 Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern Time. Before I get started, I need to go through the disclosures. General disclosure, all bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. First disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. Here's my contact information. The best way to get in touch with me is through Discord. My name on Discord is Doug P. Also on Bookmap Discord, there's an options-doug chat channel that is a great place to post questions, comments, and content related to the topics of my presentation and the topics of the channel which I'll go through in just a moment. And I'm also on X, formerly known as Twitter. My name there is at Doug Plus. The focus of my presentation today and the focus of the options-doug-chat channel is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. Have a two-step process for trading and the first is positional analysis. I look at how traders and market makers are positioned to the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as the directional bias. And the second step in my process is execution. I look at real-time order flow in Bookmap and real-time market maker hedging flow in SpotGamaHero to confirm my thesis and for setups for entries and exits. And when I talk about setups today, I will be talking about setups in an underlying asset and those setups can be taken any number of ways. For example, the SAP 500 setups can be taken with ES futures, SPY shares, SPY options, SPX options, or even ES options. Questions and comments are welcome and I will be watching both the options-doug-chat channel in Discord as well as the chat in YouTube for your questions and comments. And just a couple of quick housekeeping tips. First of all, Bookmap Discord is free and available to everyone whether you are a Bookmap subscriber or not. There's a lot of great content there, both my channel of course and many other channels. And then also for those of you who are watching on YouTube, I am streaming at 1080p. So if you have any issues with screen resolution, you can go into the settings for your stream and set it to 1080p. Alright, here's my agenda for today, Thursday, October 26th. First of all, I'm going to go over news items for today and for the rest of the week. That would be economic data, events, and earnings. Then I'll go through my positional analysis, then I'll review some setups from this morning and then we'll take a look at 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 take a look at those stocks. Alright, let's start with news items for today. So first of all, we'll go over economic data. So there were several items released this morning. First of all, durable goods at 8.30 a.m. eastern time. That came out better than expected, better than forecast. Also GDP came out also better than expected and better than previous. And then finally, this core PCE came out lower than forecast and lower than previous. So I guess from an economic point of view, all those items were good, inflation coming down slightly in GDP and durable goods orders increasing. Alright, the market initially interpreted that data as positive. This is 8.30 a.m. eastern time, the reaction to the data bullish. I want to talk more about this in a few minutes. Then after the cash open, traders had another opinion of the data and the S&P 500 has been moving down since then. Alright, so that was the economic data this morning. Also Meta did report earnings after the close yesterday. We'll take a look at Meta when I get to the setup review. So Meta, the earnings apparently were much better than expected or better than expected. But in this bearish market, Meta is not doing too well, at least the last time I looked. Alright, so then the last upcoming economic data and earnings events, Amazon reports after the market closes, I'll look at Amazon as well and we'll see how options traders are positioning themselves in the market before the earnings this afternoon. And then finally Friday wraps up the week with the 8.30 a.m. PCE data. Alright, just a note about next week. The FOMC meeting and announcement is on Wednesday, concludes at Wednesday with the announcement at 2 p.m. and then the press conference at 2.30 p.m. So Spont Gamma is really looking for kind of a, maybe a chain tone change after the FOMC meeting. Alright, so Truman says Meta blew earnings out of the water, a perfect time for it to drop like a rock overnight. So currently it depends on a current market sentiment and right now traders don't have any interest in owning large cap tech stocks apparently. So you know that's the current market environment. Alright, so they like Microsoft earnings also but it was, Microsoft is kind of joining the party to the downside. Alright, so that is the economic data and earnings events coming up. Alright, let's talk about positional analysis now. I'm going to start with the ESB 500. This is the ES Futures and Bookmap. And before I take a closer look at this chart, I want to take a look at a larger time frame. I'm going to go to a 30 day one hour chart and point out the turning points. And this is the 915, September 15th options expiration call dominated. Those calls that were stabilizing the market expired and the downtrend began and reversed higher. October 6th jobs report gamma squeeze found resistance as treasury yields started to move higher and Hamas invaded Israel. And then the downtrend look like it might reverse higher with the October expiration that was last Friday the 20th in a very negative gamma put dominated expiration that only lasted for a couple days and now the downtrend continues. Alright, so those are the key turning points and potential turning points. And so far the expected put Vanna rally after the again the October expiration negative gamma put dominated did not really take place and the I guess the macro economic data and events are just too much. Alright, let's take a look some levels on this chart. First of all, the dash purple lines are showing the lower and upper weekly expected move. That is updated once a week and SPX is trading below that level now. Alright, the so that's the dash purple lines the weekly expected move the dash blue lines are showing the lower and upper daily expected move that changes every day that's based on the options market both are based on the options market and note that SPX is also trading below the lower daily expected move. Alright, let me point out the spot gamma levels on this chart. These are proprietary spot gamma levels gamma weighted open interest proprietary to spot gamma available to spot gamma subscribers. Let me point out the key daily levels. First of all, 4000. That is the absolute gamma strike. That's a strike with the largest absolute negative and positive gamma. That level has been oscillating between 4,000 and 4,300. So yesterday it moved up to 4,300 and now is back down to 4,000. So that's the absolute gamma strike. That's where most of the gamma weighted open interest is concentrated at this time. Then the next level is the put wall at 4,200. That's a strike with the largest net negative gamma that can be expected to act as support and SPX is trading well below that level now and know that level did hold from yesterday. So 4,200 does remain the put wall. Then above that is 4,300. That's the volatility trigger that a spot gamma is proprietary gamma flip level below that level market makers position on the gamma curve is negative in a negative gamma environment. Market makers have to trade with price to hedge their delta exposure and that tends to enhance or increase volatility. And note that the SPX but the SMB500 and NASDAQ are in a very and also the Russell 2000 are in a very negative gamma environment and that can lead to very large moves, sudden moves, large downtrends. It's not necessarily a directional bias but definitely a volatility indicator of to expect high volatility, wide trading ranges. And then finally the call wall way up at 4,500. That's a strike with the largest net positive gamma that can be expected to act as resistance. That level did move up from yesterday. And it moved up from 4,400 yesterday, let me check that, 4,400 yesterday to 4,500. So quite a range there between the absolute gamma strike at 4,000 and the call wall at 4,500. So for SPX the shifts at levels, call wall shifted higher, absolute gamma strike shifted lower. All right, let's take a look at a shorter timeframe SPX chart just to see the levels that are in play for today. So here's SPX, I'm showing a couple of days worth of data showing the downtrend that began yesterday and this is the upper daily expected move for today, not yesterday. So this downtrend began and this was a 42-22 was a noted as a support level and the SPOT gamma AM founders noted yesterday and it acted as resistance. So that was yesterday, the downtrend continues now below the lower daily expected move showing the dash blue line and also this lower weekly expected move that appears to be acting as resistance now. So we'll watch and see if SPX can make it up above that level. And that's also a combo L3 level right there at 4149 that combines SPX and SPY gamma weighted open interest into one combined level shown in terms of SPX price. And now here's the put wall up above at 4,200. So SPX has been above it, below its put wall all day today. All right, this is the ES futures in book map. I have my own cloud notes so I can show SPX levels. Here's the 4150 support level and that 4149 combo level just below that. I also have SPY levels on this chart. So here's the 415 level, large gamma 2 level. And note for SPY, the put wall did shift lower. It's down at 410. So I have SPX levels, SPY levels, and then also the lower daily and weekly expected moves for ES a little bit different than the SPX. And then also the round numbers, 50 and zeros for ES. And note that the ES 4,200 did act as resistance this morning. All right, note there is a difference between the price of ES and SPX. That changes a little bit every day. This morning I was using 21 and it looks like right now it may be closer to 20. So ES minus SPX gets a little bit smaller every day until the contract roll over then it changes. So right now I'm using 21 but it may be closer to 20 right now. All right, so those are the levels in play for the ESP500 today. We'll take a look at setups in a few minutes. So mainly this SPY 417 level and also the ES4200 level acting as resistance and then support really yet to be determined for the day potentially at 4150 and SPY 412. So we'll keep an eye on that. All right, let's take a look at NASDAQ now. Let's go to NASDAQ and again we'll take a look at setups in a few minutes so to see how these levels could have been used in setups. All right, this is NASDAQ and QFutures and BookMam and pretty similar chart to the ESP500 reversal just around the cash open. And that was it. This combo level up here as well as QQQ 350 is the put wall, the absolute gamma strike for QQQ. Let's go take a look at that. We'll take a look at the QQQ chart so we can isolate the levels for QQQ. Here's that 350 level that's the put wall and absolute gamma strike and note the absolute gamma strike for QQQ did shift lower from yesterday. So now down at 350 and again also the put wall so QQQ trading well below its put wall and there also is a combo level there that combines NDX and QQQ gamma weighted open interest into one combined level in this chart shown in terms of QQQ price and we'll take a look at an NDX chart and here it is in terms of an NDX price that combo L1 level, one being the most important and I'm showing multiple days of data here to show this downtrend that began yesterday. It appears that the market was not happy with Google earnings and now they're punishing all of the large cap tech stocks. So NDX trading below its volatility trigger and call wall. So for NDX there were no shifts in levels QQQ the volatility trigger and absolute gamma strike shifted lower. Let's go back to book map in Q futures. So again I have my own cloud notes so I can show NDX levels and there is a QQQ level there as well the 350 level that enacted as resistance just after the cash open. Alright so that's the main level in play and in Q trading below its lower daily and weekly expected move today and here's the 14,000 put wall that's the NDX 14,000 put wall down there below. So those again we'll take a look at setups in a few minutes. So those are the levels in play for the NASDAQ today. Alright let's take a look at gamma notional to see how market makers were positioned in the options market at the beginning of the day. This is gamma notional market makers position on the gamma curve and actually I'm going to take a look. I've started looking at Russell as well the Russell 2000. So we'll take a look at the S&P 500 NASDAQ and Russell 2000. So we'll see that IWM does have significant negative gamma. Alright so let's take a look at first of all SPX, SPY, we'll ignore NDX it's not significant, QQQ, RUT and IWM all very negative and note these numbers did all shift lower from yesterday after the drop yesterday so what this means is traders are long puts, market makers are short puts and market makers have to trade with a price to hedge their delta exposure. So let's see how that works with the VANA model. This is the SPX VANA model what this chart is showing is delta notional on the vertical axis price on the horizontal axis there are two curves on this chart. The light gray curve shows how market makers delta notional changes with changes in price only and 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 implied volatility is the VANA effect. VANA is a second order Greek remember market makers always want to remain delta neutral so this is showing how they may have to hedge with changes in price and implied volatility. So let's see where SPX is trading now so right around 41, 42, 43 so that's way up on this gamma curve here so what this is showing as price has been dropping today market makers delta notional will increase and when delta notional increases traders are buying SPX by puts market makers are selling the puts and they have to and also just price is moving lower the puts that they're already short are gaining in delta and they have to sell futures to hedge their delta exposure. Back to 41, 43 on the other hand if price starts to increase price is increasing implied volatility drops market makers can buy back their short futures that's a put VANA rally so this works both ways but again this this is this curve is very typical of a very negative gamma environment indicating market makers will have to trade pretty aggressively with price up and down always important to know to anticipate what kind of movement may be in the market you know may be in store for the market during the day something that I look at every day all right the next let's take a look at spy take a look at the VANA model for spy spy currently trading right around 413 right up here on the gamma curve as well so as price has been dropping today market makers have had to sell futures to hedge their delta exposure and if price starts to increase implied volatility drops they can buy back their short futures to look QQQ 344 very high up on this gamma curve here finally IWM and IWM trading right around 164 slightly higher on the day so so far IWM is slightly positive for the day all right so that's the VANA model very negative gamma all these curves typical of again a very negative gamma environment market makers having to trade aggressively with price to hedge their delta exposure all right so my thesis for the day was first of all for higher volatility and the shifts and levels for the SP500 was mixed call walls moving higher SPX absolute gamma strike moving lower as well as the put wall for spy kind of mixed so slightly bearish for the SP500 and then for QQQ absolute gamma strikes and the volatility trigger shifted lower for QQQ so really the key for today and I guess up until at least the FOMC meeting next week is to watch first of all VIX or VX futures whichever you prefer also wants 10 year yield which is actually dropping today so it's down about 2% today down right now to 4.84 not seeming to make much of a difference today so watching watching volatility 10 year and also we'll take a look in just a moment the hero signal for the Magnificent 7 this is a new a new signal from spot gamma combining all of the stocks and then Magnificent 7 into an indicator that appears to be a very good leading indicator and when we get to the setups for the NASDAQ we'll take a look at the look at the hero indicator for Magnificent 7 which is actually seems to be a better indicator than the hero for NASDAQ all right so speaking of hero let's get to that now so let's take a look at some setups I'm going to start with the SP500 this is the hero signal hedging impact real-time options so everything that we've looked at in spot gamma so far of course book map is real-time but everything that we've looked at in spot gamma is static data that I use in my planning process and then this is part of my execution the real-time looking at this hero signal again hero is hedging impact real-time options so what this chart is showing is price for SPX and the hero signal showing options trades a market maker hedging activity for a combined signal for SPX spy XSP and ES futures all into one combined signal and note this hero signal after about 10 a.m. has been choppy but steadily increasing and this number the notional value for today is positive 2.5 billion all right let's zoom in on this chart so there were several setups looking at this first of all right around 945 a short just following the options traders and then along then a short again keeping in mind when traders are buying and selling calls and puts SPX spy XSP ES market makers are taking the other side and they're buying and selling futures to hedge their delta exposure so this has been a very good indicator a directional indicator for for price let's go take a look at a book map so we have a initial short then along some are between 10 1045 and then a short shortly after that somewhere between 1045 and 11 and just before we do that let's see what traders are doing today in terms of puts and calls so this is very typical of an index traders buying calls that shown by the rising orange line they've been party buying calls pretty much since 10 a.m. sorry about that nothing I did just an issue with hero so they've been buying calls and they've also been buying puts so call buyers are more aggressive note the notional value there is higher 2.66 billion positive versus minus 819 million let's make sure we're all the way out and one thing to note here traders have continued to buy calls they started kind of leveled off during launch here then started buying calls again somewhere around 1215 1230 and now it appears that they are selling puts so for right now the put and call line are going in the same direction and spot gamma has noted that's a very bullish signal when both the put and call line are going in the same direction so let's review the setups from this morning and then we'll take a look at what's going on right now back to book map take a quick look at the setups this morning so here's the let's go back to the SP 500 again the reaction after the data this morning all data all good and then the at the cash open around 945 the aggressive sellers started to come in these are volume dots showing market buy orders green dots show more buy than sell orders and magenta dots are just the opposite more sellers than buyers and the aggressive sellers come in as options traders were taking negative delta positions move price lower price consolidates then just after 1030 the aggressive buyers come in and remember that options traders started taking positive delta positions right at around 10 a.m. or so and then finally there's this final sort of washout final move lower stop runs to the downside shown by that red dot there sell stop orders and aggressive buyers come in move price pretty quickly up to the 4200 level and then the aggressive sellers start to come in again alright so those are the warning setups long short or short long short if you're looking after the at the cash open short long short confirmed by order flow and book map as well as hedging flow with spot gamma hero right right now we know that traders are last time we looked at the hero buying calls and selling puts that's a very bullish signal and right around this 4150 level aggressive buyers started to come in again and for this to really move higher you know it would take it at some point looks like it would need you would need stop orders to help the fuel to move higher more significant buy stop orders than that as well as maybe some large traders buying with iceberg orders to help to fuel that move higher zoom in just a bit and the order book here is showing history of resting orders in the order book sell orders there right around 4165 as well as large traders with iceberg orders and more limit sell orders in the order book right around 4170 and that's the 4149 C3 level for SBX alright so we'll see if the aggressive buyers as well as the options traders can push it above that liquidity in those levels alright let's take a look at NASDAQ now alright so very similar pattern to SB 500 aggressive buyers up to the cash open show my the green volume dots in the aggressive sellers come in very clear resistance at the QQQ 350 level as well as this 367 combo one level and then aggressive sellers start to come in also sell stop orders fueling the move lower large traders fighting with iceberg orders so sell stop orders fueling the move lower and large traders with iceberg orders as shown by the blue line light blue line taking the other side and buying weakness so there's a short that along then a short again just like the SB 500 all right let's go take a look at hero and see what options traders are doing alright so first I'm going to look at the NASDAQ signal this is a combined signal for NDX and QQQ and this has been pretty this has been bullish traders taking positive Delta positions all day long let's take a look at this new magnet mag 7 magnificent 7 which has been really more closely correlated to price for the NASDAQ since these seven stocks shown here Apple Amazon Google Meta Microsoft and NVIDIA and Tesla make up a large component of the NASDAQ as well as the SB 500 but a larger component of the NASDAQ and for a large part these stocks often drive dry price so this hero signal for the magnificent 7 here's the short long short again and now starting around 1 o'clock looks like the dip buyers are coming in in the magnificent 7 taking positive Delta positions let's see what they're doing so they started buying calls more aggressively right around 12 30 shown by the rising orange line then around 1 o'clock they started selling puts so in this case we have again the put and call line rising moving in the same same direction traders buying calls and selling puts very powerful signal in this in this case bullish let's go take a look at NASDAQ another potential double bottom here well let's take a look at some stocks and what I did this morning let's go back to hero so with a market weakness I ranked my watch list by hero signal from weakest to strongest so what this is showing it compares this heat excuse me compares the hero signal for today that's shown by the dot with the last 30 days that's shown by the entire length of the slider as well as the last five days that's shown by the color portion so this is showing Microsoft the hero signal is the weakest that it has been in the last five days in the last 30 days it is on the lower end of the slider so we'll take a look at Microsoft first and traders have been taking negative Delta positions for most of the day here's the 340 key gamma strike oops wrong tool that act as resistance this morning all right let's go take a look at Microsoft and book map and wavy yeah I'll get to Nvidia got a couple of other stocks I want to take a look at so let's go to book map go to Microsoft all right Microsoft there's the 340 key gamma strike price opened just above that excuse me note the very negative opening print shown by the large magenta dot as traders were taking negative Delta positions let me tone that down just a little bit price move lower all the way down to 327 now may be consolidating as traders are starting to buy calls and sell puts in the magnificent seven right so that's Microsoft let's take a look at let's go back to the list the list the order of the list has changed a little bit so the next on the list that I want to take a look at is Netflix let's zoom in just a bit all right so Netflix in the morning definitely bearish traders taking negative Delta positions let's go take a look at book map and so far up until today Netflix seems to have resisted this move lower maybe a succumbing today there's Netflix let's go back and check for gamma levels all right 420 the call wall up above and then 410 is the put wall the hedge wall so there's the 410 put wall hedge wall acted as support for a while this morning now Netflix and Netflix move lower it may be heading back up to that level all right let's take a look at at meta now since it reported earnings after the close yesterday Truman says the blue earnings out of the water and unfortunately for meta in a very bearish environment let's see what options traders are doing let's go back to meta and meta the hero signal is kind of in the middle of the range and note the 280 put wall support very nice bounce off the 280 put wall acting doing its job acting as support as expected in just a few minutes after after touching that level options traders start taking positive delta positions all right so that's meta let's just see what traders are doing and it appears to be when I switch to puts and calls that's when that auto zoom happens so both these are positive or actually slightly negative so they have been net selling calls but also selling puts so they're selling premium in meta right so that jump has something to do with changing to puts and calls maybe back all right so the key for meta was the 280 support level all right so support close at that level let's take a look at Amazon since Amazon does report earnings after the close today we'll see how traders and options traders are positioning themselves before earnings kind of a choppy day in Amazon let's go take a look at hero go to Amazon so for the day traders have been taking positive delta positions pretty much all day from the open in Amazon notion of value positive 104 million let's just take a quick look at puts and calls so they're selling puts and buying calls 120 is the key gamma strike let's go back to book map there's the 120 key gamma strike all right let's wavy wants to take a look at Nvidia we can do that choppy day in the video mostly down let's take a look and see what options traders are doing to Nvidia and mostly negative today 420 is the hedgewall acted as resistance traders are selling calls and buying puts both the orange and blue line are negative and it looks like they have taken their foot off the gas right around one right around one o'clock and maybe starting to take positive delta positions now let's go back to book map remember 420 420 is the hedgewall acted as resistance let's go back to book map so Nvidia overshot it a little bit this morning whoops there's 420 acting as resistance looks like I need to have more levels down lower in Nvidia and 400 note the high liquidity at that level so far today acting as support and this is showing limit buy orders in the order book shown by the dark color dark red color thick band a lot of resting limit buy orders that level typically in larger price higher price stocks at the zeros and the fives most typically comes in at the cash open right there 930 note there was some liquidity in the order book before the cash open at 400 so traders wanted to get long at 400 all right any other stocks questions all right let's go take a look let's go back to this magnificent seven so they continue to take net positive delta positions in the magnificent seven let's go take a look at the SP 500 and nasdaq let's go back to book map we'll start with nasdaq so nasdaq may be finding some resistance at the 345 level take a look at ES still it looks like ES has made its way through this liquidity at the 4149 level and may be finding the resistance at the lower day they expected move so we just made it through these bands of liquidity slowly grinding higher let's go back to hero and see what options traders are doing the SP 500 or the combined signal so still net overall moving higher since about 1230 back to book map so some some consolidation at this cluster of levels and maybe moving lower now let's just check let's check volatility and check the 10 year picked futures so maybe moving back higher now could be a bit of a headwind all right let's check let's actually go back to this chart let's chart and check the 10 year treasury yields moving higher lower all day should be a tailwind down almost 2 percent for the day and slowly as Zari says amazon has earnings today maybe some reaction yeah i just talked just talked about amazon we looked at amazon in book map and in hero and traders were taking positive delta positions into earnings this afternoon in amazon and certainly in the current environment i do expect a reaction for amazon like all the other large cap tech stocks take a closer look so it looks like around this level has been kind of a key level for for vix futures today let's go back to book map back to nasdaq so nasdaq needs to overcome the 345 level to move to move higher or buying resistance to that level and move lower and es needs to overcome this cluster of levels with 41 49 on the bottom and the lower daily expected move above let's do a final check of amazon let's take a look at a couple of things for amazon first of all let's take a look at it this earnings chart from spot gamma here's amazon also intel reports today amazon the expected move is 6.85 percent plus or minus 6.85 percent let's go back and see what options traders are doing amazon so continue to take positive delta positions now i'm at amazon appears to be uh struggling at the 120 key gamma strike but traders continue to take positive delta positions let's go back to book map so here's the 120 key gamma strike right so i believe that the only remaining member of the magnificent seven to report earnings is apple maybe somebody can correct me on that i think uh you know of course tesla tesla netflix reported last week you just check so tesla netflix reported last week nvidia has yet to report so apple and nvidia and amazon here it is goker amazon reports after the close today take one last look at the sb 500 still trying to break above those levels all right my time is up i want to thank everyone for watching thank you for your questions and comments remember tomorrow pce data at 8 30 a.m eastern time amazon reports after the close today uh 6.85 percent plus or minus expected move all right we'll talk about it tomorrow thanks again bye