difference and the ratio of SPX to spy and the ratio of ES to spy and I'll show that in just a minute so here is the um again back to the ES futures S&P 500 futures this is as Eli asked this is my I'm using the price lines add on here for these so I fill out these numbers in a a spreadsheet my own spreadsheet this morning and those levels then are shown in this column and it also draws the lines and I like the lines it makes it very easy to see as you're trading um these levels again the spy volatility trigger at 413 acting as resistance and the ES 4150 acting as support and I'll talk more about setups uh in a few minutes all right let's while I'm mentioning that thanks script let's just take a look at that and I have these on uh this is a thinkorswim chart and this is showing spy and what I'm the scripts that I have are shown in these badges here so here is the and I will share these in discord right so first of all here is the ES minus SPX and right now it appears to be varying between 25 and 25.5 so I just took 25.25 looks like it's spending more time at 25 and then here is the ES spy ratio at about 10.0904 is what I use today and that has uh not changed much so I think an auto update I'm not sure would would be that helpful I just I set these levels uh ES minus SPX I start using the the prior day this ES divided by spy that's shown when spy starts trading and then here is SPX divided by spy that's the SPX spy ratio and I use that for showing the SPX levels on my spy chart and then this ES spy ratio I use that for showing the spy levels on my ES chart so let's go back so this is so I calculate the rate or I I get the ratio from that think script for the spy levels and I just use that number and calculate there the difference or the ratio and I use that number in my spreadsheet all right so that is the SP500 the levels that are in play very narrow range today let's talk about shifts in levels now and there were a few for SPX the volatility trigger shifted higher from 4095 last Friday to 4110 today and also the spy SPX I'm sorry SPX put wall shifted higher from 3800 to 3900 and then for spy the volatility trigger shifted higher from 411 to 413 and then for QQQ the volatility trigger shifted higher from 316 to 318 and the put wall also shifted higher from 300 to 315 all right let's take a look at gamma levels now the absolute gamma levels and we'll see where those levels come from let's go all right so these are the levels this is SPX we'll start there this is showing the absolute gamma levels and this will all right a batch I'm not sure I understand your question I haven't talked about any setups yet or I haven't talked about hero so I'm not sure I understand your question you may be jumping ahead all right so here's the the gamma levels and maybe you could clarify maybe you're I'm not again I'm not sure I understand your question in this in this context so anyway here's the SPX the absolute gamma levels and this is showing positive gamma or call gamma above in the orange lines this is market makers position and negative gamma or put gamma with the blue bars all right so here is the 4000 level that is the absolute gamma strike the strike with the largest absolute gamma that can be act as support resistance or a magnet for price and here's the 3,900 put wall that's the strike with the largest net negative gamma and that is expected to act as support and then here's the 4,200 call wall the strike with the largest net positive gamma and that can be expected to act as resistance and again the for SPX volatility trigger is at 4,110 and that is spot gamma's proprietary gamma flip level below that level market makers position on the gamma curve is negative and that means they have to trade with price to hedge their delta exposure and that tends to increase volatility that's typical of a negative gamma environment and above that level market makers position on the gamma curve is positive and they have to trade against price to hedge their delta exposure and that tends to reduce volatility in a positive gamma environment so that is SPX those are the key daily levels that i track let's take a look at spy now i'm going to zoom in on this chart and again positive gamma shown above with the orange bars positive gamma or called gamma and blue bars are showing negative gamma or put gamma and here's the 4,10 here's the 4,10 key gamma strike or absolute gamma strike for spry for spy strike with the largest absolute gamma and here is the 400 put wall strike with the largest net negative gamma can be expected to act as support and then the call wall at 4,15 strike with the largest net positive gamma and there's the 4,13 volatility trigger for spy so we i ask where can i you're logged into discord where you can find the chat room the chat room go to so it's in book map and look for weekly live webinars and then the options dash dug chat channel and then i'm also streaming in discord in the options with dug channel and i will post the think scripts after this webinar today i have not posted those yet so i'll post those later and those are the ones that calculate the espx difference and the espi ratio and the espx spy ratio all right so those are the levels for spy and normally i have to do a refresh before looking at qqq and for the nasdaq i just look at qqq and here is the 315 put wall support level the 320 is the call wall and the key gamma strike or absolute gamma strike so those are the levels that are in play for qqq all right let's take a look at one other chart here well just to point out again friday is expiration and note this is delta notional note that this the orange dominates the orange is larger than the uh than the blue delta notional so this is a call dominated expiration right here's the vana model this is for espx this is showing this chart is showing two curves the first this light gray shows how market makers delta notional changes with changes in price and that's all the light gray curve is showing and Gabe says hey Doug seems like the discord link is invalid uh i'm not sure uh exactly what you're referring to if you don't belong to discord yet if you have not signed up and it's free for everyone whether you're a book map subscriber or not there should be a link on the uh on the book map website and if you're having trouble with that just contact uh book map support support at book map dot com all right so this is the vana model for spx and this light gray curve is showing how market makers delta notional changes with changes in price and that's all the light gray curve is showing and what this is showing is as price increases market makers delta notional increases and they have to sell futures to hedge their delta exposure and that is typical in a positive gamma environment and then this kind of pink purple curve is adding implied volatility to that so that is showing how market makers delta notional changes with changes in price and implied volatility and that's the vana effect and that is that vana is the change in delta with a change in implied volatility so what this is showing is as price increases there's not much of a a vana tailwind this pink curve is really not a lot not a lot different on the upside here than the the delta only the light gray curve and then on the other hand as price falls as price decreases and implied implied volatility increases then this is showing that market makers delta notional will change will increase and they'll have to sell futures to hedge their delta exposure as price drops and that's typical in a negative gamma environment all right let's that's for spx let's just take a quick look at spy and we're just looking at this curve right here pretty similar and then also qqq all right Gabe thanks for the thanks for the kind words glad you're enjoying it all right so that's vana model now let's take a look take a quick look at some data here and just to point out gamma notional this is market makers position on the gamma curve for spx spy ndx and qqq all these numbers are positive again market makers position on the gamma curve is positive that means that traders are short calls for an index market makers a long call since the positive gamma position and they have to sell futures as price rises to hedge their delta exposure and then when price drops they can buy back those futures and that again tends to subdue volatility in a positive gamma environment so given that my thesis for the day and my plan for the day was definitely looking for a trading range today not a not a trend day but a a range day all right let's take a look at some setups now and i want to talk about the s and p 500 first i'm just going to point out so this is the s and p 500 it's a combined signal for spx spy xsp which is not significant and also now new starting last week es futures okay so this is a combined signal for all these instruments and i typically look at this signal or spx so spx seems to um either again spx or the total combined signal seems to be providing the best most tradable signal so that's spx that's one component of this s and p 500 combined signal and let's take a look at spy and i have not gotten that much out of the spy signal recently it seems to be that spx is um having a stronger influence on on price action and order flow and then we can also look at just the future signal here and that's the signal and that's definitely bearish today so there are a number of ways to slice and dice this and then each um for each signal we can look at total expirations or just zero dte and we can also look at puts and calls separately so let's go to the spx signal here and i'm going to first of all zoom in on the morning session and this provided a couple of great short divergent setups and the first was at 10 am notice price rises hero levels off then starts to fall and price moves up setting up the first short here and it turns out this was at spy the spy 413 volatility trigger and here's the second short oops wrong tool the second short set up hero starts to fall and then it took a while but again that 413 level in play so let's go take a look at at book map now so those setups were around 10 am and 10 30 i'm going to zoom in so here's the here the short setups the resistance at the 413 volatility trigger good short setups every time with hero being a a leading indicator traders are taking negative delta positions on in total net market makers were selling futures and batch i still don't understand your question uh all of that what right so batch i'm sorry i don't understand your question i'm just taking a uh you know i guess a pretty simple approach here and looking at what well let me let me back up and talk about how i approach this so i'm looking at at hero here i see this divergence traders taking net negative delta positions in the smb 500 and i'm then i'm looking for a potential reversal level and there it was at the 413 volatility trigger i already know that it acted as acted as resistance once then hero starts dropping there's the second resistance and then hero drops again traders taking negative delta positions as price approaches that resistance level for the third time let's go take a look at book map now zoom out and let's take a look at one other setup somewhere between 11 and 1130 now normally i well what i'm trading i have two screens so i'm looking at i'm looking at hero on one screen and hero on one screen and book map on another screen and this setup at 1130 was not as apparent it was more of a confirmation let's go back and take a look at book map and note i'm also reading order flow here and let's just cover that so here especially at this last setup at um at 1030 note the shift in order flow here green dots market buy orders on the way up those are volume dots showing buy minus sell and green indicates that they're more buyers than sellers and note the shift in order flow as price reaches that 413 level aggressive sellers start to come in you can see the shifts and dots from green to pink and the pink is the color that i use for aggressive sell orders right i looks like truman is trying to answer batches question okay so and you can see the same shift in order flow here just before 1130 reversal at just below vwap let me bump up the liquidity here you can see these limit sell orders here liquidity coming in trying to get filled just below the 4140 resistance level that's spx 4150 and price reverses lower pink dots come in and the price target down at the 4150 level es 4150 so those were the short setups in the smp 500 this morning all right elie asked to use default settings for cvd stops and iceberg tractors below uh i'll tell you what i use for cvd i use the default so that is i've got a number of different cvds i'm not sure why it's showing this one here um for the standard cvd let's see i'm not sure oh here we go there's cvd so this is what i'm using i've i really don't use this i have this shown uh for showing different sizes i did that sometime ago but the the only thing that i've changed is the color so i i like brighter colors here so that's what i'm using for positive and negative and note that the line will shift from positive to negative from blue to uh this pink color and then for the sub chart indicators for stops and icebergs i am using the sum mode and that's really the only change i've changed the colors but i'm using some for both icebergs and stops stops and yellow and sums and blue all right elie i hope that answers your question one other thing that i've started to look at is i normally have the in the past i've been this is in q nastic futures and i have been tracking for everything uh all the instruments in my book map chart here i've been tracking the weekly expected move there's the lower edge the weekly expected move shown with a purple line and there's the upper edge of the expected move and now i have started tracking or adding these blue lines which are the daily expected move here's the lower edge of the daily expected move for in q and these are all based on the options market and this level the for in q has worked very well recently so if you want a an expected range for in q especially uh that's something to keep track of so there's the lower edge of the uh daily expected move and that is for in q and i've got it on the same levels on my es chart here yeah rj that is um yeah that i'll show you where i'm getting that so at the um at the close today at at 5 p.m when when uh future stop trading for an hour then i'll just take that this number so the end of the day i don't know why was that little end of the day i'll look at this number right here and that's for tomorrow that is the right now the one dte look at that number right there and you can look at that in any options chain and that'll that's a plus or minus and then i'll just note that number and i'll update my spreadsheet and uh elie asked do we take this spot gamma reference price posted in the spot gamma am founders note to calculate expected move ranges and yeah you can what what uh he's talking about and let's go to and spot gamma used to provide more uh more information on this and this is so you can use this to calculate uh that expect expected move as well although it's only shown for uh spx and spy i've just been using the it's just a little bit easier to get that information from um from thinkorswim or any i'm sure any other um trading platform with an options chain should show that right let's take a look at some other setups so that is the smb 500 i'm going to look at some stocks here's amd and i'm going to zoom in on the morning session and noted this divergent short setup so heroes falling as price makes a higher high let's go take a look at book map amd and here's the short setup at vwap note the shift in order flow the shift in all the green dots to now pink dots coming in market sell orders reversal at vwap and the 90 putwall key gamma strike price targets at 89 and the price moves lower down at the 88 level and those are high liquidity targets price is attracted to the liquidity what truman says the expected move for the toss option chain is the expected move by expiration and if there are daily options like es and q spx spy and qqq then it is daily so i'm if i'm looking at one dte today that will be for tomorrow and if i'm looking at zero dte that is for today so to set the levels for tomorrow at the end of the day i will look at the one dte note those in my spreadsheet or just write those down and those with the levels for tomorrow that i use that i've been using right so that's amd there's amazon and there are a number of ways that you can do those expected rating trading range at looking at selling premium if trade if price is trading inside those ranges looking at selling an iron condor for example or price reaches one of the daily extreme selling a vertical or um you know any way that you want to approach that so there is amazon let's take a look at hero for amazon and this was another divergent short options traders taking negative delta positions price makes a higher high then reverses lower a couple of short setups there oh just after 10 and around but before 10 30 all right let's take a look at at book map and batch ass there's a big wall at 101 on amazon um by wall if you mean spot gamma level no there is liquidity at 101 and that's shown with the heat map here and in book map those are resting by orders and buyers seek sellers and sellers seek buyers and this liquidity tends to attract price acts as a magnet for price and that's what's so nice about trading stocks is this liquidity comes in often at the rth open and stays there for the remainder of the day until it gets filled if they don't get filled they'll come in the next day all right and rj asked do you have any thoughts on tracking iv versus realize volatility and let me show you what i do so let's go back to thinkorswim let's take a look at spx take a look at a chart and i'm going to take a look at this volatility chart and i have a a number of volatility settings i'm going to zoom in on this and i haven't updated these yet that's the weekly expected move this is what i have been using and i've had this for years this is showing iv compared to historical volatility or realized volatility and as long as the red line is above the blue line that means that fear is overstated that implied volatility is higher than realized volatility so it's a good time for selling selling premium and that's what i use that for so let's zoom back out so anytime let's say right in right in this range here with pretty steady price implied volatility much higher the red line much higher than the blue line a good time for selling volatility and rj asked what's the formula on on realized i have used this script for years i i don't know i'd have to go take a look at it all right and just to point out this a couple of ways of approaching this range day first of all here's an iron condor and that's zero dte options here's a vertical so i'm going to keep an eye on these all right so that is amazon let's take a look at meta go back and take a look at hero and meta was more of a confirmation short right here about 1020 let's go back take a look at book map notice price reached that high traders started taking negative delta positions and there's the reversal at the 220 key gamma strike as traders were taking negative delta positions let's take a look at microsoft and microsoft i thought hero was actually a little bit of a lagging indicator here but after the break of the 290 key gamma strike there was a little bit more clear as hero leveled off let's zoom in on this warning so price moved up hero options traders lagging a little bit as price reached a high hero started to move lower and price dropped pretty quickly below that 290 key gamma strike not as clear a setup as some other stocks and also futures so that's microsoft and e i ask when do you update your price line spreadsheet for the trading day i update it before the rth open so i um on the the levels so first of all i'm getting for stocks let's take a look i'm getting my levels here from equity hub for stocks so the put wall call wall key gamma strike hedge wall uh for stocks those are all updated in the morning and i can update that spreadsheet and uh that's it i'm done for the day for stocks and then for for the smb 500 and qqq your spy for example the spot gamma has these pop-ups and this is showing the key daily levels like put wall volatility trigger call wall and then the key gamma strike is shown in in equity hub here so that is the key daily levels then it's also showing some additional levels and i add those all to my spreadsheet and then i also have in my spreadsheet we go to my stock spreadsheet here spy and then i also have the spx levels shown right in here and i will that ratio the spx spy ratio does not change that much from day to day so i start with the the number wrong tool i start with the number that i had yesterday if any of these levels change and it's pretty close so that is my that's my spry set up the same for qqq and then for futures i have just the same same spx levels then i'm also showing the key spy levels and all of this i can update before the open and then i just check the ratios and the spx es difference and if i have to make any changes it will be minor from day to day so i can do this all before the market opens and then make minor minor changes based on any changes in the es spx difference or price ratios after after the open all right let's take a look at qqq first thing in the morning there was a nice divergent short just in the first 30 minutes notice hero dropping immediately from the open traders taking negative delta positions at the open and that set up a nice short just uh no a few minutes after the open let's go take a look at a qqq and book map and there's the short set up at this 319c one level and that is a combo one level one being the most important in a scale of one to five so a quick run up to that level and then a short another opportunity to short there let's take a look at tesla let's take a look at spy and i have the same levels on spy my spy chart as i do on the es chart so there's the spy 4 413 volatility trigger resistance level there's the spx 4150 notice resistance level in the spot gamma am founders note so definitely not a lot of range today it's sort of a range day with a bearish bias so those are the how the levels that i uh so the levels on my spy chart so i can trade spy or es just looking at the chart here and then let's wrap it up let's take a look at tesla and as usual the stocks that i trade tesla and video uh are the most volatile have the most range let's take a look at hero tesla and as usual with tesla there's a very strong correlation between options trades hedging flow and price action and this is separating puts and calls the orange line is showing call transactions and the blue line is showing put transactions and what this is showing is pretty much from the open a couple of 10 minutes after the open trader started buying puts initially they were buying calls rising orange line they started selling calls and price moved lower setting up the short right here note the buy sweep all these small green dots that buy sweep up to the one night 89 level and then price reverses lower let me just zoom in on this section right here and note the shift in order flow big pink dot comes in more pink dots and order flow finally shifts bearish that's right rj traders were definitely buying puts looking for lower prices in tesla let's take one final look at hero look at the total numbers here this notional value 47.5 million positive 47 point now 7 million versus minus 68.1 million for puts so net net put buyers are winning all right so elie ask orange line up traders buying calls dealer short calls yes that is uh that is what that means so the lines are shown in terms of delta so rising orange line means that traders are buying calls market makers have to they sell the calls taking the other side of the trade and they have to buy stock to hedge their delta exposure all right so truman ask can you stay in tesla by what hero shows as long there's not a divergence i um i really don't see much of a divergence uh typically with with tesla tesla you're looking at more of a confirmation the hero line shown in purple tracks the price line pretty closely and tomie ask are those charts in real time yes so that is this is hero h i r o hedging impact real time options and elie ask blue line down traders are buying puts dealers are selling puts and yes that is correct so think of these lines always in terms of delta so a positive trade would be traders are buying calls and or selling puts that's positive delta and negative delta is selling calls and buying puts and again market makers are taking the other side of those trades let's just go back and take a look at the s and p 500 one more time in rj that let me take a look at your question after after the webinar i need to wrap it up so i'll i'll take a look at your question and and see if i can answer that um and truman says your class always go by goes by fast uh i think that's a good thing well i i guess i i guess so if it if it's interesting all right i'm going to wrap it up uh that's my time is up and i want to thank you for watching thanks for your questions and comments and i will see you tomorrow thanks again bye