 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, training 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 on Discord is Doug P. Also in Bookmap Discord there's an options-doug-chat channel that's a great place to post questions, comments, and content related to the topics of my presentation and the topics of the channel that I'll go through in just a moment. Excuse me. Note also that Bookmap Discord is free and available to everyone. It's a great community of traders of various experiences trying to help each other become better traders of a wide variety of topics in Bookmap Discord. Stocks, futures, options, a variety of languages. Everyone is welcome. I invite you all to come join us in Bookmap Discord. I'm also on X, formerly an owner's Twitter. My name there is at Doug Pless. The focus of my presentation today and the focus of the options-doug-chat channel is options order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading and the first is planning and I use positional analysis. I look at how traders and market makers are positioned 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 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 focusing on an underlying asset and setups in that asset can be taken any number of ways. For example, the S&E 500 setups can be taken with ES futures, spy shares, spy options, SPX options, or even ES options. Also, the setups that I talk about today are really applicable for any timeframe. My focus is generally on the intraday timeframe, especially with futures. Questions and comments are welcome and I will be watching both the options-doug-chat channel in Discord, as well as the chat and YouTube for your questions and comments. Please feel free to post and I'll do my best to answer your questions. And hello, Steven. Welcome. Good afternoon to you. Glad you're here. All right, here's my agenda for today, Tuesday, January 23rd. The first, I want to go over news items, economic data, and events for today as well as the rest of the week. Then I'll go through my positional analysis. Then I'll review some setups from earlier today and then I'll take a look at the live market. And when I get to live market, if anyone has any stocks, they want me to take a look at that, please let me know and I'll be glad to do that. All right, let's get started with news items. So the only thing today is Netflix is reporting earnings after the market closes and that is the first stock of the stocks that I follow on a regular basis that is reporting this earning season. So Netflix after the market closes and then tomorrow, Tesla reports after the market closes. Also tomorrow, Wednesday, 9.45 a.m., there's some PMI data that comes out. Then on Friday, the more significant data starts, I'm sorry, on Thursday, durable goods and GDP out at 8.30 a.m. Eastern time. Also, ECB makes a rate announcement sometime on Thursday morning. And then on Friday, the big data release for the week is the PCE data that comes out at 8.30 a.m. Eastern time. All right, let's move on to positional analysis now. I'm going to start with the SB500 and this is the ES futures and book map. And before I take a closer look at this chart, I do want to take a look at a longer time frame, larger time frame. And I'll go to the underlying index, which is SPX. I'm going to start in Thinkorswim here with a one day chart. So the current rally began October 30th, wrong tool. Current rally began October 30th for a variety of reasons, IV collapse, put Vanna rally, better than expected inflation reports, somewhat dovish FOMC, and SPX rallied up to around 4,800, found some resistance there, and then broke out last Friday, Options Exploration Friday. And since then has been consolidating. All right, let's take a look at another SPX chart. So we'll move down a little bit in time frame and go to a one hour chart. So again, SPX, that's the wrong chart. Here we go. One hour chart. So this is showing, here's the 4,800 level resistance, the end of last year resistance, and then last Friday, Options Exploration, SPX broke above that 4,800 level. And since that rally now appears to be consolidating. All right, on this chart, I do want to take a look at the levels. So I'm going to zoom in just a little bit. I don't think that'll help since the put wall is down so low. All right, so the levels on this chart, first of all, the dash purple lines are showing the lower and upper weekly expected move. That upper weekly expected move may be difficult to see. That's right around 4,900. And that is based on the options market updated once a week. I update that over the weekend. SPX is trading in the middle of that range. Then the dash blue lines are showing the lower and upper daily expected move, also based on the options market that's updated once a day. SPX is also trading within that range as well. All right, the dark red lines are showing spot gamma levels. These are levels that spot gamma calculates. Every day they're updated once a day based on gamma weighted open interest. They're provided to spot gamma subscribers for a variety of trading platforms. This is thinkorswim. I'm going to point out the key daily levels. These are the dark red lines. So first of all, here's the put wall at 4,500. That's the strike with the largest net negative gamma that can be expected to act as support. And that level did drop substantially from yesterday. So that's the put wall. And the next level up is the volatility trigger. That's at 4795 kind of in this cluster of levels here. That is spot gammas proprietary gamma volatility 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 in a negative gamma environment. I'm typically looking for more wider trend range, more trend days. On the other hand, above that level, market makers position on the gamma curve is positive. In a positive gamma environment, market makers have to trade against price to hedge their delta exposure. And that tends to subdue or decrease volatility. So in a negative and a positive gamma environment, I'm looking for smaller trading ranges more range days mean reverting price action. And the next level up is 4900. That's the call wall. That's a strike with the largest net positive gamma that can be expected to act as resistance. And that level did move up from from yesterday. Slightly from 4860 to 4900. And note the volatility trigger did shift lower. So for SPX, the volatility trigger and put wall both shifted lower, call wall shifted higher. And then the absolute gamma strike remains at 5000. That's the strike with largest absolute positive and negative gamma. So a pretty wide range there. Put wall being the potential floor at 4500 and the potential ceiling at 5000. And both certainly not in play for the next few days. And note after expiration, it usually takes several days for the level levels to settle into more longer term levels. So again with the options expiration last Friday, the levels are still trying to again find a more permanent location. Alright, so let's take a look at one other chart SPX go to a one minute chart just to see the levels and play for today. And it's really this 4850 level. This that's an L three large gamma three level, one being the most important five being the least important. And that's also a combo to a level, a level combining SPX and spy gamma weighted open interest into one level. They're in terms of an SPX price. And note this is the rally from last Friday. And then consolidation this week so far, just up and down mostly up above just around the 4850 level. All right, let's go to book map now. So again, remember, SPX is the underlying index. And you can you can't buy or sell SPX, you can only trade options in SPX, you can buy and sell is futures. So in ES futures here, I have my own cloud notes. So I can show SPX levels. And that is there's that 4850 level that I just talked about. I can also show spy levels on this chart. That spy 484 acting as resistance. That was also a kind of a good entry point around that level for a short this morning. And then the spy 483, that's not a spy gamma level, it's just around number level, acting more less as support. Note all the liquidity down at that level. Also providing some additional support. We'll talk more about that in a few minutes. All right, so very narrow range here in in the SB 500 today, basically trading in about a 10 point range for the day. And really, really for for the first hour, very frustrating to watch. Painful watch, not much going on up until about 1030. All right, so those levels of play for SPX, I have again, SPX levels on this chart. QQ, sorry. I have SPX levels on this chart spy levels. Note there is a difference of price between ES and SPX. And today it is right around 30 points, maybe just a little bit less. That's what I'm using 30 points. So ES minus SPX is 30. I post all the index relationships that I use every day on my end discord and the options dash Doug chat channel and discord, trying to get those out by 10 a.m. Once they've settled down for the day. So SPX 4850 is at ES 4880. All right, shifts and levels. I mentioned the for SPX volatility trigger put wall shifted lower. So that's somewhat bearish. Call wall shift shifted higher, somewhat bullish. So in the case of the call wall shifting higher, that indicates traders are looking for and accepting and positioning themselves for higher prices. So that is that is bullish. We'll take a look at the absolute gamma levels for SPX in just a moment. All right, let's take a look at NASDAQ now and NASDAQ also trading in a pretty narrow range today, mostly between QQQ 421 and NQ 17500 on the upside, maybe a little bit less before. So this is in Q futures and book map before I take a closer look at this chart. I do want to take a look at first of all QQQ. So I'm going to go to the again the underlying index products QQQ being the most significant more significant than NDAX. Again, not much range today. More consolidation trading around this 422 L3 level large gamma 3 level. All right, so that's QQQ trading in a very narrow range and just looking at it in terms of QQQ terms. Trading between 421 and 422, maybe 422 50. Let's take a look at NDAX just for completeness. So pretty similar to the shorter term chart of SPX Friday rally and then consolidation. All right, shifts in levels for NASDAQ. The volatility trigger shifted slightly lower for NDAX and higher for QQQ. All right, so really not much clue, not much of clues or informative information for these shifts and levels for NASDAQ. All right, so just like ES, I have my own cloud notes and there are no NDAX levels here in play. So I have there's that QQQ 422 level that I mentioned before. Also, I have the big round numbers, the zeros in the fifties for NQQ and I'll talk about setups in a few minutes. All right, so let's take a look now at Gamma Notional to see how market makers were positioned on the gamma curve at the beginning of the day. So what I'm going to take a look at is Gamma Notional for SPX, Smy, NDAX, QQQ, Rut and IWM. So S&P 500, NASDAQ and Russell 2000. And this is how market makers were positioned on the gamma curve at the beginning of the day. So note for the S&P 500 and NASDAQ these numbers are positive. What Spot Gamma assumes for an NDAX is that traders are short calls, market makers are long calls and a positive gamma environment has the positive gamma and they have to trade against price to hedge their delta exposure and that tends to subdue or decrease volatility. And these numbers are slightly negative for the Russell 2000. All right, these numbers shifted, they're mixed. Gamma Notional for SPX shifted lower from yesterday, shifted higher for SPY and NDAX and shifted lower for QQQ. And the numbers Gamma Notional for the Russell 2000, although negative, still became less negative than yesterday. So kind of a mixed picture for Gamma Notional. All right, let's take a look at the absolute gamma landscape. I'm going to take a look at SPX just to get a graphical representation of how market makers are positioned. So this is absolute gamma for SPX. Orange bars showing call gamma or positive gamma. Blue bar is showing negative gamma or put gamma. And this is the 5,000 strike that is very obviously the absolute gamma strike. The strike with the largest absolute positive and negative gamma. There's the call wall at 4900. That's the strike with the largest net positive gamma. So the orange bar minus the blue bar. And that is the, that's the call wall. And note the concentration of call gamma between 4800 and 4900. And there's the 4850 strike that I just mentioned right in the middle. Let's take a look at one or the other thing. So remember yesterday the call wall was at 4860. And what I'm showing on this chart is open interest change from yesterday. So this is for calls. Orange for calls. This is the 4900 strike. So this is showing this 4900 strike became the new call wall due to the addition of calls at this level. So very obvious that the open interest change at 4900 moved that call wall up to 4900. Alright, so based on this my thesis for the day looking for lower volatility due to the positive gamma for both the SMB 500 and NASDAQ looking for more of a range day and somewhat I guess neutral to bullish based on the shifts higher and the call walls for SPX and spy. Alright, let's take a look at some setups now. I'm going to start with what options traders are doing. Let's go to the SMB 500. So everything that we've looked at so far other than book map has been based on static data. So the gamma notional the levels all are updated once a day. And then the new levels come out tomorrow. So they may be changing during the day. But this information is static updated once a day. And this is what I use for my planning spot gamma takes open interest data applies their proprietary algorithms and comes up with the levels the gamma notional everything that we've looked at so far. Now we're going to go on to execution. So I'm going to start with real time data here. What this chart is showing is price for SPX with the white line and the hero signal hedging impact real time options. This is showing options trades and market maker hedging activity for a combined signal of SPX spy XSP and ES futures. So spot game is taking options trades and all of those index products various versions of the SP 500 combining them into one signal. All right so let's zoom in on this chart. So the purple line against the hero signal a rising purple line indicates traders are taking positive delta positions. When traders take positive delta positions market makers are taking the opposite side and they have to buy futures to hitch their delta exposure for the SP 500 the most efficient way for them to hedge with is with ES futures and for and SPX for example there's that's the only way to hedge. I guess the they may be hedging with zero DTE options as well. I look at it in terms of hedging with ES futures. So hero signal falling traders taking negative delta positions market makers take the opposite side and they have to sell futures and on the other hand with hero rising traders taking positive delta positions market makers have to buy futures to hedge their delta exposure. Oops let's go back. All right so let's take a look at take a look at a few setups here. So remember I mentioned when I was looking at ES all this chop in the morning just kind of painful to to watch and really did not provide a good setup until about 1020 that's when this hero signal peaked and then reverse lower. Traders stopped taking positive delta positions started taking negative delta positions and ES reverse lower. So let's go take a look at bookman back to ES zoom in. So this is the setup that I was looking at. Remember options trader started taking negative delta positions right around 1020 and then ES finally broke out of this range. Let's see what time that was. Right around 1023 came up and retested VWAP that's shown by this light blue line here and then move lower. Good for a few points maybe maybe seven or eight points in ES. Let me point out some things in order flow here. First of all the the volume dots are showing market buy minus sell. Green dots indicate more buyers than sellers. Magenta dots indicate more sellers than buyers. So note the magenta dots as price started to move sharply down and then also on the sub chart here CVD drops pretty sharply. That's the dark blue line that shifts to pink when CVD shifts negative. Sharp drop in CVD retest of VWAP shown by that line there and price moves lower good for a few points in ES as traders were taking negative delta positions. Let's move on and cookie 69 I hope I'm pronouncing that right. Hello ask if I'm using a stop loss. So when I trade futures or shares of stock day trading yes I do use a stop loss. When I'm trading options I do not. So options are defined risk so you don't need a stop loss for options trades but I do for especially for futures. Very leveraged product. Alright let's take a look now at just these volume dots a little bit. Let's go back to hero. Alright so that trade that started right around 1030 was good for about an hour and let's go back to hero now. So right around 1055 traders started taking positive delta positions. So this is pretty typical of mean reverting price action options traders selling highs buying lows. So right around 1130 they started taking positive delta positions again and price moves higher and in that case that move continued higher. Note the flow alert here that came in at right around 1145. Alright let's go take a look at book map now. So in book map let's take a look at order flow here and you can see from the volume dots aggressive buyers start to come in. Aggressive sellers on the way down. Note also that larger traders were buying this with iceberg orders that shown by this rising light blue line also the on-chart indicators that one is obscured by the red dot showing stop orders but that's over a thousand contracts three executions by orders iceberg orders also the liquidity in the order book here. This is shown by the heat map shows a history of the limit orders in the order book. So a lot of aggressive buyers or passive buyers in there in the order book looking to get long right around 470 48 73 74. So we know that large traders were buying with iceberg orders options traders were taking positive delta positions and aggressive buyers came in and started to move price higher. Alright so the rally that began right around 1130 or so continues to grind higher. So the setup was really the biggest clue in in the order book here was was the iceberg orders shown by the rising light blue line as well as the on-chart indicators and now they started buying on the way down that's pretty typical large traders buying with buying weakness with iceberg orders and now prices back up to that spy 484 level. Alright let's take a look at NASDAQ now. So NASDAQ had a little bit more range this morning I thought it was a little bit more tradable. So let's go to go back to hero. So hero continues to trend higher for SAP 500 continuing that move that began just before 11 a.m. Alright let's take a look at the hero signal for NASDAQ. I want to look at the NASDAQ first. So this is a combined signal for NDX and QQQ and I think this is pretty obviously not providing much much clue. So recently I have been looking at this signal for NASDAQ and it's a bit a little bit more informative especially in the morning. What this is is a combined signal for the stocks known as the Magnificent 7. Apple, Amazon, Google, Meta, Microsoft, Nvidia, Tesla. These stocks make up a very large component of the NASDAQ 100 and are a key driver of price for the NASDAQ 100. Alright let's zoom in on this chart. I'm gonna zoom in on the morning. So just like the just like the SMB 500 in the morning this price action and options trades in Mag7 was pretty much mean reverting. So after an initial push down this is the first long just very just five minutes after the cash open 935. Initially traders were taking negative delta positions in the Mag7 and then they switched started taking positive delta positions and NASDAQ reversed higher. A little bit of a pullback here more main reverting price action and then hero shifted higher again. Alright so this set up along just at 935 right after the cash open. Let's go take a look at that in book map. I'll zoom in on this. So here's that reversal higher at 935. In this case the this V spike reversal the shift in order flow is pretty clear. So we know that traders in the Mag7 started taking positive delta positions right around 935. Watching book map you can see that large traders were buying weakness with iceberg orders that shown by the rising light blue line and just like the SB 500. Aggressive sellers and sell stop orders shown with the yellow line were fueling the move lower. Volume dots very easy to read here. Large magenta dot the last dot so aggressive sellers on the way down and then aggressive buyers start to come in and price were reverses back above QQQ 421. So aggressive sellers on the way down sell stop orders large traders buying the move down with iceberg orders and then price reverses higher as traders were taking positive delta positions in the Mag7 stocks. So there was a short set up almost also this morning reversal right a move lower right at the 422 level. That's also V WAP and also the point of control shown by the purple line there. Let's go take a look at the hero signal from Mag7. So here's the reversal lower in the Mag7. So it's in this case not acting as a leading signal but just a confirmation of the move lower. Let's go back to book map. So in book map there was this trend break and note that once price started moving higher large traders started selling that move with iceberg orders. Price consolidated. Traders started taking negative delta positions and price moved lower as aggressive sellers came in and started moving in Q lower. Then sell stop orders helped to fuel the move lower and once again the large traders come in with iceberg orders and price moves back higher. Alright so that is ES Nasdaq up and down trade today. Let's go back to hero. Let's see if there's any information from the Nasdaq signal. No. So this afternoon the S&B 500 signal is much more clear hero signal. Alright let's take a look at a few stocks. This is meta. Look at the morning session actually let me point out this is a very typical pattern. In the morning traders aggressively taking positive delta positions and then as they take their foot off the gas start taking negative delta positions price consolidates or moves lower. Very typical pattern if you wanted to appear buy a by a put spread sell a call spread. Good time to do it. Alright let's see what traders were doing in meta. So in the morning they were primarily buying calls. That's shown by the rising orange line. When traders buy calls market makers sell the calls and they have to buy stock to hedge their delta exposure. Alright let's go to book map. Go to meta. So here's the the morning rally. Options trader take their foot off the gas and price moves back down close to the looks like close to the opening print or actually the low of the day at 383. Next Nvidia and WRB yeah I'll get to Tesla. Nvidia sharp drop down in the morning rally. Look at all the liquidity up at 498 to 600. So this is showing the history of the limit orders in the order book. Above price those are limit sell orders and those orders often tend to attract price and know they come in right at the cash open. And typically in a stock they will stay in the order book until they're filled. Alright let's go take a look at hero for Nvidia. Let's zoom in just a little bit. So here's that 600 level. That's the call wall key gamma strike. Note the put wall at 585. Initially traders were taking negative delta positions and then price reversed higher. Let's see what time that was. 935 and just let me ask everybody does that ring a bell 935. I'll go ahead and answer that's when NASDAQ reversed higher right at 935. Traders started taking positive delta positions in Nvidia. Nvidia reversed higher NASDAQ reversed higher. And then pretty soon they started they took their foot off the gas and price consolidates. So again there's that typical pattern. Strong move in the morning as traders take positive delta positions. Options traders take the foot off the gas and price consolidates removes lower. Alright the next is Tesla. And hello L. I'm sorry I can't pronounce your name. I'm not sure how to pronounce your name. Welcome glad you're here. I'm looking at YouTube. Alright Tesla very choppy day in Tesla. Let's zoom in on this. There was a good short setup in the morning. Traders taking positive delta positions from the open. Note the flow alert there can often be a mean reverting signal. Traders start taking negative delta positions. Setting up a short right around 945. Let's go to book map. So here's the just again the setup in Tesla. Nvidia sharp reversal higher 935. Nvidia moves higher. NASDAQ moves higher. And then options traders take the foot off the gas and Nvidia consolidates right around 595. Let's take a look at Tesla. Tone down the volume dots. So here's the short setup in Tesla. Hero floor alert. Hero shifts from positive delta to negative delta. And price moves lower. Let's take a look at Netflix. Remember Netflix reports earnings after the close today. So a pretty choppy session here in Netflix. NWRB thank you for mentioning Tesla. Yeah it was a very nice short today. Let's take a look at Netflix. Let's go to hero. Alright so the hero signal net for the day is just about flat. Note the notional value. Still minus for the day negative but up and down. So traders are buying puts and buying calls. Puts shown by the following blue line negative notional value indicating they're buying puts. And calls shown by the rising orange line positive notional value. Alright one of the man asked what do you use to compute the upper daily upper and lower daily expected move. Upper and lower weekly expected move. Alright so let me show you what I use. And note that spot gamma does provide that information. But I am just in a habit of using an options chain here. So this is SPX and thinkorswim. Let's just take a look at an options chain. So to calculate the expected move for tomorrow. I'll wait until the close at 415 Eastern time 415 p.m. Eastern time. I'll take this number right here. So plus or minus right now it's right around plus or minus 23.8. That will be a little bit different at the open at the close. So I'll take that number at the close today and then add it and subtract it from the closing price of SPX to come up with the lower and upper daily expected move. And then on the on the Friday close I can calculate the lower and upper weekly expected move. Now also have I have in my charts here and an indicator that shows the for every week shows this is for last week shows the lower and upper weekly expected move. All right. So the simplest way again is just to get that information from an options chain. So you should be able to get that information from any trading platform that has an options chain. All right. Let's take a look at. Let's go back to book map. The SB 500 it looks like. The hero signal is consolidating now. Let's go to book map. And you welcome one of the men. Let's go back to book map. So it looks like this 484 level is acting as resistance. We'll zoom out on this. So ES continues to kind of grind higher but in a very narrow range moving very slowly. And for first hour today I thought EOS was pretty painful to watch. All right. Let's take a look at Nasdaq. And if anybody has any stocks they want me to take a look at please let me know. And I'll be glad to do that. So Nasdaq chopping around 17450 17500 with QQQ 422 in the middle. Let's go back to heroes see if there are any clues. Take a look at mag 7. And it is starting to move lower. Let's just see what traders are doing. So they're starting to sell calls. That's shown by the falling orange line here. Traders are starting to sell calls in the mag 7. So this could be a leading indicator for a move lower in Nasdaq. And also the SB 500 look at the Nasdaq signal and potentially making a series of lower highs. So this is a signal that combines NDX and QQQ options trades. Back to mag 7. Let's go to book map and some sell stop orders starting to come in. All these numbers shown in the sub chart indicators. Blue for icebergs. Yellow for stops. Now magenta for CVD all very low. Those are small numbers. And on this event. So there are a couple of iceberg orders buying this level right around 466. They have not come back in. Nasdaq making lower highs lower lows. As options traders are taking negative delta positions. So watch this and see how it resolves around around 422. Let's go back checking check hero. Just a note when I'm trading I have multiple screens. So I can watch hero on one screen book map on another and then my trading platform on one other screen. So I you know of course I'm only presenting on one screen so I have to jump back and forth which is certainly not the ideal way to trade. Alright take profit. Hello says he has a he or she has a doubt. If the day star starts with gamma notional positive then when the market opens hero shows a huge negative value. Does the gamma notional change to negative to well gamma notional will is not necessarily you can't. I don't think you can just look at the hero signal and say that gamma notional is doing this or that. I think typically if price. If Nasdaq increases during the day or S&P 500 increases during the day then you expect gamma notional become more positive and if it if they decrease then you expect gamma notional to become more negative. So a large rally will tend to you know you wake up the next day and gamma notional will be more positive. But I don't think so hero gamma notional does change during the day but that information is only available once a day. So that's why this hero signal and of course the order flow and book map is so important is right so it looks like Nasdaq is breaking breaking lower look at maybe breaking lower still training in a very narrow range right around 422. So in spot gamma spot take profit ask and spot gamma work and I see the last gamma notional in real time so there is no gamma notional in real time gamma notional is only updated once a day that is on the that shown on a couple pages and I show it on the the data table at the at the bottom of the AM founders note and then the new gamma notional whatever this is market makers position on the gamma curve at the beginning of the day and that you know that data will be updated tomorrow so that's based on open-interest data that is provided by OCC once a day. So you I use that information on my planning and now we you can take a look at let's go to the index page here you can't take a look at the Vana model so gamma notional updated once a day this Vana model gives you an indication of how market makers made react to changes in price and apply volatility typically in a in a positive gamma environment I don't take a look at this chart every day I don't show it on my presentation every day 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 I'm just going to focus on the purple curve this is showing how market makers delta notional may change with changes in price and applied volatility so what this is showing let's go to 4850 that's a price was concentrated around there so a price starts to drop what this is showing is market makers delta notional will increase they'll have to sell futures to hedge their delta exposure so that's typical of a negative gamma environment where market makers are trading with price to hedge their delta exposure and their price starts to move up toward 4900 market makers delta notional will increase again and they will have to sell futures to hedge their delta exposure so that's what this Vana model is is predicting or indicating so this gives you a sense more in real time or how to expect market makers may react to changes in price and apply volatility so this portion of the this portion of the curve typical of a negative gamma environment this portion of the curve typical of a positive gamma environment and note that the assumption is and that I'm sure that's true that market makers are delta neutral at the beginning of the day right so gamma notional updated once a day and then you can take a look at the Vana model to get an indication of how market makers may react to changes in price and applied volatility and you welcome take profit let's take a look at NASDAQ again so it sure looks like to me that it wants to break down out of this range below 422 let's go take a look at hero hero for a mag 7 tends to still is trending lower alright my time is up I better wrap it up otherwise I'd keep an eye on on NASDAQ here let's go to ES I think there's much more clarity on NASDAQ here so looking for a break break lower alright 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 so remember Netflix reports earnings after the close and we'll talk about that tomorrow all right thanks again everyone have a great afternoon I will see you tomorrow bye