 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. The focus of my presentation 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 and spot gamma hero to confirm my thesis and for setups for entries and exits. And on topic questions and comments are welcome and I will be watching both the options dash Doug, chat channel and Discord and the chat and YouTube for your questions and comments. All right, let's get started. I've got a lot to cover today and of course the first item on the agenda is news, economic data and the events today and the big event today, FOMC. Then we'll go through our positional analysis and then if we have time before the FOMC announcement at 2 p.m., we'll go through some setups and then finally at 2 p.m., we'll switch over to the S&P 500 and watch that after the announcement. All right, so first of all, again today the big news, big event for the day is the FOMC announcement at 2 p.m. and then the press conference begins at 2.30. So just, we've been looking at this from time to time. This will be the last look before the announcement. This is the current Fed funds target rate at 450 to 475 basis points and note that the market is pricing in a 13.6% chance of no increase, of maintaining that current level and then an overwhelming 86.4% chance of a 25 basis point rate hike to 475 to 500 and that has been shifting higher and higher over the last few days. So right now it looks like an overwhelming probability that's what the market is pricing in for a 25 point basis point rate hike and then just briefly jobless claims tomorrow and durable goods and PMI data come out on Friday. All right, let's go through our positional analysis now. So let's take a look at charts. This is the book map S&P 500 ES futures and before I dig into this chart, let's take a quick look at a larger time frame. So this is SPX in a 20 day one hour chart showing the key levels here. So this is showing price and spot gamma levels and these levels are provided to subscribers for a variety of platforms and different types of notes. This is a think script that's provided to think or swim users and showing the key levels here. This is the put wall, the strike with the largest net negative gamma and that can be expected to act as support and then here's the volatility trigger at 3980 and that spot gamma is proprietary gamma flip level indicating that market makers position on the gamma curve is negative below this level indicating they will need to hedge with price to hedge their delta exposure and then above they can trade against price to hedge their delta exposure. So that's a typical of a positive gamma environment above and negative gamma below and then here is the 4000 level that's the key gamma strike or absolute gamma strike. The strike with the largest absolute gamma and that can be expected to act as resistance support or a magnet for price. And then finally here's the call wall at 4065 and that's the strike with the largest net positive gamma and that can be expected to act as resistance. So that's the SPX in a 20 day one hour time frame. Let's take a look at another think or swim chart just showing price action for today and this is a one day one minute chart showing the same levels. Here's the volatility trigger at 3980 the 4000 key gamma strike and then the call wall is on up above and note the price rotation up and down around the 4000 level so it is acted as support support and here resistance and potentially resistance again but price is oscillating and rotating up and down around that level. All right let's take a look at book map now and I'm showing the same levels on this chart and I have two columns of notes. This is the spot gamma cloud notes. These are provided to book map users that's subscribed to spot gamma. This is showing the SPX levels that I just talked about. There's the 4000 level and the 3980 volatility trigger and note that spot gamma is using a 40 point difference between ES and SPX and I calculated that earlier today at 33 points so I'm showing kind of a revised levels in my cloud notes column here the C levels and I'm showing there's the 4010 level that was noted as a resistance pivot level and then there's the 4000 level and note my level is 7 points below the spot gamma level and I think this is closer to the reality the real level and I'm also showing key SPI levels and that is the 400 SPI key gamma strike and that's also the volatility trigger for SPI. I think it's important for anybody that trades any form of S&P 500 ES futures SPI SPX options to keep track of all these levels and again today this is showing how this 4000 level has been in play support and resistance and I'll talk about setups in just a few minutes. So let's talk about shifts and levels now and the levels that I keep track of the volatility trigger the zero gamma level put wall call wall and key gamma strike. So for the S&P 500 the volatility trigger did shift higher for SPX and SPI and for SPX it shifted higher from 3955 yesterday to 3980 today and for SPI that level shifted higher from 395 yesterday to 400 today and then also for SPI the key gamma strike shifted higher from 390 yesterday to 402 today and then finally for the QQQ for the NASDAQ the call wall did shift higher from 310 to 315 so I take all of that as bullish the shifts higher in those levels now of course that is you know that's before the open not accounting for what's going to happen after 2 p.m. all right let's take a look at the gamma charts now and we'll see where those levels come from this is the S&P 500 showing absolute gamma levels this is the zero line and above that line that's positive gamma or call gamma shown by the black bars and below that line that's negative gamma or put gamma shown by the teal bars so this is showing the 4000 absolute gamma strike or the key gamma strike the strike that price has been oscillating around today as you know that's pretty obvious that is the strike with the largest absolute gamma and then down below is the put wall the strike with the largest net negative gamma and that can be expected to act as support and then here's the 4065 call wall the strike with the largest net positive gamma that can be expected to act as resistance and note that is the short call strike of the JP Morgan collar that expires at the end of this month March 31st so that's SPX let's take a look at spy again the same same configuration zero line positive gamma or call gamma above and negative gamma or put gamma below and again remember the key gamma strike has now shifted up to 400 so that's the strike with the largest absolute gamma and the put wall is at 390 that's pretty obvious the strike with the largest net negative gamma and then the call wall remains at 402 strike with the largest net positive gamma and note the let me just go back to the SPS SPX want to point out one thing is what appears to be a slight build in call gamma above the 4000 level but still the dominance of put gamma below the 4000 level let's go back to spy and note the dominance of put gamma below the 400 level all right well we're on this page let's take a look at the combo strikes and this is showing combined gamma for SPX and spy and converted into an equivalent SPX number and again call gamma or positive gamma above and put gamma or negative gamma below and let's see if we can find the volatility trigger and I believe it's it's right around here so this is the gamma flip level and you can see it's it's pretty clear on the chart with call gamma or positive gamma above and negative gamma or put gamma below and that's the 3980 level all right so those are the combo levels and and JEC confirms those combo strikes lining up exactly where we're seeing competitive trading levels so the these strikes are important all right that's the s&p 500 let's take a look at the NASDAQ now and for the NASDAQ we'll just look at qqq ndx is is not significant so again positive gamma or call gamma above the zero line shown by the black bars and negative gamma or put gamma was shown below in the teal bars and qqq for qqq 300 is the key gamma strike and the put wall remains at 285 and then the call wall moved up from 310 to 315 so note the dominance of put gamma below the 300 level and call gamma above that level and 304 is the volatility trigger for for qqq well let's take a look at data now and I'm going to focus on the gamma notional this is market makers position on the gamma curve for spx in the far left column spy in the middle column and qqq on the far right column and notice that these numbers are negative for the s&p 500 both spx and spy and again this is market makers position on the gamma curve in a negative gamma environment this means that traders are long puts market makers are short puts and they have to hedge in the direction of price to hedge their delta exposure and then in a positive gamma environment like qqq that means that traders are short calls that's spot gamma's assumption for an index traders are short calls and market makers are long calls and they have to hedge against price or trade against price to hedge their delta exposure and these numbers have shifted higher from yesterday or become for the s&p 500 less negative so yesterday gamma notional for spx was minus 305 and today it's minus 75 and yesterday gamma notional for spy was minus 1530 and it has become less negative to 1033 minus 1033 and then yesterday for qqq gamma notional was minus 56 and today it is 115 positive 115 so the way that I interpret this is there is less gamma notional to fuel a potential put banner rally and also supporting that is the rectangle is look at the large drop in vicks it's gone up a little bit today and and there's a pretty lengthy discussion in the last few spot gamma am founders note about the vicks expiration and the the impact that that would have on the on the market and trading but you know the thing to note here is this is so this dark area this is Wednesday during the regular trading hours this is this is Tuesday and then this is Monday so this drop started pre-market before the rth open on Monday and there's just been really a continuous drop in vicks so again i'm just interpreting this as a you know potentially traders have pulled forward here any rally based on what the feds fomc announcement and in press conference but could be wrong but you know there's still some put banner in the tank so let's take a look now at the banner charts and this will illustrate what i'm talking about so this is the spx and this is pretty neutral just slight shite slight shift higher from right to left showing that market makers will need to hedge in the direction of price or hedge sell futures as price drops since their delta notional is increasing and that's shown by the green curve here that's the current expiration showing how their delta notional changes with changes in implied volatility and in price and that's the banner effect the change in delta with the change in implied volatility and then the black curve is showing the change in delta notional as time passes and that's the charm effect so pretty neutral for spx take a look at spy and recall that spy gamma notional is significantly more negative than spx so this is showing a lot easier to see that market makers will need to sell futures to hedge their delta notional shown on the vertical axis as price drops and then as price increases and implied volatility drops they can buy back their short futures and here's qqq and this is slightly shifting the other way again in a positive gamma environment but overall pretty neutral all right finally let's take a look at my key gamma strike list these are all the stocks on my watch list mostly large cap tech stocks and i track the key gamma strike every day and compare it with the key gamma strike from the previous day so the key gamma strike from yesterday is shown in the e column and the current key gamma strike is shown in the d column and i color code these green indicating that there was an increase and the key gamma strike from the previous day is shown here for amd also snowflake spy and tesla and then red indicates a decrease in the key gamma strike shown there for vix so overall interpret this as bullish of course with the fomc caveat all right let's take a look at let's take a look at some setups and in uh youtube floyd's garage asked does rty or our i wm agree as well and i'm sorry i i don't have rty or i wm uh up in book map if we have time we'll take a look at we'll take a look at hero but i'm i'm sorry i just i don't really follow i wm all right so i've got about uh six minutes left let's take a look at some setups so first of all i'm going to take a look at the s of p 500 this is hero spot gamma hero and this is showing the hedging impact of real time options that's what hero stands for and it's showing options trades market maker hedging activity and this chart is for the s of p 500 it's a combined signal of spx spy and xsp and xsp is insignificant compared to spy in and spx okay let's i'm going to zoom in on this chart and again this is showing options trades hedging impact and show uh this is showing what how options traders were trading today and note heroes is uh moving down so traders net overall are taking have been taking so far today negative delta positions in in uh the s and p 500 spy and spx and let's just take a look and see what they're doing and this is separating calls and puts and notice they're buying puts and then they have started buying calls so the puts this the lines are shown in in terms of delta and buying puts is negative delta so this put line is sloping down and the orange line is for calls and again in terms of delta traders are buying calls and that's indicated by the rising orange line but net net when you compare the notional values here minus 400 and just can't get too close to the edge there minus 430 million versus positive 327 million that nets out to a total of around minus 109 million so slightly negative and that did set up a very nice short in the s and p 500 i like to look for these divergent setups so heroes dropping prices rising jumps up and sets up the the short right right here right here here so let's go take a look at book map so there's the short in the s and p 500 futures just below the 400 key gamma strike and then there's the second short entry all right let's take a look at a couple of other things here note the rising orange line there that is a stop run helping to fuel that move higher and note that large traders were fading that move with iceberg orders shown by the following light blue line there so iceberg orders are orders that larger traders used to hide their size so that's a pretty uh pretty typical setup looking for a short stop run into a level larger traders fading that didn't just look for a lower high to to enter all right so that's the s and p 500 let's take a look at spy and here this is showing the same same idea here this all these green dots showing a by sweep up just below the 400 key gamma strike and then i'm also showing here how the 4000 level has acted as support and resistance and now spy is s and p 500 is trading right around that 4000 level all right we don't have any more time for for setups here let's go back to the futures i've got less than a minute until the announcement so we'll wait for that i'm going to pop up a cnbc on another computer another screen while we wait so just a few seconds left all right it's 2 p.m all right so it looks like the the consensus was correct with a 25 basis point rate hike we'll zoom in on this a little bit we'll give it a couple minutes and then we'll take a look at and see what options traders are doing so to see all the movement we really have to zoom in here like bruce does at uh looking at 30 second time slices here right so they you know of course they have the rate announcement and the statement cnbc cnbc indicates some additional policy firming may be appropriate so it looks like the interest rates are dropping both the two year and the 10 year and the fed indicates recent developments indicating additional credit tightening tighter credit will weigh on the economy activities hiring and inflation and the year-end fund funds rate projection at 5.125 percent well let's take a look at a hero and see what options traders are doing and i'm going to change this to a much smaller uh look back here let's try that so now i'm just looking at the uh the past five minutes of data in this rolling window so so far it looks like a very strong correlation between options trades hedging flow and price action the fed indicates inflation remains elevated banking system is sound and resilient and let's go back to the futures now and note uh price heading up towards the 402 spy call wall and there's a comment in in youtube sorry i i don't know how to pronounce your name uh hello i'm glad you follow me uh adjar hello again i'm glad you follow me on discord glad you're here let's take a look at the vixx and see what uh what volatility is doing and so now is expected and we'll just zoom in on today volatility is dropping all right we'll watch this uh for a few more minutes and then then maybe take a look at some other instruments and some setups from this morning if anybody has any other ideas let me know just let me know what you want me to do let's take a look at hero again and see what options traders are doing see if that can give us any clues so now they're looks like they're fading this move so they've been buying puts and this is just for uh you know the last last few minutes buying puts starting to sell calls and it looks like these put buyers the put uh hero has uh been a little bit of a lead on price falling a little bit of a leading indicator and one thing that i uh always point out i have two screens so i don't have to jump back and forth between hero and book map i'm just watching both simultaneously but here in my presentation i can only um show one screen at a time so that does make it a little bit clunky for the presentation but for but for trading with two screens it works just fine let's go back to book map now keeping in mind that option traders uh for the last couple minutes have been fading this and note the shift in order flow here in in book map see all the green dots there market buy orders up just below this four four oh two spy four oh two call wall level and then the shift in order flow from bullish to bearish you can see the pink dots coming in there market sell orders and then this 400 key gamma strike right now appears to be acting as support some green dots coming in may not last and an additional clue for this drop was these iceberg orders not large in size but traders larger traders were fading that move with sell iceberg orders so this this drop here was a pretty clear read options traders buying puts the shift in order flow from bullish to bearish and then larger traders fading the move with iceberg orders let's go back and take a look at hero we'll separate out puts and calls again so now it looks like they're they're starting to sell puts and buy calls let's go back to book map so price is responding higher and notice how larger traders are so they're selling strength start buying weakness as price falls and in order to see a rally I typically want to see this yellow line stop orders rising that's often a very good indication of direction let's go back and take a look at hero often a any divergence in hero can take quite a while to play out minutes to hours and keep in mind I normally don't look at a time frame this short I look at the the signal for the entire day so it looks like price may be heading back down to the spx 4000 level that has been such an important level today all right anybody have any opinions I've got about 15 minutes late we can continue left we can take a look at continue watching the sp500 here or we can take a look at some setups and some other instruments anybody have any thoughts opinions all right I'm don't see anything I'm going to take a look at some other setups so let's go back to hero now and so we've already looked at the sp500 in the setup from this morning I want to take a look at amd and recall amd was one of the stocks with an increase in the key gamma strike list from 90 to 100 let's go take a look at hero now so there's amd in bookmap and I'm going to change this back to the what I normally use is the one day look back period close this let's take a look at amd and here's what I saw this morning and I'm going to look at puts and calls separately and showing the call buyers buying calls from the open price response or price follows all right so in youtube Bartos says we got to wait for for the j powell conference for the real move and yes so that that's often the the situation and I will be signing off just as he starts so my webinar ends at 230 so that's uh while we're waiting on that I'm just going to take a look at some setups from this morning so here is amd let's go back to bookmap nice strong uptrend note the all the green dots here market buy orders driving price up to the liquidity at the 99 level then a pullback to 97 and then a move up to the 100 call wall key gamma strike at 100 and notice all the liquidity at that level that tends to attract price and so far the call wall is acting as resistance as expected so great long setup in amd this morning let's take a look at microsoft and another long setup and recall microsoft has been uh been weak for the last couple of days since it ran up so much last week and now it looks like traders are in uh buyers are in microsoft again let's take a look at microsoft strong correlation between hedging flow and price action note the rising hero line here and price responds let's go back to bookmap microsoft a double uh double bottom here at this 273 note all the green dots here aggressive buyers here and then price jumps higher up past the 275 level the high liquidity at that level straight to the 277 level then chops around lunchtime and now is moving higher to the 280 level and in question bartos asks do you trade options or futures or both uh i do trade both but when i this is just me when i trade stocks i primarily trade shares i i don't like to i'm a i learned to sell i learned to sell options that's how i learned to uh trade options so i'm a a seller of options i go for the high probability trades um i just can't deal with buying something that is losing value over time and then i again i generally prefer to trade stock these days um there's only so much that i can do for in a day and i think there is um so much opportunity in stocks and spot gamma hero and bookmap provide such an edge that i don't like to be confined to trading uh just the sb 500 futures uh so i have my uh stock trading platform up and if i want to trade the sb 500 uh i can trade spy shares so that's how i trade so day trading is primarily stocks with shares all right so that's microsoft let's take a look at invidia so note that all of these stocks that i've talked about today have been in play in play for quite some time actually for several for several weeks amd uh meta microsoft invidia and tesla is always in play always moving around quite a bit so uh really nice move in invidia today i'm going to zoom in just on this early move higher so we can see this opening here note the shift in order flow uh shown by bookmap here pink dots and then the showing the uh market sell orders right at the open and then the green dots come in and with market buy orders and price moves higher let's take a look at um at hero now to invidia note the strong hero signal here this is showing oops wrong tool this is showing how hero compares the hero signal today with the last 30 days that's shown by the entire length of the slider here and then also the last five days that's shown by the colored portion and note the dot here is on the far right indicating the hero signal today is almost as strong as it has been to the last five and 30 days so that is a bullish signal so let's go take a look at invidia now and strong correlation between hedging flow and price action separate outputs and calls and notice mainly calls driving traders buying calls shown by the rising orange line and rj you're welcome and he asked in discord would you ever sell options for any of these stock setups or buy options and right now my answer is no so for first of all i trade options primarily on the s and p 500 s and p 500 futures and spy and also spx so i trade options on all of those instruments the s and p 500 and again i may you know i may trade butterflies on spx and sell strangles on spy and and s and p 500 futures um i generally don't trade options with stocks i just don't i have an edge uh with the s and p 500 that's what i know how to trade um i'm i've always i've considered buying options on stocks but i just can't see um there's there are some advantages and disadvantages um i think the advantage is you can just buy you know buy a put buy a call uh with the shortest expiration and not have to worry about a precise setup and just let it play out if you have a good good feel for direction but you don't want to sit there and watch the chart and time your entry precisely uh so it's defined risk you can buy an option and then just move on to the next next instrument next stock but i for right now i'm buying shares buying buying uh buying or selling shares for stocks and then trading options on the s and p 500 futures spx and spy all right so great setup here in invidia call buyers and this is what you want to see uh if you're bullish on a stock this means that traders are buying calls market makers sell the calls and they have to buy stock to hedge their delta exposure and as price continues to go higher they have to continue to buy by stock to hedge their delta exposure since they're selling the calls so that's invidia and let's take a look at tesla and then we'll we'll take a look at fine a final look at the s and p 500 so here's tesla a pretty choppy day i thought much better trades in amd microsoft and invidia and of course the s and p 500 so let's go back to book map now we can take a take a quick look at tesla and then we'll go back to the s and p 500 and one thing to note here on tesla is the call wall has acted as uh expected resistance right at the open and then right after the announcement all right let's go back to the s and p 500 watch that for a couple minutes and then we'll wrap it up sorry so a quick move up then down and volume concentrated in this chart range here around the spot of the es 40 50 level and then also at the spx 40 10 level so 15 after 15 minutes after the announcement uh just chopping around i guess waiting again waiting for the press conference all right i'm going to wrap it up that's all i have for today so we saw the announcement saw the reaction let's just take one quick look at a hero and then we'll for s s and p 500 then we'll call out a day let's just zoom in and then i'm just looking at the entire day rolling window look back period and so far it looks like uh overall oops wrong tool options traders are taking negative delta positions all right that's all i have i want to thank everyone for watching for your questions and comments and i will see you tomorrow thanks again bye