 Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern Time. Before I get started, I need to go through the disclosures. General disclosure, all Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific, investment advice, nor recommendations. Risk disclosure, trading futures, equities and options, involves substantial risk of loss, and is not suitable for all investors. Past performance is not necessarily indicative of future results. Here's my contact information. The best way to get in touch with me is through Discord. My name on Discord is Doug P. Also on Bookmap Discord, there's an options-Doug chat channel. That's a great place to post questions, comments, and content related to the topics of my channel and the topics of my presentation that I'll go through in just a moment. I'm also on X, formerly known as Twitter. My name there is at Doug P. 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 the directional bias. And the second step in my process is execution. I look at real-time motor 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 today, I will be focusing on an underlying asset. And setups in that asset can be taken any number of ways. For example, in the SMB500, setups can be taken with ES futures, spy shares, spy options, SPX options, or even ES options. Questions and comments are welcome, and I will be watching both the options-jug-chat channel and Discord and 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, Z, welcome. Glad you're here. All right, here's my agenda for today, Monday, January 8th. First of all, I want to go over news items, economic data, and events for 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 the live market, if anyone has any stocks they want me to take a look at, please let me know, and I will be glad to do that. All right, let's get started with news items. First of all, it's a pretty light week for news, economic, data, and events. The economic data really does not start until Thursday with the CPI report out at 8.30 a.m. eastern time. Also, jobless claims, 8.30 a.m. eastern time. So CPI could be a market mover. And then on Friday, PPI data comes out at 8.30 a.m. eastern time. Also on Friday, bank earnings begin. And then also there are a few Fed speakers throughout the week. So again, a pretty light day to week. All right, let's move on to positional analysis. And I want to start with ESB 500. This is the ES Futures and Book Map. And the bulls are definitely back today. Very bullish day, bullish order flow and hedging flow that we'll see in a few minutes. All right, before I take a closer look at this chart, I do want to take a look at the underlying index. Take a look at a larger time frame. So I'm going to start with a one-day chart for SPX, which is the underlying index for the ESB 500. And hello, demo trader. Looks like Steven. Welcome, glad you're here. All right, so this is the SPX index. This current rally began on October 30th for a variety of reasons. Ivy collapsed, put Vanna rally, following Treasury yields, dovish FOMC, better than expected inflation reports. And then last week, really toward the last couple of days of December, the rally started to weaken right around SPX 4800. And now it looks like it is recovering today. And again, a very bullish day. We'll take a look at that in a few minutes. All right, so that is the larger time frame. Now let's step down a little bit to a one-hour chart. This is the SPX 30-day one-hour chart. Here's the resistance just below 4800 toward the end of the year. So week before last. And now SPX recovering. Note the support level at 4700 was broken on Thursday and Friday last week. Now SPX trading above that key 4700 level. All right, let me point out the other levels on this chart. So first the dash purple lines are showing the lower and upper weekly expected move. It's based on the options market. I update that over the weekend. It changes once a week. So those lines will remain in place for the week. The dash blue lines are showing the lower and upper daily expected move. That's updated once a day. And note that SPX is trading above that level, above the upper daily expected move for the day. All right, the dark red lines are showing spot gamma levels. These are proprietary spot gamma levels that are provided to spot gamma subscribers, showing a variety of trading platforms. This is thinkorswim. I'm going to point out the key daily levels. So first of all, the put wall at 4600. That's strike with the largest net negative gamma that can be expected to act as support. The next level up is 4705. That is the volatility trigger. That is spot gamma's proprietary gamma and 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 in a positive gamma environment, market makers have to trade against price to hedge their delta exposure. And note that at the beginning of the day, gamma notional for SPX was negative and most likely will switch to positive if this rally continues for the day. All right, that volatility trigger did shift lower slightly from Friday from 4720. That was a resistance level on Friday. We'll take a look at that in just a few minutes. Down to 4705. The next level up is 4800. First of all, that is the call wall. That's the strike with the largest net positive gamma that can be expected to act as resistance. That level did move down from Friday from 5000 down to 4800. And then 4800 is also the absolute gamma strike. That's the strike with the largest absolute positive negative gamma. So with the call wall moving down to 4800 and the absolute gamma strike actually moved up to 4800, that places more emphasis more important on that 4800 level. That could possibly be if this rally continues up into January expiration and gamma notional becomes positive that level could become an important pinning level. And as price increases and expiration approaches the gamma at that level will increase. We'll take a look at that at closer in just a moment. All right, so those are the levels in range. Put wall on the downside, the potential floor and the call wall at 4800, the potential ceiling. Excuse me, and then finally let's take a look at a one minute chart. So we can see the levels in play for today. So it looks like the rally that began at the end of the day on Friday just resumed with the cash open today. Levels in play for today. Here's that volatility trigger at wrong tool. Volatility trigger at 4705. That's also the zero gamma level. That level did act as support earlier today and I pointed that out in Discord. That was a great launching point for a long setup. Here's the upper daily expected move and that level, there was some consolidation around that level and now price is moving higher. All right, so those are the levels in play for today for the SPX. Volatility trigger and the upper daily expected move. SPX trading above those levels. All right, here is the ES futures and book map and on this chart, I have my own cloud notes so I can show the SPX levels. Here's that 4705 volatility trigger that it acted as support earlier this morning for a nice long setup twice. I also have SPI levels on this chart and again, this is my own cloud notes. I like to show SPX levels, SPI levels and then other levels of interest so here's the upper daily expected move for ES. There is a difference in price between ES and SPX that changes a little bit every day. Earlier today, it was right around 37. Today it looks like it is a summer between 37 and 38. Anyway, that's what I'm using. So I'm showing this 4705 level at ES 4742. So I'm using ES minus SPX equals 37 and note I post all those index relationships that I'm using ES to SPI and Q to QQQ, ES minus SPX and then Q minus NDX. I post those all in Discord every morning. So very bullish day in the SP500. We'll talk about setups in a few minutes. I'm just focusing on the levels right now. So key level for this morning, the 4705 volatility trigger acting as launching point. Also note that this level, this looked very similar to Friday with the 4720 level, that was the volatility trigger on Friday and the upper daily expected move just above and I'm going to take a look at a couple of screenshots from Friday. So this is Friday and this is what happened at that 4720 level on Friday. Huge rally in the morning and price consolidates and then reverses lower and that didn't happen today. Here's the hero signal from Friday. This is again from Friday and the hero signal initially very bullish in the morning and then right around 1010 traders took their foot off the gas and then the SP500 finally moved lower. So that was a potential for today. I posted a reference to that move on Friday and that did not happen today. Just the price action today was too bullish. So there was some consolidation around this cluster of levels and then price started to move higher and we'll take a closer look at setups in a few minutes and we'll see what options traders were doing. So very bullish day again in the SP500. Key levels, 4705 volatility trigger and price is now trading above the upper daily expected move and above both the SPI volatility trigger and the SBX volatility trigger which is typically bullish when price can move above those levels and stay above those levels. That is a bullish indication. Let's take a look at NASDAQ now. Oh, shifts in levels again. Volatility trigger shifted slightly lower. Call wall shifted down to 4800. Absolute gamma strike shifted up to 4800 kind of consolidating the gamma at the 4800 level and looking for potential attraction to that level if this rally continues and SBX remains in a positive gamma environment. SPI there were no shifts in levels. Let's take a look at NASDAQ now. This is the NQ futures and book map. This is a bullish day in NASDAQ and before I take a closer look at this chart I do want to focus first of all on QQQ. This is a one day chart. The regular trading hours shown on the dark portion on the right here. Note the put wall at 395 acted as support. This is around 430 a.m. eastern time so before the market opened then at the open this 398 L4 level, large gamma 4 level acted as kind of a launching point for the rally. Note most of the gamma levels here are below and we'll take a look tomorrow and see if all these gamma levels shift higher with this rally. So put wall, volatility trigger and absolute gamma strike at 399 all much lower and QQQ continues to move higher above those levels. Alright shifts and novels for QQQ the only shift was the volatility trigger that shifted down from 402 to 397. So QQQ is trading well above its volatility trigger most likely what will be a positive gamma environment tomorrow. Finally let's take a look at NDX let's zoom in on today. Regular trading hours shown on the dark portion on the right NDX looks like a continuation of the rally that began on Friday afternoon NDX capped up today continues to move higher also trading above its volatility trigger at 16,425. Alright and there were no shifts and levels for the NDX. Alright so just like the ES I have my own cloud notes so I can show QQQ levels there's the 397 volatility trigger acting as support before the cash open 398 launching point for a move higher at the open here's that NDX 425 volatility trigger and note that NQ is trading well above its upper daily expected move and its upper weekly expected move so very very bullish day in NASDAQ. Alright again we'll take a look at setups in a few minutes. Alright let's take a look at gamma notional to see how market makers were positioned on the gamma curve at the beginning of the day. I'm looking at the data table that is at the bottom of the bottom founders note toward the end of the note. What I'm going to focus on here is gamma notional this is market makers position on the gamma curve at the beginning of the day and this is for the SP500, NASDAQ and also 2000. Note with the exception of NDX these numbers are negative again this is at the beginning of the day market makers position on the gamma curve and I would say mildly negative at this point. All these numbers did shift higher from Friday to still negative but less negative. Pardon me. Alright so this is gamma notional and let's take a look at let's just take a quick look at the Vana model see if there's anything of interest here. This is for SPX not really I'll go over this really quick so what this chart is showing is market makers delta notional on the vertical axis this is their delta exposure and the spot price for SPX on the horizontal axis there are two curves on this chart the light gray curve is showing how market makers delta notional may change with changes in price only and then the purple curve is showing how market makers delta notional may change with changes in price and implied volatility and that change in delta notional with a change in implied volatility is the Vana effect Vana is the second order of Greek let's see where SPX trading right now right around 4735 so right at the bottom of the curve essentially so this morning let's go back and check 4700 just at the beginning of the day so right around here there was a little bit of a van tailwind indicating market makers could buy back short futures so in a negative gamma environment traders along puts market makers are short puts and they have to trade with price to hedge their delta exposure so as price increases implied volatility drops take a look at VIX here's VIX for the day falling really started falling around 4am so implied volatility dropping price increasing market makers can buy back their short futures they used to hedge options trades so that added a little bit of a put van a fuel to the rally today that now may be coming to an end as the SMB500 has reached the bottom of this curve let's take a look at one other thing I want to take a look at this absolute gamma chart for SPX just to focus on let me zoom on this just a little bit and just to focus on the 4800 level here 4700 here's 4800 so that is the absolute gamma strike and also the call wall and they're really four levels of significant gamma the orange bars are showing positive gamma or call gamma and the blue bars are showing negative gamma or put gamma so gamma concentrated at 4600 4700 4800 and 5000 so remember the absolute gamma strike moved up from 4700 to 4800 and then the call wall moved down from 5000 to 4800 so concentrating more of the gamma weighted open interest at 4800 alright let's take a look at some setups now and this is really what was key for today and I'm going to focus on what options traders have been doing today let me zoom out on this alright so this chart is the hero signal this is hedging impact real time options this is available to spot gamma subscribers again so everything that we've looked at so far other than book map has been based on static data information the the levels in the chart the gamma notional van a model that's all based on static data that's updated once a day then I use in my planning process now we're switching to execution looking at real time data in book map and also in hero here again showing hedging impact real time options what this chart is showing is price for SPX and the hero signal with the purple line so white is the price for SPX the purple line is the hero signal and that's showing options trades and market maker hedging activity for combined signal for SPX spy XSP and ES futures all under one combined signal alright let's zoom in on this chart and let me just point out how bullish this day is this is my watch list mostly large cap tech and then the SMB500 and ASDAQ these are showing 15 minute thumbnails of the hero signal and that's quite a bit of green there alright let's zoom in on this chart now one thing I want to point out recently I have been just showing the just showing the turning off the extended hours of trading and today there were substantial options trades so SPX options and ES options trade before the 930 open and there were substantial options trades before the cash open note this flow alert that came in right around 915 indicating significant options activity so this is the right here this is the 930 cash open so there were significant options activity going on before the cash open and here's the 4705 hedgewall that I mentioned that was a great launching point for longs this morning alright one other thing I want to take a look at so we're looking at extended hours of trading note this notional value here 8.1 billion that's huge that's very very large very very bullish options trades and hedging activity so when traders buy calls and or sell puts and SPX buy ES market makers take the opposite side of those trades and they have to they hedge with ES futures so that's the right relationship that's why I'm focused so much on the the spy the SPX on my ES chart because options traders are trading those options and market makers are hedging those trades with futures alright let's take a look at let's separate out puts and calls and this is very informative chart the call the orange line is showing calls this rising orange line indicates traders are buying calls very aggressively they've been buying calls all day shown by the positive notion of value the rising orange line note also the blue line is rising they're selling puts and buying calls and that is very very bullish when both of these lines are moving in the same direction this is pretty unusual the S&B 500 typically traders are buying calls and buying puts and it's a matter of who is more aggressive but today they're buying calls and selling puts and that is very bullish both lines moving in the same direction and really have continued to move in the same direction all day so let's go to the back to bookman go to ES really it was just a matter of finding a place to get long so let's zoom in on the morning session here so here's the again the setups at 47.05 let me zoom in just a little bit more let's focus on the order flow so we know this first test of 47.05 did act as support note the volume dots are showing they're showing buy minus sell mark a buy minus sell magenta dots indicate more sellers than buyers green volume dots indicate more buyers than sellers and you can see as price reverses higher aggressive buyers come in same here just before 10 a.m. aggressive sellers on the way down note there were a couple of iceberg buys and here in this case these iceberg sell orders much more significant but options traders and aggressive buyers were fueling the rally today also buy stop orders that's shown by the rising yellow line that's often a very very good directional indicator so the yellow line showing buy stop orders dark blue line showing cumulative volume delta both rising confirming the move higher let me just take a look at something here it looks like for some reason my stop orders are not showing alright I'll look at that later looking for the on chart indicator I don't I see the sell stops I don't see any buy stops definitely driving price error oh here we go must be pretty small but buy stop orders definitely fueling that move higher alright so the rally just continues to move move higher and higher and the key for today was just to keep an eye on hero the water flow so again CVD stops moving higher confirming the move higher and also traders continue to take positive delta positions, buying calls and selling puts in a very significant way again that 8 billion notional value is very very very large alright Caesar asked does the VIX chart factor into your trading at all yeah sure yeah I look at VIX it is a confluence so definitely I look at VIX especially in the context of of the VANA model and what how market makers are positioned on the gamma curve alright let's take a look at NASDAQ get rid of some of the noise in the heat map turn on the volume dots just a little bit so again a very bullish day in NASDAQ here let's go back to hero see what options traders are doing so let's switch over to NASDAQ so again this is a combined signal for SCB500 SPX by ES and XSP let's take a look at NASDAQ this is also a combined signal for the NDX and QQQ and most of that is made up with QQQ and call buyers definitely in charge today notional value is much smaller but both lines positive much smaller than the S&B500 but since let's say around 955 put lines started to move up and really from the cash open traders are buying calls so again when traders sell puts and buy calls and QQQ and NDX market makers take the opposite side of that and they hedge those trades within QQ futures so just like the S&B500 call buyers definitely in charge today let's take a look at one other signal that is provides a lot of useful information for the NASDAQ this is the MAG7 MAG7 indicator let me just zoom out so I can show you what this is this is a combined signal for the 7 stocks known as the MAG7 Apple, Amazon, Google, Meta Microsoft, Nvidia and Tesla and just like the S&B500 and NASDAQ traders are buying calls showing by the rising orange line and also selling puts showing by the rising blue line and this is one of the most bullish days I've ever seen I think seeing for the S&B500, NASDAQ and MAG7 all the blue line and the orange line all moving up for the entire day very very bullish day and traders are definitely buying the dip today alright let's go back to back to book map rally continues higher so just like the S&B500 the key was to just find a pullback for a long if you could let's zoom in on the zoom in on the morning session so it looks like some consolidation right around the this is the NQ650 level and then the NDX16500 level just above that I'm looking at the point of control that's this purple line right around noon it moves up to the NDX16500 level and it looks like it remains there and you can see on the session volume profile that is where most of the volume for the session is concentrated alright so there were let's go back very sharp rally in the morning again difficult to find pullbacks here's one just around 10am at the volatility trigger 425 volatility trigger then more opportunities in this consolidation period note that 404 is the QQQ call wall right up here QQQ call wall could potentially be resistance alright let's take a look at a few stocks and if anyone has any stocks they want me to take a look at I'm glad to do that bullish day here in apple let's take a look at heroes see what options traders have been doing in apple I'm going to change back to the total signal so what is happening here is this large move just before noon is kind of obscuring the signal from earlier today so we'll zoom in alright so looking at the earlier part of the day there was an alert here earlier today I don't see it now but anyway traders were taking positive delta positions in apple apple's kind of been beaten down recently so traders were coming in taking advantage of the lower price and taking positive delta positions and the only gamma level in play for today is this 182.50 hedge wall and note large let's see what traders were doing right around noon so right around noon first of all they started selling puts large block orders shown by the vertical lines there traders selling puts looks like they may have been selling the puts to pay for calls they were buying again puts shown by the blue line rising blue line traders selling puts rising orange line that trades traders are buying calls market maker selling the calls and have to buy stock to hedge their delta exposure alright the next is AMD maybe a little bit of problem with hero let me just refresh here alright CWR wants to look at Nvidia yeah that's on my list and Z ask is it possible to determine which strike levels are active in hero not that I'm aware of let's take a look at something in in thinkorswim so it is not as far as I know it's not possible in in hero but it's very easy in thinkorswim so I have SPX selected I'm going to go to the trade tab and scroll down to the option stats at the bottom of the chart and I'm going to take a look at call volume here going to hover over this so they this is the volume shown on the vertical axis strike price on the horizontal axis and I can just hover over this the little block with the highest amount of volume for some reason that's again alright so that's the 8 Jan 4735 and that is the strike and the expiration with the largest amount of volume today so that expires at the end of the day today that's the 4735 and we can confirm that here in an options chain just looking at the volume there 4735 and that confirms that is the strike with the largest at least for the Jan 8 expiration that is the strike with the largest volume today alright so if that's information that you want it you can really just look at an options chain and for the SMA 500 it's a pretty good assumption that the the strike with the largest volume the expiration with the largest volume will be the 0 DDE alright this is AMD note that 140 is the call wall key gamma strike AMD trading above that level we'll zoom in on this chart and note the flow alert here indicating significant options activity we'll see what traders are doing today so they're buying calls and selling puts call buyers much more aggressive than put sellers but both helping to drive price higher let's go to book map and note go to AMD very bullish day in AMD 142.50 being the hedge wall zoom in just a bit so when we zoom in we can see there were multiple pullbacks for long entries traders were buying puts and selling calls pullback to VWAP shown by the blue line there light blue line pullback to 142 143 some consolidation at 144 so pretty easy pullback entries to AMD alright Z asks got it so do we expect any kind of sell off by the end of the day because of that well traders could take profits yeah so that is possible something to keep an eye on if traders are buying calls those calls are let's go back 47 calls are in the money yeah so they're slightly in the money but they're buying a lot of different strikes and Z also asked just want to clarify that if people were selling calls and buying puts the notional number would be preceded by a negative sign yes and hero if traders are taking negative delta positions that would be shown by a falling hero line a negative notional value and in that case traders would be again taking negative delta positions market makers taking the opposite side and selling futures to hedge their delta exposure let's go back to hero alright so WRB I'm not sure if you're asking a question but the call wall for AMD is at 140 and in that case that's where most of the calls are concentrated and those calls as they go further in the money remember in a stock traders buy calls market makers sell the calls and those calls go deeper in the money their delta increases market makers have to continue to buy stock to hedge their delta exposure so we can take a look at that in equity hub zoom in on this chart so here's the call wall again orange being call gamma as price continues to increase those calls that are concentrated at that level go deeper in the money their delta increases as they go further in the money market makers have to continue to buy AMD stock to hedge their delta exposure so traders long calls market makers are short calls alright AMD now let's take a look at Nvidia similar story very very bullish day in Nvidia note the timely flow alert just a minute or two after the cash open and very early in the day AMD breach Nvidia breaches its call wall key gamma strike all the calls concentrated at that level go deeper in the money market makers have to continue to buy stock to hedge their delta exposure that call wall breach helps to fuel this move higher and let's go take a look at book map in video and there's the 500 call wall breach very early in the morning note the very bullish order flow here all the green volume dots a lot of aggressive buyers coming in so anyone who bought a call early in the morning you're doing a great day maybe a great week and even month making a fortune on those calls so very very bullish day in Nvidia helping to drive NASDAQ higher alright Z you're welcome CWR says he's up $8000 on Nvidia today great let's go back to back to hero alright so Nvidia continues to move higher let's go back and check SP500 let's check the zero DTE so the purple line is showing this is showing all trades all expirations I'm going to turn on next expiry so the next expiry is the green line and that is making up it looks like a little bit over half of the total notional value today so traders are so traders are trading in the zero DTE trades that we saw in thinkorswim that 4735 call and also taking longer term trades alright WRB says he bought he or she bought spy calls at the open let's go back to book map back to the SP500 alright so the move just accelerates higher notice that now larger traders are joining the party buying with iceberg orders finally after finding this rally all day large traders finally coming in and buying with iceberg orders just helping to accelerate the move higher so it looks like the next next level in play for the SP500 is the 4750 level that was noted as resistance in the spot gamma I am founders note and the upper weekly expected move is just above and remember NASDAQ has already crossed above it's upper weekly expected move also remember 404 is the QQQ call wall alright my time is almost up any final questions last call for stocks alright way to go CWR WRB buying calls alright see you're welcome my time is up I'm going to wrap it up I want to thank everyone for watching thank you very much for your questions and comments again I love these interactive sessions when you ask questions post comments stock suggestions really love it thank you please keep it up again thank you for watching have a great afternoon and I will see you tomorrow thanks again bye