 Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 PM Eastern Time. Hello, JEC, and thanks for the confirmation about the audio. Before I get started, let me 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 and the focus of the Options-Doug chat channel in YouTube and Discord, I'm sorry, 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. I have a two-step process for trading at first as 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 training range and volatility for the day as well as a directional bias. And the second step of my process is execution. And I look at real-time order flow in Bookmap and real-time market maker hedging flow in SpotGammaHero 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-Doug chat channel in Discord and the chat and YouTube for your questions. So again, please post questions and comments. They are welcome. All right, let's get started. So the agenda for today, what I want to talk about is economic data and events for today as well as the rest of the week. And then we'll go through our positional analysis and then we'll talk about setups. So first of all, the news economic for today, the big news was the CPI data that came out at 8.30 a.m. Eastern time. And you can see that all of the numbers came in as forecast or in line with forecast except for one. Let's see where it was that. This US core CPI, month over month, a little bit hotter than forecast and previous. Otherwise, all the data was in line with forecast and lower with the previous numbers, lower than the previous numbers. All right, so the market initially had a bullish reaction to that data. All right, so that was today. Tomorrow the PPI comes out at 8.30 a.m. Eastern time. Thursday, jobless claims and there's a few other pieces of data. And then finally, Friday is the big options expiration. The monthly options expiration, that is also the quarterly expiration. And usually those quarterly expirations are large expirations. All right, one thing that I want to take a look at. Let me just refresh this page. We looked at this yesterday. This is the Fed watch tool. And this changes constantly throughout the day. And what this is showing is the current Fed funds rate. And the current target rate is 450 to 475 basis points. And this is showing right here, right now, a 30% chance of zero increase at the meeting next week. So again, a 30% chance of maintaining that current level and then a 70% chance of a 25 basis point increase. And then there's a 0% chance of a 50 basis point hike. And that a couple of weeks ago, that was not zero. And actually, here one week ago, that was at close to 70% of a 50 basis point hike. So a week ago, 70% chance of a 50 basis point hike. 30% chance of a 25 basis point hike. And 0% chance of no hike at all. So big, big shift in outlook for the Fed funds rate. All right, let's take a look at our charts now. We'll take a look at levels. So we'll start our positional analysis. And let's start with the S&P 500. This is the ES futures. And notice I have the June contract up, the M contract. And before I dig into this chart, I want to take a look at a larger time frame. And we're just going to look at the SPX. So this is a 20 day one hour chart. And Thinkorswim just showing price for SPX and the key gamma levels from Spot Gamma. And these levels are provided to Spot Gamma subscribers in a ThinkScript. And this is something that you do have to update manually, but it's provided for you. It takes a couple of minutes. And this is showing, again, just SPX price and key levels. And let's take a look at the levels that have been in play for the last few days. So here's the put wall at 3800. And note yesterday that there was SPX, did not quite make it down to the put wall at 3800, but reversed higher just above that level. And then here is the 3850 level, the 3900 level, that has been in play for today. And then here's the volatility trigger and a resistance level up at 3950. And then there's the 4000 key gamma strike. So those are the levels in play. Again, that's a 20 day one hour chart. And now let's take a look at another Thinkorswim chart. This is just looking at today. This is a one day, one minute chart, again, for SPX, just showing the levels that are in play. And here's the 3900 level. And that was noted as resistance. But there was a note in the AM Founders note that we'll take a look at in just a minute. And then here's the 3950 level above and the 3960 volatility trigger. And in just a minute, I will look at, I'll go into what these levels are in more detail. OK, I just want to point out one note that was in the Spot Gamma AM Founders note about the 3900 level. And that's this note right here. And this is just a snippet from the Spot Gamma AM Founders note that is full of very useful information and noting that the 3900 level must be recaptured for the bulls to have some measure of relative safety and looking for 3950, a test of 3950, if 3900 is breached. So that appeared to be what was happening this morning until JEC notes, news about a Russia crashing into a US drone. OK, thank you, JEC. So definitely a news-driven market as usual. All right, so let's take a look at, so that was that note. And this is what happened this morning, is a break above that 3900 level. Let's take a look at book map now. And again, this is the ES futures, SAP 500 futures. And this is showing the levels, the same levels. Let me just scroll up a little bit here. Same levels that are in play, just shown here in Spot Gamma Cloud Notes. And these are also provided to Spot Gamma subscribers. And I have them in this column here. These are Cloud Notes that are updated automatically. They're showing key gamma levels for SPX and also combo levels for SPX and SPI. So there's the 3950 level that was noted as resistance in the AM Founders Note. And then there's 3900, which was also noted as resistance. But again, we saw the note about 3900. And then there's a combo level that combines SPX and SPI levels into one level that is converted to an equivalent SPX number and then converted to an equivalent ES number. And right now, Spot Gamma is using a 40-point difference between ES and SPX. And I calculated about a 36-point difference, as JEC did, as well. So I'm showing my levels just a little bit lower unless we can zoom in and see that. So right here, here is my 3900 level. And then there's Spot Gamma's 3900 level, just four points above. And I'm also showing key SPI levels. So that 390 is the SPI key gamma strike. All right, so those are the levels in play in the S&P 500. And this was a great long setup this morning. And when we look at the data, in just a moment, we'll see why. So this was definitely supported by order flow and market maker hedging flow shown by Spot Gamma Hero, as well as the large amount of gamma notional leading to a put-van rally. So we'll look at the S&P 500 setup in just a couple of minutes. Let's take a look at the data. So we'll finish up our positional analysis. And then we'll look at the S&P 500 setup in more detail. So let's start with the S&P 500 charts, the gamma level charts. And this will show where that data, those levels that I was just talking about, show where those levels come from. So this is SPX. These are gamma levels, absolute gamma levels. And this is market maker's position at these strikes. This is the zero level. And above that level, that's positive gamma, or call gamma, shown by the black bars. And below the zero level, that is negative gamma, or put gamma, shown by the teal bars. And this is showing, again, this is SPX. Showing that 4,000 key gamma strike. That's the absolute gamma strike, or the key gamma strike. And the strike with the largest absolute gamma. And that can act as support, resistance, or a magnet for price. And then 3,800 is the put wall. That's the strike with the largest net negative gamma. And that can be expected to act as support as it did a couple of days ago. And then the call wall is still at 4,200, which is out of range of this chart and definitely not in play. So there's the 3,800 put wall and the 4,000 key gamma strike. And then note, the dominance of put gamma below 4,000, but there is some called gamma, positive gamma, at that level, below 4,000, from 3850 up to 4,000. But the dominance is put gamma. Put gamma is dominant. So that's SPX. Let's take a look at SPI. And these are the absolute gamma levels for SPI. And for SPI, 390 here is the key gamma strike or the absolute gamma strike. 380 is the put wall. Again, the strike with the largest net negative gamma. And that can be expected to act as support. And then the call wall remains at a rather strange 430, well out of range. And the call wall is the strike with the largest net positive gamma. And that can be expected to act as resistance. And note, just like SPX, the dominance of put gamma below the 400 level, and especially at the 380 to 390 level. That's SPI, the absolute gamma level. So again, that's showing where the call wall, the key call wall, put wall, and key gamma strike come from for each of these and what they mean. And then here is the combo levels. And this is combining SPX and SPI gamma levels into one number and an equivalent SPX number. And then shown on this chart, again, positive above the zero line and negative below. And this is showing here, this is a good way to spot the gamma flip level, which is the volatility trigger. That is spot gamma's proprietary gamma flip level. Below that level, and it's obvious here, market makers position on the gamma curve is negative. That means that traders are long puts, market makers are short puts, and market makers have to hedge their delta exposure in the direction of price in a negative gamma environment. And so as price decreases, they will have to sell futures to hedge their delta exposure. And if price increases and implied volatility drops, they can buy back their short futures. So this is showing that gamma flip level at around 39.60. So there's the volatility trigger for SPX. And pretty obvious, all the put gamma below and a very little call gamma above. And there's SPI. So this is combo strikes, SPX and SPI converted into an equivalent SPI number. And then there's that gamma flip level right around 395, the volatility trigger. All right, so there's a question in YouTube. I'm just a beginner. What does the gamma levels mean regarding trading? What is a call wall? What is a put wall? So I just, I cover that briefly. The put wall is the strike with the largest net negative gamma that can be expected to act as support. And the call wall is the strike with the largest net positive gamma. And that can be expected to act as resistance. And for further information, I would urge you to go to spotgamma.com, go to this free resources, and you can go to any one of these for more information. Go to the pre-training definitions in terms and FAQ and support center. So just go to spotgamma.com for more information. All right, so we're back on the gamma levels now. So that is, again, we're just showing where those levels come from. Here's the NASDAQ. And for the NASDAQ, we just look at QQQ. So for QQQ, the put wall has dropped down now to 280. Again, the strike with the largest net negative gamma. And the key gamma strike remains at 290. And the call wall is up at 310. And just like the S&P 500, there's a dominance of put gamma below this key 300 level. All right, let's take a look at the data now. And as usual, I like to look at the gamma notional. This is market makers position on the gamma curve for SPX in the left column, SPI in the middle column, and QQQ in the far right column. And notice all these numbers are negative and they're still quite negative. These are pretty extreme readings based on my experience and what I've seen. So this indicates, again, in a negative gamma environment, traders are long puts. Market makers are short puts. And they have to sell futures to hedge their delta exposure as price decreases. And if price increases and or implied volatility drops and they usually go hand in hand, then market makers can buy back their short hedges. In the case of this very large gamma notional that we see here, this can fuel a negative gamma VANA feedback loop on the downside. As price drops, market makers delta notional increases and they have to continue to sell futures and that can hedge their delta exposure and that can create a feedback loop. And then on the other hand, if price rises and implied volatility drops, those puts that traders, and we'll look at the VIX chart in just a minute, those traders paid high prices for puts and they can lose value quickly and most likely they're buying puts that either expire today or at the end of the week and do the effects of VANA and Charm, the change in delta with a change in implied volatility for VANA and the change in delta as time passes due to that's Charm. Due to those effects, those puts will quickly lose value. Traders may be taking profits or there's puts or losing value. Market makers delta notional will decrease and they can buy back their short futures. And that was what I was looking for this morning and I think probably quite a few people in Discord were looking for that as well. OK, so that is gamma notional so I think it's always important to know how market makers are positioned on the gamma curve at the beginning of the day. Let's take a look at the VANA charts now which illustrate this graphically. So this is SPX and this is showing how market makers delta notional, delta exposure, will change with changes in price. So delta notional is shown on the vertical axis. Price, strike price shown on the horizontal axis and this green curve is showing how market makers delta notional changes with changes in price and implied volatility. And again, that's the VANA effect, the change in delta with a change in implied volatility. And what this is showing is that market makers delta notional will increase as price decreases and again they have to sell futures to hedge their delta exposure. And then the black line is showing how that delta notional changes as time passes and that's the charm effect, the change in delta with as time passes, a change in time. So that's SPX and let's take a look at SPI and a steeper curve, remember gamma notional was about three times as negative as SPX for SPI and then there's QQQ and then I forgot to mention let's go back and look at the data again and I forgot to mention the changes in these levels. So yesterday and these levels today became slightly less negative than yesterday. So gamma notional for SPX yesterday was minus 10.83 and today it is minus 873. So still very negative but slightly less negative and for SPI, gamma notional yesterday was minus 3000 and now today it is minus 2824. So again slightly less negative and for QQQ yesterday, gamma notional was minus 916 and today it is minus 695. Finally, let's take a look at, this is my key gamma strike list and I track this every day. This is just a very simple list of the stocks of my watch list and the key gamma strike and I compare the key gamma strike for today that's shown in the D column with the previous key gamma strike that's shown in the E column. So that's from yesterday and then I compare the number from yesterday to day and then I color coded green if the number increased and this is generally a bullish signal. If that key gamma strike increases, you know, I take that as a bullish signal and I will generally go into the spot gamma equity hub and do further investigation to see how the other levels changed. The call wall, put wall and hedge wall, I'll see how those levels changed. So this is bullish for AMD and Snowflake and then also bullish for VIX which is not necessarily a good thing for the bulls is there was a build in an interest in building call positions at higher levels in VIX. Okay, so given all that, this is all of my preparation, my positional analysis and my thesis for the day was bullish. After the data came out in line with expectations a little bit less than the previous numbers seeing the bullish reaction on the market before the open, you know, definitely bullish and looking for that put Vanna rally. So again, remember that traders the last few days let's just look at VIX and traders were paying extremely high prices for puts and this is at the open yesterday and VIX continued to fall throughout the day and was falling until about 1130 or so today but you know, traders were buying puts this is indicating implied volatility. So implied volatility, you know, I use it as a proxy for implied volatility there's actually an equation behind VIX but I use this as a proxy for implied volatility and the higher than implied volatility that indicates the higher demand for puts in this case and when there's a higher demand, what happens? Price increases and then this is indicating basically those puts that traders bought way up here I have been losing value, right? So that's VIX, right? Let me check for questions. So Roomba asks falling prices increases the delta being short puts making the market makers decrease their delta by shorting puts that's almost correct. They decrease their delta by selling futures. So they are traders are buying puts, they're selling puts and as price decreases their delta notional increases selling puts is a positive delta position and they hedge their position by selling futures. All right, I'm looking at JEC's lengthy question, comment and discord. JEC, I'll have to, that's a rather lengthy comment question I'll have to read that in more detail later or read that slowly and take a look at it. All right, so let's go back and let's take a look at setups now. All right, so this is the, this is Spot Gamma Hero and this is showing the hedging impact of real-time options. So this is, again, that's what Hero stands for and this is for the S&P 500 showing a combined signal of SPX and SPY options trades and then market makers hedging activity. So that is SPX and SPY and this is what I look at whether I'm trading ES, whether I'm trading futures, SPX options, or SPY shares or options. Any form of the S&P 500, this is the signal that I look at and Spot Gamma does provide separate signals for SPX and SPY and I like to look at the combined signal here. So let's zoom in and take a closer look and notice that this signal has been, is continuing to rise and this is the, this is at the open when most traders start, I think the SPX options do trade before 930 but generally the volume comes in at 930. So showing the sharp increase, positive delta positions, a rising hero line means that traders are taking positive delta positions and that continues to rise and that was definitely a good signal for a long this morning along with the bullish order flow and book map that we'll look at in just a minute. Let's zoom in on this a little bit. So this is starting here at 930 AM and let's take a closer look and see what traders were doing. So the first thing that this, that we can do is separate outputs and calls and this shows this rising orange line shows that traders are buying calls and the way this works is when traders buy calls, market makers sell the calls and they have to buy futures to hedge their delta exposure and note the number here, this notional value for calls at 1.5 billion versus about 500 million for puts. So again, traders were buying calls and puts but the calls were dominating about three to one over puts and that was helping to drive price higher and another thing that we can take a look at is this. So remember these numbers, 1.5 and 544. Let's take a look now at the, and this is all expirations that we're looking at right now and let's take a look at the next expiration total and I'm gonna have to zoom back and I don't know if I have quite the same all trades and I'm gonna have to zoom again, sorry about that. Put some calls, okay, sorry. So anyway, what this is showing is this call number here is about half of what we just saw with the all trades, all expiration signals. Whereas this put number is actually larger. So what this indicates to me up until at least this time is that traders may have been building longer term call positions, at least longer than zero DT, longer than what's going to expire at the end of the day. So it looks like they may be buying puts that expire today, but they may be buying longer term calls that they will hold for more than one day. So that could be a potentially a bullish signal. So let's clean this up. Actually, I'm gonna zoom out. So they continue to buy calls and they've stopped buying puts but price is going down and this is the zero DTE signal. Let's just go back and look at a simple signal now here, just all trades and I'm gonna focus on the morning. And so there's the morning session, definitely a bullish signal from Hero. And now let's go take a look at book map. And I'm gonna zoom in on the morning from after the data until about noon. So notice again, we know that traders were buying calls and that's bullish. And then starting at the RTH open here at 9.30, that just the trend continues. Nice steady uptrend. Note the rising, steady rising orange line and that is showing buy stop orders helping to fuel the move higher. And also the slight increase in iceberg orders shown by the light blue line showing the larger traders are buying. And then overall cumulative volume Delta shown by the dark line, dark blue line is also rising. So nice, steady uptrend in the S&P 500 driven by call buyers as well as the put banner rally that I just talked about. So great long set up in the morning, multiple entry points pullback, pullbacks to the first of all, if you were trading before the RTH open, jump up, retest of VWAP, pause here at the 390 spy, 390 key gamma strike and also the SPX 3900 level and then price moves higher until about 1130. All right, so yesterday I thought the best setups were in in some of the big cap tech stocks. And I think it was just kind of the opposite today. The easiest, best, most easy to read setup was in the S&P 500 today. And JEC asked, do you feel it was a put banner rally more than the impact from the large call positions? Or I think it's both. I mean, there's hard, you can't really know which was the key driver, but I think they both certainly contributed. And then there's a question, is the put wall still at 3,900? And no, I assume you're talking about the SPX put wall and that is at 3,800 and that shifted down to 3,800 on Monday from Friday. From Friday it was at 3,900 and it shifted down to 3,800 yesterday and it remains at 3,800 now. So 3,800 is the put wall. All right, so nice steady uptrend. And again, one thing to keep a look at is this, or keep an eye on is VIX. So let's just zoom in on today. So you can say up until about 11, 30, 12 o'clock that that put banner rally was definitely contributing to the increase. And now that effect, that fuel may have leveled off a bit with the increase in VIX. All right, so that's the S&P 500. Let's go back and take a look at a hero. And traders continue to, by cause, the puts line has leveled off and that's pretty interesting. So based on this, I would say that to answer your question, JEC, we see the call line continuing to rise. And just as before, that's kind of a steady uptrend, price decreases about the same time that VIX ticks up. So I would say based on this, that rally this morning may attribute that more to the put banner rally rather than these calls, or rather than the call buyers. All right, so actually let me, let me change that back to the total signal. So hero continues to rise, prices continues to fall. Okay, that's the S&P 500 great long setup in the morning. And now let's take a look at some stocks. Here's Apple. And I thought this set up a, this set up a nice short. This gradually decreasing hero starts to fall about 1230 or, you know, fall quicker about 1230. So let's go take a look at Apple in book map. And RJ asked does zero DTE, intraday usually dominate order flow for SPX. And often it does, it's always a key component. But if you have access to hero, you can see for yourself. You can just, you know, compare the, when we get back to hero, I'll show you, you can compare the, the notional value for all explorations versus the zero DTE to see what it, what sort of effect it had. So again, we were looking at Apple now and here's the short set up. And note here, I'm doing an experiment with these volume dots. I just want to see if this adds any, any clarity. And I'm showing now total volume. And typically I've been looking at this volume delta by minus cell, the delta again by minus cell, which is shows the separate pink and green dots. And you know, again, this is just an experiment to see if I, I see any clarity, any more clarity with these total volume, showing this kind of pie shape chart with the total amount of buys and sells in a single dot. So I'm gonna try that for a few days. So there's the, there's Apple and you had to wait for this. So we know that Hero is sloping down. Just look for the reversal. There's the trend break, a retest of this 153 level. And then price starts is making lower highs. And there's your short set up in Apple. All right, so that's Apple. And let's take a look at AMD. And AMD was very strong in the morning. Let's take a look at, at Hero. So there was a strong, just in the first half hour, strong confirmation for a move higher over the first 30, 45 minutes. Looks like about 30 minutes there. And now Hero is trending lower but price is holding pretty steady. All right, let's take a look at MetaNel. And this was a much cleaner signal for a long. Let's see what traders are doing. So up until about two o'clock, they were buying calls and they started, they stopped selling puts around a little bit before one o'clock and they started buying puts. All right, let's go take a look and notice the strong correlation. Hero rises, price rises, Hero falls, price falls, and then Hero ticks up again and price increases until Hero levels off and starts to fall. So very strong confirmation correlation between options trades, hedging flow and price action. Let's go take a look at Meta. So very, very bullish price action in Meta here. And notice here that this Delta setting for the volume dots is very easy to read for Meta today. I mean, you can see the clear shift, for example, right here between the pink dots showing again this is by minus sell. So this is indicating that sellers, aggressive sellers with their market sell orders are dominating price. And then when there's a shift to the green dots that showing that market buy orders are dominating and there's a clear shift that trend break, market buys, aggressive buyers come in with their market buy orders and start to move price higher. And remember that Hero was rising, the options traders were taking positive Delta positions as well. So I think this is one of the best, if not the best equity setups that I saw today. And let's take a look at Microsoft. All right, let's go take a look at Hero. Let's Meta, look at Microsoft. And sometimes these large block trades come in and kind of obscure the signal. That's what this vertical line means is a large block trade and institutional trader will come in. Let's see what they were doing. So they were selling puts and selling a large number of puts that causes that line to jump straight up. So let's take a look at before and after so we can get a cleaner signal. So this is up until about 11 o'clock. Very steady rise in Hero here. And this is providing good pullback settings with Hero steadily rising, good pullback entries as price drops and then continues higher. And let's take a look at after that large block trade. Sorry, I'm just trying to zoom to... So this is a good indication of the influence of options trades showing that Hero drops, starts to drop and then price follows. And notice now these more large block trades coming in. So let's go take a look at, we'll go take a look at book map again. So that may be a bullish signal for Microsoft. I meant to draw a line there. Just look for that trend break, move higher and liquidity targets at 260 and 261. All right, let's take a look at Nvidia and another good bullish setup today. Let's go take a look at Hero for Nvidia. Very strong correlation between options trades, hedging flow and price action in Nvidia. And notice how as options trades level off and then start to drop price follows. Let's see what traders were doing. Look at puts and calls separately. So definitely calls driving today. Traders were buying calls and then around one o'clock or so they stopped buying calls and then they continue to buy puts and price started to move lower. Let's go take a look at book map. Change that to look at book map and notice that Nvidia traded up to the upper edge of the expected move for the week. This is from the options market and this is for the week. And I update this number on my charts every weekend. So definitely bullish price action here in order flow and hedging flow in Nvidia, especially this morning. All right, let's take a quick look at spy, see what the S&P 500 is doing then we'll wrap it up with Tesla. All right, so it looks like the S&P 500 has almost made a round trip from the move up after the CPI data then removed down to 388 and now maybe moving higher again. Let's take a look at a hero for the S&P 500 and it continues to move higher. All right, we'll wrap it up with Tesla pretty choppy day in Tesla. There were definitely better setups that we saw with Microsoft and Nvidia and Meta for example. Let's just zoom in on this. Then we'll go to book map. Take a look at Tesla. Yeah, pretty choppy day in Tesla. So I thought the best trades were the S&P 500, of course. That's usually where I start and that there were certainly a strong thesis with the put banner rally and then the data that came out that was not as bad as expected or better than expected. And then of course Meta and Nvidia. All right, so there's a request to look at zero DTE for SPX. So we'll take a look at that and then we'll call it a day. Come back to SPX. Note this number here, 2.747 billion and let's just go turn that off next expiration. So again, like I noted before, it looks like the longer term is dominating today. This is only 400 million and we can actually compare the two. So 2.5 billion versus 463 million. So in this case, there's zero DTE and it is not dominating hedging flow for today. All right, I think that is it. That's all I have. I think I've answered all your questions. So thank you for watching. Thanks for your questions and comments and I will see you tomorrow. Thanks again, bye.