 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 involve 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 at Discord is Doug P. And especially for those of you watching in YouTube, if you have questions after the webinar, this is the best way to get in touch with me. There's also the option stash Doug Chat channel in Bookmap Discord. That's a great place to post content, ask questions regarding the content of my presentation as well as the topics of the channel. And then finally, I'm on X, formerly known as Twitter. My name there is at Doug Plus. So this is my contact information. The best way to get in touch with me. The focus of my presentation and the focus of the options stash 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. 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 trading range and volatility for the day, as well as a directional bias. And the second step of my process is execution. And I look at real time order flow and bookmap 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 and an underlying asset and setups can be taken, for example, in the SAP 500 with ES futures spy share spy options, or SPX options. Questions and comments are welcome. And I will be watching both the options stash Doug Chat channel and Discord, as well as the chat and YouTube for your questions and comments. So please feel free to post your questions and comments. My agenda for today, what I want to cover, what I want to talk about economic data events and earnings. Then I'll go through my positional analysis. Then I'll review setups for this morning. And then I'll talk about the live market. And when I get to the live market, if anyone has any stocks they want me to take a look at, please let me know and I'll be glad to do that. All right, so economic data and interesting day to day. So let's start with that. So there were two services PMI numbers that came out one at 945 and then this one at 10am. And the first number that came out at 945 came out less than expected, also less than previous, but greater than 50 indicating expansion. And then this ISM services PMI that came out at 10am was greater than forecast, greater than previous and also above 50. And this was good economic news that led to a very sharp move lower in the indices and everything that I follow. So we'll talk about that in a few minutes. So very sharp reaction after the 10am data. Right. And then that is the I don't think there's really any more significant data out for the remainder of the week. I know there are the last time I looked at a number of Fed speakers speaking Fed members, FOMC members speaking throughout the week. All right, let's start with positional analysis now. This is the S&P 500, ES futures and book map. Before I take a closer look at this chart, I want to take a look at a larger time frame. So let's take a look at SPX. This is a 30 day one hour chart for SPX. This is the August 18th options expiration. Put dominated slightly put dominated very negative gamma and that the rally began then making it all the way up to over 4500 before the SPX consolidated and then now is moving lower. So the negative gamma put vana fueled rally that began on August 18th has looks appears to have come to an end at least for the time being. All right, so let's talk about some levels now. So first of all dash purple lines are showing the lower and upper weekly expected move. This is based on the options market SPX trading below the lower weekly expected move. And then the dash blue lines that one may be hard to see are showing the lower and upper daily expected move SPX also trading below the lower daily expected move. The red dark red horizontal lines are showing spot gamma levels. These are proprietary spot gamma levels noting concentrations of gamma weighted open interest. Spot gamma again this is proprietary they apply their own algorithms to this. I'm going to point out the key daily levels. So first of all there's the put wall at 4300 that's the strike with the largest net negative gamma that can be expected to act as support. And the next level up is the volatility trigger at 4475 that is spot gammas 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 on the other hand above that level. Market makers position on the gamma curve is positive in a positive gamma environment like the last last week or so. Market makers have to trade against price to hedge their delta exposure in a positive gamma environment. So now it looks like SPX is trading below that volatility trigger. It was just slightly positive today. SPX gamma notional at 14.8. We'll take a look at that in just a moment. Slightly positive for SPX and for spy pretty significantly negative. So for spy a shift once again we'll take a look at this from positive yesterday slightly positive to negative today. And then the next level up is 4500. That is the absolute gamma strike. That's the strike with largest absolute positive and negative gamma. And then finally the call wallet 4600. That's the strike with the largest net positive gamma that can be expected to act as resistance. All right. There were there was one for SPX one shift in level the 4475 volatility trigger that did shift lower. So 4495 yesterday. Now the volatility trigger is at 4475. And again SPX is trading below that level. And we can see that on this chart. Oops. This is SPX in a one day chart. This shows SPX trading below the lower daily expected move dash blue line right on top of the volatility trigger zero gamma level and lower weekly expected move. All right. Let's take a look at book map down in book map. I have my own cloud notes. Let me check for questions. All right. Gray asked do the weekly levels change or is it the only only the daily levels that shift the weekly levels do not change during the week. So I update the weekly levels once a week based on the close on Friday. And the daily levels those do change every day. I base those on the close from the previous day. All right. So this is the ES futures in book map. I have my own cloud notes. I have the SPX levels. So there's the 4450 level noted as support in the spot gamma AM founders note. There's the 4470 zero gamma level and the 4475 volatility trigger. I also have spy levels. So there's the 448 zero gamma level. And then also the 445 put wall. And this is the reaction to the 10 a.m. data a reversal lower at the spy 448 level and all the way down below the 445 put wall. Note there is a difference in price between ES and SPX. And the last time I checked this warning it was five points. And it's about that about the same now. So ES minus SPX equals five. So I'm showing the 4450 level for example here at ES 4455. And that changes a little bit every day. It gets smaller and smaller as the contract expiration approaches. And then after expiration it will widen out again and then continue to trend towards zero. All right. So negative very negative reaction to the 10 a.m. data shown here with the arrow sharp drop right at the spy 448 level and then down below the 444 level. And now it looks like prices chopping around the 445 put wall level for spy. There were shifts and levels. So the put wall actually shifted higher today to from 440 to 445. The call wall also shifted higher from 452 to 455. So bullish shifts higher in both the put wall and call wall for for spy. We'll take a look at setups in a few minutes. I'm just pointing out the levels that are in play for today. Both the spy and SPX levels. The reason I look at these levels is that these are the levels the key gamma levels where market makers are expected to react to changes in gamma and they're hedging. Right. Let's take a look at NASDAQ. All right. NASDAQ. I'm going to take a look at QQQ. Let's just isolate the QQQ levels first. So 377 is the volatility trigger for QQQ and price broke below that level. Right as the 10 a.m. data came out that was good for a fast two point drop down to the 375 level which is the absolute gamma strike. And now it looks like QQQ found support around the 373 level. Right. Shifts and levels for QQQ. There were none. So all the key daily levels remain the same as yesterday for QQQ. And just for completeness. Let's take a look at NDX. NDX the levels in play. Here's the 15,500 level. NDX trading below that level. That is the absolute gamma strike. Then here's the put wall down at 175. There's a combo level just above that. So for QQQ there were no shifts and levels and for NDX the volatility trigger did shift lower. Let's go back to book map now. Look at NQ futures. So here's the bright below QQQ 377 volatility trigger and also NQ 500 and down to the QQQ 373 level. All right. So again I have my own cloud notes and I have QQQ levels. NDX levels there again we saw in the NDX chart. No NDX levels in play and also the big round numbers for NQ. The zeros in the fives or the zeros in the fifties. And we'll talk about again we'll talk about setups in a few minutes. All right. The next thing I look at in my planning process is gamma notional. This is market makers position on the gamma curve at the beginning of the day. I look at the numbers for SPX, SPY, NDX and QQQ. Although NDX is typically not very significant. Note that SPX started the day just slightly positive more neutral and then SPY was pretty negative here at minus 793 and that both those numbers shifted lower from yesterday. Both were positive yesterday. So gamma notional yesterday for SPX was 313 now down to 14.8 and then also for SPY gamma notional was positive 113 and now minus 793. This is market makers position on the gamma curve at the beginning of the day and then these numbers are essentially neutral for the NASDAQ. All right let's take a look at the VANA model now and we can see a graphical illustration of what exactly this means. So this is SPY. I'm going to look at SPY today. The VANA model. What this chart is showing is market makers delta notional on the vertical axis, price on the horizontal axis. There are two curves on this chart. The first the light gray curve is showing 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 and that change in delta with a change in applied volatility is the VANA effect. VANA is a second order Greek. So what this chart is showing is remember SPY reverse lower right around 448 today. So let's locate that on this chart. So here's 448. So what this is showing is from this level the price increased and implied volatility would most likely drop. There would be a slight put VANA tailwind meaning traders market make traders still are long puts. We know from a negative gamma environment that traders are long puts. Market makers are short puts and as price increases implied volatility drops market makers can buy back their short futures. On the other hand, if price decreases like it did today down to around 444 right here, market makers delta notional will increase. This line is rising, implied volatility is increasing, price is dropping, market makers delta notional is increasing and they have to sell futures to hedge their delta exposure. So that was what was helping to drive this move lower today is the VANA model. VANA works both ways. So this is typical of a negative gamma environment. So this is showing how market makers are trading with price as price drops or with price as price increases and implied volatility changes. All right, so that's the VANA model. We've taken a look at gamma notional. We know that market makers position on the gamma curve at the beginning of the day especially for spy was negative and they would have to sell futures as price drops to hedge their delta exposure. All right, let's take a look at some setups now. I'm going to start with the S&P 500. This chart is showing the hero signal, hedging impact, real-time options, hero, H-I-R-O. This is from Spot Gamma. It's available to Spot Gamma subscribers. The chart is showing price with a white line for SPX and the hero signal. This is hedging impact, real-time options showing options trades and market maker hedging activity for a combined signal for SPX, spy, XSP, and ES futures. So if you trade any form of the S&P 500, this is generally the signal that you want to take a look at. Spot Gamma does provide separate signals for all of these instruments. I like to look at the combined signal. Let's zoom in on this so we can see what options traders were doing this morning. I'm going to zoom in just to the, right around the open. So remember data came out at 9.45 and 10 a.m. right there. So what this is showing is right after the 9.45 a.m. data, traders started taking negative delta positions. Hello, Holy Trinity. Glad you're here. Welcome. You're welcome for the information. Hope this helps. All right. So the data release is shown 9.45, 10 a.m. After the 9.45 a.m., traders started taking negative delta positions. And that led to a great short set up. Note that the options traders, options traders started taking positive delta positions right after the data. This is somewhat like yesterday where that mean reverting options trades was great in a range day environment where they were buying the dips and selling the rips. This didn't work today. Well, as we zoom out, we'll see that they gave up. So price did stabilize somewhat as options traders started taking, oops, wrong tool, options traders started taking positive delta positions, fading that move lower and then price started to move lower again as they decided to join the party lower. So price actually started to move lower first in this case. So this was really a head fake, trying to do what they were doing yesterday and it didn't work. All right. So let's go take a look at book, Pam. I'm going to zoom in, adjust the chart so we can see the first three hours. So we know around 9.45 a.m. traders started taking negative delta positions. Then here, again, here, this was the reaction at the 10 a.m. data release, a sharp move lower. Options traders already starting to take negative delta positions. Just after the release, they started taking positive delta positions. Price consolidated, but order flow really never confirmed any kind of move higher. So notice that this yellow line here showing stop orders, there were no by-stop orders helping to fuel the move higher. This line continues to move lower. Also, large traders continued selling with iceberg orders that shown by the light blue line. So the best that options traders could do right around 10 a.m. was to consolidate the price. And I'm looking at NASDAQ, not ES. I'm sorry about that. Let's go to ES. It's going to be a very similar chart. So again, we'll go to the first three hours. All right. So a little bit different here. NASDAQ, large traders were selling with iceberg orders. And in the case of the S&B 500, right around this consolidation, as options traders were taking positive delta positions, that was really just a pullback to continue a short. Also, never really confirmed by order flow. No by-stop orders fueling move higher. Also cumulative volume delta remained negative. It's shown by the pink line, cumulative volume delta, and the yellow line stop orders. So there were some large traders buying, but that did not have much of an impact on the S&B 500 with the stop orders and cumulative volume delta both both negative. Let's go back and take a look at Hero. And we know around 10, oh, 1025 options traders reversed their position and started taking negative delta positions. Let's go back to book map and price reverses lower at this cluster of levels. So remember price move first here. You can see the shift in order flow. Aggressive buyers shown with the green volume dots and aggressive sellers come in right at the lower weekly expected move and the 44.75 level and move price much lower. Down to the 445 put wall and below. All right, so that was the setup for today, just responding to the data at 10.45, not at 10 a.m. and also right around 10.20 with the shift in order flow at the lower weekly expected move and then options traders started to join the party just a few minutes later. All right, so it looks like the support at the 44.50 ES 44.50 and the spy 44.44 level so far as holding. Let's go take a look at NASDAQ, so I've already covered NASDAQ. Pretty similar pattern, reversal, sharp reversal lower at the 500 level on the QQQ 377 level, consolidation and then price move lower. And in the case of NASDAQ, large trader selling with iceberg orders, sell-stop orders never picked up and confirmed to move higher. A little bit more of a shift, positive shift in cumulative volume delta, but that turned over. All right, let's take a look at, go back to hero now. So we'll take a look at the correct hero for NASDAQ. So this is a combined signal for NDX and QQQ and this was a much more clear signal for NASDAQ. Nice divergence short. So here's the, let me zoom in just a little bit more, point out the data, 945, 10 a.m. So right after 945 a.m. the data release, options traders start taking negative delta positions and that's set up a great short. So you could have entered right here and been prepared for the 10 a.m. data. Let's zoom out. All right, so that was the the most clear setup for the NASDAQ. Nice divergent short. Let's take a look at one other thing. Let's go to QQQ. I'm going to zoom in on QQQ. All right, Carl and Holy Trinity, thank you very much for your support. I really appreciate it. Yeah, thumbs up, that really helps, helps me, helps the channel. All right, thanks, thanks again for your support. All right, so what I want to point out here is this flow alert. Very timely alert came during this quick drop for QQQ. This is something that's new. It's in beta and I'm on the list, the beta group. So I'm testing this out, really like these alerts. There are quite a few of them. You have to keep an eye out for the instruments that you want to trade, but a very timely alert right at 10 a.m. for a move lower in QQQ or NASDAQ. So that was another, another clue and you can see that again it was a very timely alert for a move lower. So a divergent short as well as the QQQ alert. Again, divergent short alert. Great short set up. All right, so that's NASDAQ. Let me check for questions. All right, Holy Trinity, thank you very much for your kind words. You're very welcome. Again, thank you very much. All right, NASDAQ, NES. Very data dependent. Good news is bad news. And in the case of NASDAQ here, this move lower was preceded by options traders. Let's just see what they were doing. Actually, let's go back to the combined signal. So they were buying puts that's shown by the following blue line there. We'll just zoom in here and see what that looked like. So in the, at the point where this data released, the big drop came 10 a.m., this orange line showing calls was pretty flat. So traders were buying calls, but they were buying puts more aggressively. So the following blue line is showing traders were buying puts notion by negative 301 million. They were buying calls 190.6 positive. So they were buying calls buying puts put buyers more aggressive and they were on the right side of the trade. All right, let's take a look at some stocks. And what I have done here is I have my watch list down below the hero signal and I have ranked these by hero signal from weakest to strongest and we'll look at these four or five stocks and what this is showing, this is comparing the hero signal for today that's shown by the dot there with the hero signal for the last 30 days that's shown by the entire length of that's that slider and then the last five days that's shown by the colored portion. So what this is showing for, especially for Netflix, Tesla and Apple, the hero signal is the weakest that it has been in the last five days and the last 30 days. So this is very bearish indicator for these stocks. So we'll start with Netflix. I'm just going to look at the hero signal for Netflix. I don't have it in book map 450 is the call wall, the key gamma strike price did reverse at that level. There was also a flow alert took a little while to play out. The thing when you see that flow alert thing to do was look for a reversal point, especially if our stock is volatile as Netflix and the natural reversal point would be that 450 call wall. So just wait you see the slightly falling hero signal initially, the flow alert week for a reversal point and there you go a short setup in Netflix either selling stock or buying a put buying a put spread. However, you wanted to play that. Right. So that's Netflix. The next is Tesla. Summon again. And this morning hero was a strong driver price action. So options trades, market maker hedging activity, very strong driver, very high correlation between price action and options trades and hedging flow. Here's a hero signal that comes in. This actually was before the 10 a.m. data. So note that Tesla was weak from the open even before the data release. Let's see what traders were doing. So they were buying puts and selling calls. Both these numbers are negative negative notional value. So they're buying puts the orange line negative. So they're selling calls. Market makers take the other side of those positions. So they have to sell Tesla stock to hedge their delta exposure when traders are taking negative delta positions. Let's go take a look at book, ma'am. Go to Tesla. Very sharp move lower at the open and note the strong shift in order flow right after the 9 45 a.m. data. A lot of aggressive sellers come in right around the 252 level. Here's the 10 a.m. data. There was a little bit of consolidation and then price broke lower again as aggressive sellers came in and took Tesla down to the 246 level. Let's go back and take a look at hero. So the alert came in. Let's just check the time here. The alert came in around 9 48. So that was right around here. So after a pretty sharp move lower, so the alert was still a good alert, but a little bit late for for Tesla. Right. The next is Nvidia. Let's go take a look at hero. Go to Nvidia. Actually Apple that's next on the list. We'll take a look at that. So this the order of this list changed a little bit since I was preparing this morning. Very bearish options trades, hedging flow and Apple. Hero alert and Apple right at right around the same time as Tesla 9 48. Let's see what in this note. This was from the open before the 9 45 and 10 a.m. data. So traders were initially selling calls and they stopped selling calls, started buying calls and that really has leveled off since then, but they have continued to buy puts and that still continues now. So they've been buying puts all day and the notional value for calls is also negative. So they net for the day selling calls and buying puts put buyers more aggressive. Remember the alert comes in at 9 48. So let's go to Apple. We'll give back to Nvidia next. I just want to go down the list in order. So here's Apple. The alert comes in right around 9 48 very timely alert as traders were taking negative delta positions. They were buying puts selling calls and Apple was moving lower below VWAP. Great short set up here in Apple and Apple continues lower. Let's go back to hero note the the gamma strike. So 190 is the key gamma strike. 185 the key delta strike and then 182 is the hedge wall. So that would be the the natural target the one actually 182 50 hedge wall. Let's go back to book map. Check that. So price is right at that level 182 50. There is some liquidity at that level. The heat map is showing a history of the limit order. So those are limit buy orders and also more limit buy orders at 182. So the gamma level target 182 50 and then the liquidity target at 182 as Apple continues lower. Let's go back to hero and options traders continue to take negative delta positions. So they're still buying puts. All right now let's go to Nvidia and traders have been taking negative delta positions all day. Although that activity that has leveled off but net for the day they are they have been buying puts put buyers driving price much more aggressive than call sellers but they're selling calls and buying puts put number 398 million 399 million negative and also call sellers minus 47 million. And note the very timely alert here. So just looking at at this at initially looked a little bit late and you know maybe it was but there you know certainly there was a if you were watching hero hedging flow in in Nvidia you you know you probably already found a way to get short. If not this alert brought your attention to Nvidia right around right at 10 a.m. And again just like the other stocks price action hero flow negative before the data release hero alert comes out at 10 a.m. And let's go to book map now go to Nvidia down the volume dots just a little bit assume in all right so if you if Nvidia did not already have your attention that alert came in right right around 10 a.m. and still there was plenty of opportunity for a short if you were fast it was moving very fast you know from right before 10 a.m. 478 down to 470 so even if you caught a portion of that move lower if you weren't already short that would have been a been an okay entry for a short right very bullish bearish order flow I'm sorry you can just see all the aggressive sellers in here right at the 480 level let's go back to hero now all right so it looks like options traders have taken their foot off the gas hero has leveled off price consolidating back to book map so looking at the big picture price maybe trying to move higher but options traders not really strongly supporting that after that sharp move lower and note that 465 is the put wall level expected to act to support 470 250 is the hedge wall so it looks like Nvidia is trading just below that level and the dot did not make it down to the put wall at at 465 all right that's Nvidia does anybody have any stocks they want me to take a look at otherwise we'll go back and take a look at the SMB 500 and NASDAQ all right let's take a look at this reversal higher so it looks like there was a stop run that's shown by the red dots there down to around the spy 444 444 level also the 4450 level es 4450 level you can see the shift in order flow mostly aggressive sellers shown by the pink volume dots and then aggressive buyers start to come in and then as price starts to move higher large traders start buying with iceberg orders that shown by the light blue line that's an execution 2,683 contracts five different executions helping to move price higher and that was right at one o'clock just after one o'clock let's go take a look at hero and see what options traders were doing so let's go back to SP 500 so note the strong correlation between options trades hedging flow and price action it looks like the dip buyers came in just right after one o'clock taking positive delta positions and price started to move higher as aggressive buyers we just saw aggressive buyers came in and then the price and then the move lower higher was also supported by iceberg orders large traders buying with iceberg orders all right call at carl jones asked what does the put wall and call wall tell us the put wall is the strike with the largest net negative gamma that can be expected to act as support it normally does and the call wall is the strike with the largest positive net positive gamma that can be expected to act as resistance it normally does especially for the indexes so spot gamma does have stats that show a negative forward one day and five day return for a breach of the call wall and a positive forward one day and five day return for a breach of the put wall so i would suggest going to spot gamma.com go to the free resources and you can do further research there all right so holy trinity wants me to take a look at spy i can do that so that is one of the components of the sub 500 signal so we'll take a look at spy so spy is showing this sharp reversal higher in the hero signal very close correlation with price now back above the put wall and you're welcome carl all right so abu asked about nq so let's take a look he says there was an alert on qqq around 2 p.m so let's take a look at qqq all right no so not sure how to interpret this it looks like it was from the the move lower in um and hero same for this alert right here let's go take a look at book map we'll take a look at nq right so for nq you can see the shift in order flow aggressive sellers moving price down aggressive buyers come in at the 373 level and now aggressive buyers are trying to move price higher as we saw from hero not getting much support from options traders but note this sharp rise in the kiln led to volume delta shown with the pink to dark blue line as cvd changes from negative to positive consolidation around the 353 level in between the 350 level nq and the qqq 374 level let's go back and take a look at hero so remember right now we're looking at qqq let's take a look at the total signal for nasdaq so pretty similar starting to move higher so we zoom in we see a stronger correlation hero levels level saw prices consolidating now it looks like traders may be taking positive delta positions we can zoom in and take a look at a a shorter look back period rolling window period so we're looking at the cumulative data for the entire day since the cash open let's take a look at just the last 30 minutes of data and that doesn't really help just showing more more of a difference here so maybe maybe now this little move in hero here is going to help to move price higher as options traders start taking positive delta positions try and break nasdaq out of this consolidation let's go back to the one day check for alerts so there's the qqq alert that abu was talking about 203 let's take a look at smb 500 so options traders are really a lot more aggressive here with the smb 500 very strong correlation between hedging flow and price action helping to drive that reversal higher right after 1 p.m let's go to book map take a look at the sp 500 we'll wrap it up right so we know that just after 1 p.m options traders started taking positive delta positions aggressive buyers started to come in large traders with iceberg orders and so far prices up about 20 points from 49 to 69 and back above the spy 445 put wall 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