 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, I'll book map the minimum materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk disclosure, treating futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. The focus of my presentation and the focus of the Options-Doug chat channel in Discord is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. It looks like I'm having a problem with OBS Studio and can someone listening and watching in YouTube confirm? Can you hear me? Can you see my screen? Alright, it looks like I'm good. Alright, thank you second wins. Alright, so as I was saying I have a two-step process for trading and the first is planning and I use positional analysis. I look at how trader traders and market makers are positioned at 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 and I look at real-time order flow and book map and real-time market maker hedging flow and spot gamma hero to confirm my thesis and for setups for entries and exits and when I talk about setups I will be talking about setups and an underlying asset analysis based on order flow and hedging flow and those setups can be taken any number of ways with futures shares of stock or options questions and comments are welcome and I will be watching both the options dash dog chat channel and discord as well as the options as well as the chat in YouTube for your questions and comments and for those of you who confirm you can hear me now thank you for the confirmation and YouTube that was an OBS studio that's what I use that's the software that I used to stream to YouTube so again thank you thank you all hello second wins hello karma effects glad you're all here right my agenda for today I want to go over news items economic data and events for and earnings for today as well as the rest of the week then I'll go through my positional analysis then I'll review setups from this morning and then I'll talk about the live market and when I get to the live market if anyone has any stocks they want me to take a look at please let me know and I will do that right news items so there was I guess some minor data that came out this morning PMI manufacturing data at 945 and 10 a.m. Eastern time I don't know if that was the cause of a drop but anyway the data today came in in line looks like it in line with expectations but PMI data still less than 50 so indicating contraction and then for the rest of the week AMD reports earnings after the market closes today and then on Friday there's more PMI data at 10 a.m. services PMI and then more importantly Apple and Amazon report earnings after the market closed so that's on Thursday and then Friday the big economic data for the week is the employment report at 8 30 a.m. Eastern time right so that is the news items for the week now let's go to my positional analysis I'm going to start with the S&P 500 this is the S&P 500 futures and book map ES futures and before I take a closer look at this chart I'm going to take a look at a larger time frame for SPX so this is SPX in a 30-day one-hour chart and it is SPX is really since last Friday been consolidating in a pretty narrow range between around 45 70 and 4600 so let me point out some levels on this chart may be a little bit difficult to see the dash purple lines are showing the lower and upper weekly expected move that's based on the options market and then the dash blue lines are showing the lower and upper daily expected move again based on the options market so that's what the options market expects for today and for the week let me point out some spot gamma levels now these are proprietary spot gamma levels I'm going to point out the key levels first of all the 4500 put wall the put wall is the strike with the largest net negative gamma that can be expected to act as support and that level has after oscillating around quite a bit last week seems to have stabilized at 4500 so that's the put wall that is the expected support level so there that is the potential floor for price the SPX and the next level up is the 4570 level 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 against price to hedge their delta exposure and that tends to enhance or increase volatility on the other hand above that level like SPX is trading now just slightly above 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 volatility and then the next level up is the 4600 level and that is the absolute that is the absolute gamma strike and that's the strike with the largest absolute gamma and note now the call wall has moved up to 4650 that's a strike with the largest net positive gamma and that can be expected to act as resistance so that level did move up from 4600 yesterday to 4650 today and this is what spot gamma has been forecasting is a slow grind up as call wall shifted higher and that's exactly what happened today both the call wall for SPX and spy both moved higher slightly SPX to 4650 and spy to 4462 all right so bullish shifts higher in the call walls for SPX and spy raising the ceiling for price action let's take a look at one other SPX chart we'll take a look at the levels that are in play for today this is SPX in a one-day one-minute chart we zoom out to get the entire day here so the key levels in play for today are first of all the lower daily expected move and then just right above that the volatility trigger at 4570 and those levels around those levels not precisely have acted as support today and SPX is trading in a very narrow range today I'll talk about setups in a few minutes that you know I guess the way I look at things there was really only one good good setup good short set up I'll talk about that again in a few minutes so here's the ES futures in book map I have my own cloud notes here and I'm showing the SPX levels there's the 4570 volatility trigger and note there is a difference in points a difference of price between ES and SPX and today I have that at about 24 points so that's why this SPX 4570 is actually at ES 4594 so I also have SPI levels on this chart there's the SPI 4570 gamma level that did act as resistance earlier today for that short setup in the morning and then here's the SPI 456 volatility trigger and price has moved up and down around that level for quite a while today now it looks like it may be acting as support and then just below that that's the lower daily expected move for ES and it's a little bit different for ES than SPX right so those are the levels in play today for the SAP 500 trading in a narrow range again and I talked about shifts and levels call wall and call walls for SPX and SPI shifted higher slightly all right let's take a look at NASDAQ so NASDAQ has been much stronger than the SAP 500 today let's take a look at some levels in play for today I'm going to go to a QQQ chart first so I'm showing round number levels for QQQ as well as SPOT gamma levels so the SPOT gamma level in play for today is the 383 volatility trigger and note that the 382 level did act as support earlier today and the 383 level has acted as resistance until price broke out above and now is trading down below excuse me all right so let's go back to the NASDAQ futures in bookbam I have my cloud notes for NQ as well so I'm showing the QQQ round numbers and the SPOT gamma levels are noted with a different color here white with a red number there's the 383 volatility trigger that did act as resistance earlier here's the 382 level acting as support and then the 381 level also acting as support in the morning right so those are levels in play for today for the S&B for the NASDAQ QQQ round numbers have definitely been in play for today as well as the NQ round numbers the zeros in the 50s and for NASDAQ the volatility trigger volatility triggers for NDX and QQQ did move higher so minor shifts in levels for NDX and QQQ volatility triggers shifted higher the call walls and absolute gamma strikes remain at their current levels no changes there and for all the index products there were no changes to the put walls all right Danilo ask how can we get gamma levels hello gamma levels these SPOT gamma levels are available to SPOT gamma subscribers so if you subscribe to SPOT gamma any level of subscription you should be able to have access to these to these notes SPOT gamma does provide cloud notes I prefer to use my own notes I can keep the ESSBX price difference up to date closer to the actual level as well as show spy levels QQQ levels other levels that I want to show so I just have one level of one column of notes here it does take some work on my part but I prefer just to have one column but if you want the cloud notes from SPOT gamma with the SPOT gamma levels you need to subscribe to SPOT gamma so I hope that helps all right so those are the levels in play for today for NASDAQ shifts and levels minor and note for the SB500 head has really been after the initial moves up and down been chopping at a range somewhere in the middle of the range where the whereas the NASDAQ has been chopping around at the upper end of the range and testing the 383 volatility trigger a number of times all right let's take a look at gamma notional and see how market makers were positioned on the gamma curve at the beginning of the day is what I want to take a look at again market makers position on the gamma curve and this gives us an indication of how market makers may have to trade with changes in price and applied volatility and this is showing gamma notional market makers position on the gamma curve for SPX spy and DX and QQQ and note for SPX and spy the numbers are both positive at the beginning of the day market makers position on the gamma curve was positive although it was slightly less positive for SPX than yesterday minor shift lower and then for spy the numbers shifted from negative yesterday to positive today so pretty neutral for spy and then for QQQ the numbers shifted from slightly positive yesterday to slightly negative today so our overall though a very neutral gamma notional position and in this type of environment that leads to a lot of range days not if gamma notional was I guess very negative for these indices then that would lead me to look for more trending days wider range higher volatility on the other hand like today I was looking for lower volatility and more of a range day alright so that is the that's my positional analysis again my thesis for the day was excuse me looking for lower volatility range day and slightly bullish directional bias based on the shifts higher in the call wall call walls for SPX and spy alright let's take a look at some setups now I'm going to start with the hero signal for the S&P 500 what this chart is showing is SPX price this is from spot gamma this is the hero indicator hero stands for hedging impact real-time options so it's showing price for SPX and options trades and market maker hedging activity for a combined signal of SPX spy XSP and ES futures all combined into one signal and note this number is slightly negative for the day but has been trending higher since around 11 a.m. Eastern time alright let's take a look I'm going to zoom in on this now I'm going to focus on the the morning session the the setup that I pointed out this morning just right around 10 a.m. and this was a divergent setup that I really like so heroes started moving lower so traders were taking negative delta positions and market makers when traders take negative delta positions market makers are taking the the opposite side of those trades and they have to sell futures to hedge their delta exposure so trader started taking negative delta positions as the S&P 500 price was moving higher and let's go take a look at book map and see what happened back to the S&P 500 I'm going to zoom in so this is the setup that I pointed out and the it's the reversal around the 450 spy 457 zero gamma level right here note the trend break and there's not quite a retest of that level you can see all the aggressive sellers starting to come in a shift in green dots as prices moving up and aggressive sellers shown by the pink dots those are market buy orders buy minus sell and price breaks the trend does a retest of the 457 level doesn't quite hit it it looks like it may be a tick off and then moves lower as aggressive sellers and options traders take price all the way down to the 4570 SPX volatility trigger and note that this move lower was fueled by sell stop orders shown by the falling yellow line as well as aggressive sellers shown by cumulative volume delta and you can just see the the bearish order flow there in in book map well again all the pink dots fueled by sell stop orders and note that as price drops larger traders start to come in with iceberg orders I like to look at these in the sub chart in some mode so I can see the trend of iceberg orders and I can see the events here with the on-chart indicator so I can see that larger traders are starting to come in buying ES with iceberg orders and price moves higher let's see what options traders were doing then let's go back to hero so this is around 1020 hero starts to rise as price moves down to around that SPX 4570 level options traders start taking positive delta positions and market makers are buying futures to hedge their delta exposure and price moves higher and note this has set up was very similar to yesterday so today the timing was a little bit different so in my notes for today I have a divergent short at 1005 and then a divergence long at 1020 so that's what I just talked about the divergence short 1005 and divergence long at 1020 after that quick drop lower these are my notes from yesterday a divergent short at 945 and divergence long at 10 so the timing was a little bit different yesterday but the setup just the same quick drop and then as options traders are taking negative delta positions and then options traders quickly come in and start taking positive delta positions as price moves lower and price reverses higher zooming out trying to get the entire RTH session here so this is the the cash open at 930 let's see what traders are doing now take a little bit dig into this a little bit and this is pretty typical this rising orange line shows that traders are buying calls today note the number is positive traders buying calls and they're also buying puts that shown by the following blue line as well as the negative number here so they're buying calls and buying puts the put number is larger minus 3.7 billion versus the call number at positive 2.7 billion put buyers more aggressive and net the number the total number is just around just slightly less than minus 1 billion so so far for today traders are taking negative delta positions net in the S&P 500 let's go back to book map so again this led to a couple of good setups here the short especially that I pointed out very easy read in book map the order flow very easy read and then long as well as aggressive buyers start to come in larger traders buying with iceberg orders and traders taking positive delta positions alright since then yes B500 again chopping around kind of in the middle of the range for today let's take a look at NASDAQ NASDAQ let's go take a look at hero see what options traders are doing so for NASDAQ I'm going to take a look at a combined signal for NDX and QQQ so similar to the signal for S for the S&P 500 this is a combined signal and not as easy to read as the S&P 500 for sure today I'm going to zoom in on this and see if we can zoom in and get a little bit more clarity so looking at this for the first hour or so it becomes a little bit more clear this divergent short pretty similar to the S&P 500 just around 10.05 then hero starts to rise doesn't rise long but starts to rise and then price follows a few minutes later let's go take a look at book map now go to the NASDAQ I'm going to zoom in sorry it'll take me a moment to adjust my screen here right so here's the short setup right around 10.05 10.10 you can see the shift in order flow aggressive sellers start to come in you can see all the the pink dots there as well as the falling CVD line that's the pink line and then the move lower fueled by sell stop orders and just like the S&P 500 larger traders start to come in with iceberg orders shown by the following light blue line you can see the iceberg orders there buying on the way down that's pretty typical and then price test 381 QQQ 381 a couple times and then finally moves higher as aggressive buyers start to come in and options traders started taking positive delta positions right so obsessed ask what is hero again hero is actually H I R O that is hedging impact of real-time options and that is available from spot gamma with a spot gamma alpha subscription and that is showing options trades and market maker hedging activity for a variety of instruments indices as well as single stocks and one of my key tenants is that options trades and market maker hedging activity are key drivers of equity index products especially ES and NQ not every day not not all the time every day but often enough that it is a very important driver of price action I've shown that over and over again and also for many single stocks traders are very actively trading options in the stocks that I follow and options trades and market maker hedging activity is a key driver of price action for these stocks and hello Loki glad you're here right so obsessed I suggest you know if you have more questions about hero go to the spot gamma website go to the spot gamma YouTube channel watch my live streams every day I talk about it every day right so there's the short setup and the long setup and NASDAQ since then NASDAQ has been quite a bit stronger than the S&B 500 all right let's take a look at some stocks I'm gonna start with AMD since it is reporting earnings since it reports earnings after the close let's start with AMD AMD has been strong today let's take a look at hero and see what options traders are doing let's go to AMD so what this showing it's a little bit choppy we'll zoom in on this so obsessed this should should help this is showing and then met as a much better example today we'll see in a minute so what this chart is showing is overall net for the day traders are buying calls this number is positive the orange line is rising traders are buying calls when traders buy calls market makers sell the calls and they have to buy stock to hedge their delta exposure they want to remain delta neutral and this is a very reliable driver of price action again and many stocks especially these large cap tech stocks that I follow so they are they are buying calls they're also buying puts but the number for calls is much higher 69 million versus nine negative 9 million for puts so net for the day they're taking positive delta positions and market makers are buying stock to hedge their delta exposure and note that 115 is the key gamma strike and again call buyers are buying calls ahead of earnings let's go back to book map 115 is the key gamma strike and price chopped around that level and then finally moved higher let's see where AMD may be headed liquidity a lot of liquidity resting sell orders and the order book at 118 a little bit less than 119 and then quite a few at 120 and note the liquidity that came in to the order book right but right before 1230 at the 116 50 level they were looking to get filled with limit buy orders at 116 50 and price was too strong they were they did not get filled and we'll go back and see go back to hero look for other spot gamma levels so 120 is the call wall that's a strike with the largest net positive gamma and that with all the liquidity that level that could be an attraction for price all right so victor Ben says still a cell divergence on socks now do you mean the semi conductor conductor index or SPX is that a typo or do you mean socks I don't I don't recall seeing socks and hero maybe I'm wrong all right so that's AMD let's take a look at meta and meta here's a very clear example of how options trades can drive price so in meta traders are buying calls shown by the rising large line the positive notional value and they're also selling puts and that is shown by the rising blue line and the positive notional value for puts as well so when traders are buying calls and selling puts traders market makers are taking the opposite side of that and they have to buy stock to hedge their delta exposure let's go back to the total signal and notice how when it this hero signal levels off price levels off very strong correlation between hedging flow and price action now it looks like meta babe may be rolling over a little bit call wall up above at 330 all right let's go take a look at book map and we'll we'll get back to victor bill will we'll get back to SPX in just a few minutes when we take a look at the live market so let's go back and AMD still very strong today here's meta great move higher this morning as traders were buying calls and selling puts then finally some aggressive sellers start to come in at 324 as options traders took their foot off the gas and now price is moving lower so again meta for those of you may not be familiar with this concept a great example of how options trades can draw can drive price let's take a look at Microsoft not quite as clear but not a not a straight line straight trend up let's see what I've been traders are doing but definitely buying calls so here's another example and Microsoft traders are buying calls and selling puts both numbers are positive and price reverses higher right around 10 20 as traders stop buying puts they start selling puts and they resume buying calls and price moves higher let's go take a look at book map so here's the reversal let's zoom in on this as traders again stopped buying puts started selling puts and they resume buying calls reversal at right around 334 price jumps pretty quickly up to 338 let's go back to hero and see look for gamma levels in place so there's the 340 call wall and the key gamma strike so potential target right so obsessed as there's a lot to learn with this thing I'm still learning how the Greeks work and to take your time this is something that take does may take a while to grasp I would again recommend the spot gamma website I think they have an excellent support center with basic information about the Greeks about strategies as well as their proprietary levels and also hero so free go to the free resources on the spot gamma website great information that that should help but again take your time this is something that may not be easy to to grasp but it once you once it you start to see it it starts to make a lot of sense all right so traders buying calls and selling puts and driving my Microsoft price higher and there was something else I wanted to take a look at let's go back to book map take a look at Nvidia there was some question yesterday about traders pulling liquidity adding liquidity fills at different levels so this may not be the the greatest example let's see so the this I'm going to look at the heat map here so this is an example of traders pulling liquidity and then adding liquidity at different levels so this again not the greatest example notice how this is the heat map showing a history of orders limited orders in the order book notice how some of the liquidity has pulled at this level traders some of the traders do not want to sell at this level anymore and there's a slight shift in liquidity right right there it's probably impossible to see so they they are taking some of those sell orders away and then they're adding here so they're deciding now they don't want to be filled at forty six seventy four four six seven fifty and four sixty eight they want to be a be filled at four sixty nine with their sell orders so when this happens and you know it again it's difficult to see here this is a when traders are pulling orders that is an indication of price may move higher and you would also like to see more and Bruce director of education that book map talks about this quite a bit you would also like to see the buy orders coming in like like this one right here helping to move price higher right so that's Nvidia overall strong day for Nvidia let's just go take a look at here it was pretty choppy go to Nvidia zoom in on the morning this reversal higher so options trades are typically a pretty strong driver of price action in Nvidia and notice that traders initially from the open were taking negative delta positions and then as that slows down and starts to rise Nvidia price starts to rise so the hedging flow shifts from negative delta to positive delta and Nvidia moves higher right so obsessed ask does that accumulate calls and puts of strikes on the day does it account for longer term options buys or just zero DTE so we can listen let's go back to the S&P 500 to answer that question so an S&P 500 for SPX spy and ES I don't I'm not sure about XSP their options that expire every day zero DTE and weeklies monthlies so we can take a look this is showing all expiration all trades this is all expirations and we can turn on the next expiry so that is showing options that expire today now if we did this in a stock it would be showing next expiry that would be the Friday expiration for stock single stocks they have options that expire once a week every Friday as well as the monthly expirations and again for the S&P 500 SPX spy and ES have options that expire every day so this green line is showing the zero DTE trades and let's just turn off all trades and just look at zero DTE so this is pretty clearly a strong driver of price action today the zero DTE trades in the S&P 500 you can see the the divergence short divergence long and then options traders continue to take positive Delta positions in the S&P 500 and then we can refine this even further looking at puts and calls so they are in zero DTE they're buying calls and buying puts call buyers a little bit more aggressive all right so obsessed this is showing zero DTE these are options that expire today they will have no impact on open interest so that the just based on the zero DTE trade this will have no impact on the spot gamma levels again these expire at the end of the day and then the all trades you know if these trades are not closed at the end of the day then they could have an impact on the spot gamma levels so the spot gamma levels that I talked about in my positional analysis are based on gamma weighted open interest all right so Victor been earlier mentioned the the divergence in SPX we'll take a look at the S&P 500 talking about a sell divergence and then we'll take a so this is the combined signal total signal let's just zoom in on the last few minutes again looking at the the total all expirations here that is the divergence lower and price is moving lower let's see where price was when traders started taking negative delta positions we'll go back to book map right so obsessed the spot gamma levels are based on open interest but they're again they're gamma waiting they have their own proprietary algorithms that they use to develop these levels so the the raw data that they use is open interest that comes out once a daily some sometime during the night so they get that data applied their proprietary algorithms to come up with the the key levels that I talked about earlier the the put wall the call wall the absolute gamma strike the volatility trigger the basis for that information the raw data is the open interest all right so it looks like S&P 500 approaching the 457 zero gamma level and let's options traders started taking negative delta positions and note that larger traders also starting to sell with iceberg orders as price approaches that level and obsessed it says taking negative of delta or positive delta has to learn exactly how market makers edge with stock because that's new that's interesting yeah it is key driver of price action and and many stocks that's why you can see the stocks that I follow here in book map that's the magnificent seven plus AMD plus QQQ and spy spy all have very active options that are key driver of price action let's go back and look at hero so this is interesting good spot Victor been finally playing off this is a setup that I like watching a divergence in hero so price is rising up to a level that you expect to act as resistance that may act as resistance so we know that 457 was a resistance level earlier today price doesn't quite make it up there today and options traders start taking negative delta positions and larger traders start coming in with iceberg orders sell iceberg orders and price moves lower very nice divergent setup great spot Victor been let's go back and take a look at a hero so there's the SMB 5 run there's 500 there's the divergence right let me check for questions yeah gamma is the rate of change of delta and open interest is different from volume so again open interest those are orders that are held those are open positions and volume is the the volume for today so let's take a look at let's go to SPX go to an options chain let's go to let's go to Friday expiration so this is Friday expiration so it may be hard to see I'm showing volume and open interest so this number will not change during the day it only changes overnight this these numbers will be different so they'll change tomorrow as the open interest data is updated with the latest positions these are positions that are held open positions and then the volume is what's traded today so these numbers will change the volume numbers will change constantly during the day let's see we can go to the so notice here the the volume on the left open interest on the right the open interest numbers will not change today and these numbers will change constantly during the day so that's the volume of contracts bought or sold those are calls right so there you go there's the difference between open interest and volume let's go back to the SMB 500 check on that that setup zoom in a little bit more here so price reversed lower just below the 457 zero gamma level let me just check a spy chart to make sure that is accurate that yes the spy ratio may change some during the day yeah that is right so price spy did not quite get to that level before reversing lower right so obsess says open positions got it so would float be something to look at in confluence no I don't think so I don't look at float that's not something that I look at I just stick with stick with options here alright my time is up I want to thank you for your questions and comments thanks everyone for watching remember AMD reports earnings after the close today alright again thanks for watching thanks for your questions to comments and I will see you tomorrow bye