 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. First disclosure, trading futures, equities, and options involve substantial risk of loss and is not suitable for all investors. Pass performance is not necessarily indicative of future results. The focus of my presentation is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading and the first is planning and I use positional analysis. I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as a directional bias. And the second step of my process is execution. And I look at real-time order flow in Bookmap and real-time market maker hedging flow with SpotGammaHero to confirm my thesis and for setups. And just to be clear, when I talk about setups, I will talk about the underlying asset, whether it's the S&P 500 futures or SPY shares or Tesla shares. I'm talking about the underlying, but that setups can be taken any number of ways with shares or futures or options and that's up to you. And questions and comments are welcome and I will be watching the options-dog chat channel and Discord and the chat and YouTube for your questions and comments. So again, please feel free to post your questions and comments and I will try to answer them. All right, let's get started. My agenda for today, I want to go over news items, economic data and events. Then I'll go through my positional analysis. Then I'll talk about setups and I'll go through that as long as we have time before the FOMC minutes are released at 2 p.m. And at that time, I'll stop and we'll watch the S&P 500, most likely the futures. All right, so the news began today with the CPI report this morning that came in mostly in line or slightly lower than forecast. And there's the year over year and the month over month, a little bit less than forecast. Core CPI year over year in line, as well as the core CPI also in line. So that's the data for this morning. And then remember, again, the FOMC minutes come out at 2 p.m. and we'll be watching the ES futures at that time. And then tomorrow, the PPI comes out at 8.30 a.m. Eastern Time. And then finally on Friday, retail sales at 8.30 a.m. Eastern Time and then Michigan consumer sentiment at 10 a.m. All right, let's go through my positional analysis now. I'm going to start with the S&P 500 futures. This is the ES. And before I go further with this chart, I want to take a look at the SPX. This is the S&P 500 index, just showing price and the key gamma levels. Key gamma levels. This is a 20-day one-hour chart. And first of all, notice that the SPX has been at a pretty narrow consolidation since last week, trading at a range from around 40.70 to 41.30. 41.34 is the high there. So trading at a pretty narrow range, again, since last week. Let me point out a couple of the key gamma levels. These levels are provided to spot gamma subscribers for a variety of platforms. Again, we're looking at thinkorswim here. Here's the SPX put wall now at 3,900. So it has increased from 3,800, where it has been for quite a while, to 3,900. The put wall is the strike with the largest net negative gamma. And that can be expected to act as support. Here's the 4,000 level. That is the key gamma strike, or absolute gamma strike. Excuse me, the key gamma strike, the strike with the largest absolute gamma. And then the volatility trigger is at 40.95. And that spot gamma is proprietary gamma flip level. Below that level, market makers position on the gamma curve is negative. And that means they have to trade futures with price to hedge their delta exposure. And that tends to increase volatility. On the other hand, above that level, market makers position on the gamma curve is positive. And that means they have to trade against price to hedge their delta exposure. And that tends to subdue volatility. So right now, SPX is trading above the 40.95 volatility trigger. And then finally, the call wall remains at 4,200. That's the strike with the largest net positive gamma. That can be expected to act as resistance. So those are the key levels. Now let's take a look at another thinkorswim chart, showing the same levels. This is just for today. And this is showing SPX from the RTH Open. And again, these are the levels that are in play for today. Here's the volatility trigger that acted as support, the 40.95 volatility trigger. Then here's the zero gamma level. And that's just what it sounds like at 4,112. And then up above is the 4,150 level that acted as resistance for the S&P 500 futures before the RTH Open. And we'll see that in book map in just a minute. So there's the support level at the 40.95 volatility trigger. All right, let's take a look at the book map now. And I'll go through setups in a few minutes. So first of all, here's the reaction after the immediate reaction after the data release at 8.30 AM Eastern time. And the S&P 500 futures ES headed right up to the 4,150 resistance level, noted as resistance in the spot gamma AM founder's note. And then price gradually moved down again to the 40.95 volatility trigger level that acted as support. So as Bruce says, you just can't make this stuff up. It's very important to track these SPX levels. And let me point out, I have a couple of columns of notes here. And here's the first column, the spot gamma cloud notes. Again, these spot gamma levels are available for a variety of platforms to spot gamma subscribers. This is showing the 4,150 level. There's a slight difference between what spot gamma is showing and what I calculated. Spot gamma is using a 27 point difference between SPX and ES. So this is an SPX level converted to an equivalent ES number. And I calculated that they're using a 27 point difference. I calculated it at 26.5, so slightly different. And I'm showing those levels and a little bit more in my cloud notes. So here are the SPX resistance levels. And this is the ES big ground number 4,150. And I'm also showing key SPI levels. And there's the 410 key gamma strike. That was a very important strike yesterday. And then the SPI 409 volatility trigger. And then finally, there's the 4955 SPX volatility trigger. So the same levels are on this chart. And again, so far the primary levels that have been in play today. On the upside, the 4,150 resistance level. And then the 4,095 volatility trigger that acted as support. There were a few shifts in levels from yesterday to today. First of all, the SPX volatility trigger shifted higher from 4070 to 4095. And the SPI volatility trigger shifted higher from 408 to 409. And also, as I mentioned before, the SPX put wall shifted higher from 3,800 to 3,900. And that put wall had been at 3,800 for quite a while. And John Wick in YouTube, hello. Glad you're here. And you're welcome. Glad you appreciate what I'm doing. All right, so that is the S&P 500. And then for QQQ, the volatility trigger shifted lower slightly from 317 yesterday to 315. All right, let's take a quick look at the index pages in spot gamma. Here we go. All right, so this is the, what I want to focus on is first the absolute gamma levels. And we'll see where the levels that I have just talked about, see where they come from. So first of all, this is SPX. There's the 4,000 strike. The strike with the largest absolute gamma. And the zero line is what's separating the orange bars from the blue bars. So the orange bars are positive gamma or call gamma. And the blue bars are negative gamma or put gamma. And again, this is the 4,000 strike, the strike with the largest absolute gamma. And then here's the new put wall at 3,900, the strike with the largest net negative gamma that can be expected to act as support. And then here's the 4,200 strike, the strike with the largest net negative net positive gamma that can be expected to act as resistance. So that's the SPX. That's where those levels come from. Now let's take a look at SPI. I'm going to zoom in on this chart. And for SPI, 4,10 is the key gamma strike or absolute gamma strike. And 400 is the put wall, the strike with the largest net negative gamma. That's pretty obvious. And then there is the 4,20 call wall. So that is the SPI. So we've covered the S&P 500 now. And generally, I have to refresh before I look at QQQ. So for the NASDAQ, we'll just look at QQQ. Again, looking at the absolute gamma levels, positive gamma or call gamma shown with the orange bars and negative gamma or put gamma shown with the blue bars. So for QQQ, 320 is the key gamma strike and also the call wall. And then the put wall is down at 300 right there. So that's QQQ. All right, so DM and YouTube ask, what is the process to subscribe for the Spot Gamma levels? Just go to spotgamma.com. And you should see the subscription choices there. So I think they have a variety of levels of subscription. And you'll see on the website the descriptions of what's included with every subscription. And just to note, I use Bookmap and Spot Gamma. Those are my primary tools. I think both are well worth the cost. All right, so this is something important here. This is the VANA model for SPX. And we'll also look at the VANA model for SPI and QQQ. And this is showing two curves. And first of all, this light gray line is showing how market makers delta notional or delta exposure shown with the vertical axis changes with changes in price. That's shown on the horizontal axis. So this is showing that market makers delta notional will increase as price increases. And they have to sell futures to hedge their delta exposure. So this is typical of a positive gamma environment. Like I talked about before, market makers are trading against price to hedge their delta exposure in a positive gamma environment. And then on the other hand, in a negative gamma environment, as price decreases, at some point they will have to start to sell futures to hedge their delta exposure as price decreases. All right, so that is just pure delta not accounting for any changes in implied volatility. And then this purple curve here does account for changes in implied volatility. And what this is showing in the positive gamma region, that the change in implied volatility is not going to add much to what market makers their delta notional and how they have to hedge. And that is, again, pretty typical of a positive gamma environment. So this means that there's no put vana tailwind for market a positive gamma environment. And just to point out, this is the first, I think, this is probably the first positive gamma day for CPI in quite some time. And if you recall from last year with the markets in a negative gamma position, a very negative gamma position, there was always a potential for a put vana rally as implied volatility dropped, prices increased, and traders long puts, quickly lost value, and market makers could buy back their short futures. So that was last year. And then this year, it's a different environment altogether. So it's very important to keep track of this information. And then finally, what this is showing, and this was the case earlier today, is as implied volatility increases and price drops, market makers have to start to sell futures to hedge their delta exposure. And this purple line is showing the vana effect, the change in delta with a change in implied volatility. And let me just clean this up. And this shift happens around the 41-40 left level. And when we take a look at the SPX, we'll make a note of that level and what happened this morning. And this certainly plays into the price action this morning. All right, so that's the SPX. And let me know if you have any questions about that curve. And we'll just take a quick look at the vana model for spy and just a slight shift more negative. And that shift occurs around 415. And then here it is for QQQ. All right, so RJ asked the determination of the volatility trigger for the S&P 500 is that a proprietary number for Spot Gamma or is it something we can obtain from the SPX? Absolute Gamma Chart. No, I think the easiest it is a proprietary number. So again, the volatility trigger is Spot Gamma's proprietary Gamma flip level. And the easiest thing is just to look at, well, let's see. Looks like I've lost a lot of this for some reason that you have to keep logging in. All right, so the volatility trigger levels are provided to Spot Gamma subscribers in a variety of locations. The easiest thing is just to look there. And if we have time toward the end, I'll go back and we can take a look at the Gamma levels. And before we've been able to identify those Gamma flip levels pretty closely with the combo levels. All right, so there's the volatility trigger, the VATTA model for QQQ. All right, then let's take a look at, this is some of the prep that I do for trading stocks. I track the key Gamma strikes for all the stocks on my watch list. And I track the changes from day to day. And so this E column, the previous key Gamma strike, that's from yesterday, and the current key Gamma strike, the D column, is from today. And I color code these just for a quick visual reference. Green means that that number increased from the previous day. I interpret that as bullish. And then red indicates the number decreased from the previous day. And I interpret that as bearish. So in the case of a rising key Gamma strike, that means traders are positioning themselves in the options market for higher prices. And on the other side, a red number decreasing key Gamma strike indicates that traders are positioning themselves in the options market for lower prices. And this is just a starting point. And recently, it has not provided that much insight really, except for the indices, I would say. All right, so let's take a look at, I want to take a look at the S&P 500 and talk about setups in the S&P 500. And then that will probably take us to 2 PM. So for those of you who may not be familiar with this chart, this is hero, Spot Gamma Hero, available to Spot Gamma subscribers. And the white line on this chart is showing price. And the purple line is showing options trades and hedging activity. And in terms of a notional, delta notional value. And one important point here, this chart that I'm looking at is a combined signal for SPX, SPY, and now, very importantly, ES. This is a new addition for today. And this is combining options trades for all those instruments, SPX, SPY, XSP, which is not significant, and ES, ES Futures, all into one combined signal. And this is, if you trade any form of the S&P 500, SPY shares their options, SPX options, or ES Futures, this is generally the signal that you want to look at. All right, so let's take a look at a couple of setups here. I'm going to zoom in on, first of all, on the morning session. And first thing to notice, here is the, this is the RTH open. So it's showing information from before the RTH open. But they're trading, this is primarily SPX and ES, and it's not significant compared to after the open. And notice, traders, they're buying calls here. And in all these index products, they typically buy calls and buy puts. And it's just a matter of determining who's winning. And in this case, in the morning, the call buyers were winning. And no price drops, and then increases just around $9.50. And that set up, that divergence set up a little bit of a long. Let's go take a look at Bookmap and take a look at that. So we're looking at around $9.45. And I'm going to bring these over. This is the market pulse with volume pressure. And I've muted it so it doesn't make a noise, but it's showing volume pressure. So let's zoom in. And here's that long set up right here. Note the shift in order flow. Pink dots, market sell orders, order flow shifts bullish with buyers, aggressive buyers coming in with market buy orders and takes price up just a short amount. And then let's go back and take a look at Hero. And this was the primary set up, the short here. Notice that price makes a series of pretty much equal highs while Hero is starting to slope down and setting up that short. Let's go back and take a look at Bookmap. And I'm going to zoom out at this point. The minutes will be released in just a moment. So here's the short set up. Right here, here's the final test of VWAP. Price drops lower. And at this point, we'll just wait for the data release and the minutes release and see what happens. So so far, we saw two setups that Hero acted as a leading indicator, both a small long for a few points and then the short that set up with the drop below VWAP down to the 4095 volatility trigger. All right, so the minutes have been released. So far, not a lot of movement. And again, remember the S&P 500 is on a positive gam environment, indicating lower volatility. Let's go see what options traders are doing. Take a look at Hero. I'm going to change the look back period to a shorter time frame. So this is just showing the last 30 minutes of data. And it'll be a little bit more sensitive to what's going on now. So it looks like so far, options traders are fading this move higher, taking negative delta positions. So this is showing puts and calls. Let's take a look at what zero DTE options traders are doing. And there's a very close correlation between zero DTE shown with this green line and the purple line, which shows all expirations. I'm going to change this back to all day, turn this off. All right, so we talked about two setups. First of all, this divergence long, slight divergence short, down to the 40.95 level. And then notice here's the long setup, reversal at the 40.95 level. So clear divergence long in the morning, and then a divergence short, and then confirmation long. Let's go back and look at book map. Now it looks like, well, this is looking at the total signal. Let's go back and take a look at the 30 minute signal. So now it looks like options traders are taking slightly positive delta positions. And the cumulative of the entire day is showing positive delta. Let's go take a look at book map. So not much movement, large iceberg by. That's interesting. We can see that with this number here, 2,000 contracts executed. Those are iceberg orders. And large traders use iceberg orders to hide their size. And you can also see that jump in that light blue line. So there was a stop run down this red dot, sell stop order down picked up by the iceberg orders, 2,000. And John Wick asked, would you recommend any prop firm for futures? And no, I can't make any recommendations. I trade on a standard with a standard futures broker. You come into Discord, and I can answer your question in more detail. But I just use a futures broker. So let's go back out. So I talked about this long setup that was set by that clear divergence in hero. Then the short set up, again, a divergence. And good entry point was the final test of VWAP, and then the move lower down to the 4095 volatility trigger. And again, remember when we were looking at hero, we could see that hero started rising. And you can also read an order flow here, this reversal higher. Again, note the shift in. Let's zoom in on this. So this is a key spot gamma level. 4095, we know that. We know that price is heading down. We know that large traders are buying with iceberg orders on the way down. That's pretty typical. Large traders often will buy weakness and sell strength with iceberg orders. And we can see this stair step higher in the iceberg line. And then order flow shifts. Positive note, all the green dots there. Very easy read here in book map. And price heads back up to the 4150 level, which was in play as a target yesterday. All right, RJ asked, why does the hero line look so different between daytime versus 30 minutes? And the reason is, that is the accumulation. It's like cumulative volume delta, accumulating the hero readings for the time period that you specify. So it's going to show for one day, it's, again, accumulating all of that options data for the entire day. And then 30 minutes is only including the last 30 minutes. And then as one minute passes, the previous, the first minute drops off. It's like a moving average. So a shorter time period moving average is more sensitive to changes, recent changes, than a very long-term period moving average. Think about a 20-period moving average versus a 200-period, or a 20 versus a 50 or whatever. So if you want to want to trade in the afternoon, for example, sometimes it helps to change that rolling window to a shorter time period. But I do most of my trading in the morning, and I always leave it on the one day. I like to see the longer-term trend of hero. Speaking of hero, let's go back and take a look. So now we're on a one-day rolling window. Let's go take a look at the 30-minute. I think that this one day, this is what I like to look at. Just provides the information that I want to see. The only time that it really makes sense, or another time that it makes sense, to change the rolling window is if hero flat lines, for example. So let's say there was a large movement in hero in the morning, and then at flat lines, it's accumulating all this. Let me redraw that. So let's say there was a big movement in hero in the morning, and then at flat lines, the changes in the flat line area are insignificant compared to what happened earlier in the day. So in this case, it would make sense to go to a shorter time frame. All right, we'll go back and check bookmap one more time, and then we'll go take a look at some other setups, some other stocks. All right, RJ, thank you for answering the question about the live stream. OK, so let's take a look. Let's go back to bookmap. Take one last look at the S&P 500. So not a lot to see here. Not a lot of reaction to the S&P 500, the FOMC minutes. I'd say except for these large iceberg orders coming in, that's definitely bullish. So if I was trading this, I would definitely be leaning bullish at this point. All right, let's take a look at some other stock setups. First, let's go to Apple. Move this out of the way. Not a lot of range in Apple. Let's take a look at hero for Apple. Actually, I'm just going to see if we can get this to a spot on the chart where it's not necessarily in the way. So I do want to keep an eye on this, though. All right, let's go to Apple. And there was confirmation with hero, confirmation short, long, short, pretty choppy day in Apple here, long. Let's go take a look at bookmap. And there's the short, the long, the short, then long again. Not much range. And if price does move lower, here's the 160 key gamma strike hedgewall as a potential target on the downside. And then the high liquidity at the 162 level is a potential upside target. The next is Amazon. Short set up in the morning and the reversal here at VWAP and the 100 key gamma strike. Let's go take a look at hero for Amazon. And this is a confirmation short. And as price tested, the key gamma strike shown here. So that's your signal for a short. Key gamma strike, price moves up, acts as resistance. Traders start taking negative delta positions and price moves lower. Go back to bookmap. And the first price target was at 99, the 99 hedgewall. So not a lot of movement today, just a point, point and a half for Amazon. Let's go take a look at hero. Do want to point out Google. I have this on my other computer. So I'm just going to look at it in hero. But there was a confirmation short. Looks like it was good for a couple of points. No spot gamma levels in play. Just a confirmation short. It looks like a couple of large block orders coming in, shown by these near vertical lines. Negative delta, all right. The next meta, choppy day in meta. And so far, it looks like the best trade was this confirmation long. And this put wall at 212, it looks like that never came into play. That would have been the target for a downside move. Let's go take a look at bookmap. There's meta. There's the 212 put wall. Never came into play. And here's price reverses lower, just below the 213 level. And this light blue, oops, wrong direction, light blue square. And this number here, that's the absorption indicator showing passive orders absorbing the sellers. And then price starts to move higher as traders start taking positive delta options positions and aggressive buyers come in. Start moving price higher. So that's meta. Next is Microsoft. Another choppy morning session in Microsoft. Let's take a look at Hero. All right, this was a little bit more difficult to interpret. But I did interpret this as a divergence. Divergence long. Notice Hero is making a series of higher highs, moving higher. Price moves lower right down to the 282 put wall, hedge wall, and reverses higher. Let's go take a look at bookmap for Microsoft. So a divergence long there. For Microsoft, there's the 282 put wall, hedge wall level. Price made a V bottom there. Reverse tire. Good for about a quick four point move up to 286. Let's go back and take a look at Hero. So there is the, let's zoom in on this in the morning, the divergence long again. Hero moving higher. Price moves lower, then higher, and reverses right at the 282 hedge wall put wall level. All right, so that was one of the better setups this morning in stocks. Let's take a look at Nvidia and Confirmation Short. First thing in the morning, traders taking negative delta options positions, and they move up, and price moves up slightly. Then they start taking negative delta positions, and price moves lower again. Let's go take a look at bookmap, take a look at Nvidia. So there's the quick drop, and you definitely had to be prepared for this. Quick short, one clue to be prepared for this. Let's go take a look at my key gamma strike list again, and note the drop in the key gamma strike for Nvidia from 280 to 270. So in educating somewhat bearish sentiment for Nvidia, let's go back and take a look at bookmap, and note the, let me zoom in on this, get these back out of the way. Note the sell sweep here. So a quick move up to somewhere between 274 and 275. Sell sweep comes in, that's the small red dots. Those are aggressive sellers. And notice also the pink dots, the volume dots, shift from green to red, and price makes a quick drop. Down to the first target at the 270 key gamma strike, and the liquidity at that level. And then stays below VWAP, and moves down. Again, as options traders started taking negative delta positions, moves down toward the liquidity at 265. And a couple of several short entries there below VWAP. You had to wait a while, be patient for that. So that's Nvidia. Let's take a look at QQQ. Take a look at Hero. So here I was looking at this divergent short. Well, first of all, in the morning, just like the S&B 500, just a few minutes after the open, options traders started taking bullish or positive delta positions as price was falling. And then price soon followed. Up to 317 and VWAP, then traders started fading that move. And actually, they were starting taking negative delta positions as price continued to rise and level off. Setting up the short. Let's go take a look at book map. So here's QQQ, the data. Drop after the data. And then here's that. Let's go to the around the open. So here's that short setup that I was talking about. Reversal at the 317 C5 level. That's a combo 5 level. 5 being the lowest on the rank of 1 to 5 in importance or the amount of gamma at that level. But still, it did act as resistance along with VWAP. And price moved down. Good for a three point move down. And RJ asked, can we take one more look at the S&B 500? Yes. So I want to take a look at Tesla. And then we'll go back to the S&B 500. All right, really nice downtrend in Tesla. Note the 182 put wall in play as a target for the morning move. And now price has breached that level and is moving lower. So here, just after 11.30, it acted as support. And now price is moving lower. Note the 185 hedge wall acted as resistance. So it was a target this morning. Price consolidated at that level for just a few minutes. Then moved down to the put wall. And then price found resistance at the 185 hedge wall. And now moved back down to the 182 put wall and is currently moving lower. Let's take a look at hero. Here's Tesla. Hero for Tesla has been a little bit more difficult to interpret for Tesla some days. But here, the overall trend is negative, negative delta. Separating outputs and calls. Note the total number here. This notional value is negative. Overall net net traders is, well, let's take a look at the S&B 500. And RJ, I'll answer your question. So I'm going to look at the total signal. Zoom in on this. All right, so the hedge wall is like, well, first of all, for single stocks, Spot Gamma makes a different assumption for single stops than they do for indices. So for the SPX by QQQ, the NASDAQ and the S&B 500, Spot Gamma assumes that traders are long puts and market makers are short puts. They assume that traders are short calls. And market makers are long calls. That's for the S&B 500 and NASDAQ. Hence the change from below where in the part of the gamma curve where traders are long puts and market makers are short puts, that's the negative gamma environment. And then in the opposite side, where traders are short calls and market makers are long calls, hence the positive gamma environment. And that gamma flip level, the volatility trigger, shows that is the level of that change. All right, so for a hedge wall, first of all, for single stocks, let's just go to these definitions and terms. And this is free to everyone, whether you subscribe to Spot Gamma or not. And we'll take a look for the hedge wall. So for stocks, Spot Gamma assumes that traders are long puts and or long calls. So on the put side, it's the same as an index product. And for the call side, again, Spot Gamma assumes that traders are long calls, market makers are short calls. So in the case of a single stock, market makers are always in a negative gamma position. That's the assumption. So let's take a look at the hedge wall. So a similar impact for individual stocks is the volatility trigger. Can be thought of as the point where realized volatility is expected to start increasing. And when the hedge wall rises, that's a bullish sign and it's a bearish signal if the level increases. So you can take a look at this. Take a look at this free resources on spotgamma.com for more information. Let's wrap it up. Let's go to the ES and P500. And now it looks like ES has finally resolved to the downside. So it looks like these large traders with their iceberg orders did not get their way. And price is now moving lower. Perhaps back down to the 4095 volatility trigger so far, so far trading at the spy 409 volatility trigger. Let's go take a look at HERO one last time. And we can see that options traders not really providing much of a lead effect here. All right, that's all I have for today. And Noah says, I appreciate you taking time to do this every day, Doug. Always get something from the webinar, calm and articulate among all the chaos. I'm glad you're here. Thank you very much for your kind words. I really appreciate that. And everyone, I want to thank you for your questions and comments. Thanks for watching. And I will see you tomorrow. Thanks again. Bye.