 Hello, everyone. Welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 p.m. Eastern Time. Before I get started, I need to go through the Disclosures, General Disclosure, all Bookmap Limit and Materials, Information, and Presentations are for educational purposes only and should not be considered specific, investment advice, nor recommendations. Riskless closure, 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. 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 option to dash Doug Chat channel that's a great place to post questions, comments, and content related to the topics in my presentation and the topics of the channel that I'll go through in just a moment. And though the Bookmap Discord is a large community of active traders, there's content on a wide variety of topics, wide variety of asset classes, including stocks, options, futures, crypto, and also a wide variety of languages. I'm also on X, formerly known as Twitter. My name there is at Doug Plus. Here are the key tenants of my approach to trading. This is the basis of my approach to trading. First of all, I believe options trades and market maker hedging activity are key drivers of price and many stocks and futures and definitely in the large cap tech stocks that I follow, as well as equity futures, the SB500 and NASDAQ. And also for the SB500, SPX is the underlying index. That's the SB500. SPY is the ETF version of that and ES is a derivative of SPX and SPY. So when traders buy and sell puts and calls in SPX and SPY, market makers take the opposite side of those trades and they have to hedge their delta exposure with ES futures. That's what they use for the SB500 to hedge their delta exposure. And the same for the NASDAQ 100, NDX is the underlying index. QQQ is the ETF version of that index. It's much more liquid and NQ is a derivative of NDX. And again, when traders buy and sell puts and calls in NDX and QQQ, market makers take the opposite side and they hedge their delta exposure with NQ futures. The focus of my presentation today and the focus of the options dash jug 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 at the first is planning and I use positional analysis. I look at how traders and market makers are positioned at the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as their directional bias. So I'm going to look at the levels of gamma weighted open interest and this is where I expect traders and market makers to react. I'm also looking at how these levels change from day to day to develop my thesis. For example, if the certain levels are going up higher day after day, that indicates traders are looking for and expecting and positioning themselves for higher prices. The second step in my process is execution. I look at real time order flow and book map and real time market maker hedging flow and spot gamma hero to confirm my thesis and for setups for entries and exits. And when I talk about setups today, I will be focusing on an underlying asset. And for example, for the SB 500 setups can be taken with ES futures, spy shares, spy spy options or SPX options or even ES options. Questions and comments are welcome. And I will be watching both the options dash Doug chat channel and discord as well as the chat and YouTube for your questions and comments. Please feel free to post and I'll do my best to answer your questions. All right, here's my agenda for today. Wednesday, February 21st. First of all, I want to go over news items, economic data events and earnings for today as well as the rest of the week. And then I'll go through my positional analysis. Then I'll review some setups earlier today and then I'll take a look at the live market. Let's start with news. There was a bond auction today, 20 year, I believe, 20 year note auction at 1pm. We'll take a look at the reaction to that initially bearish. And then at 2pm today, FOMC minutes come come out. So wherever I am in my presentation, I will stop and we'll take a look at the SB 500 to see if there's any reaction to the FM FOMC minutes. Also NVIDIA reports earnings after the market closes today. And I want to take a deep dive on NVIDIA before the earnings to see how traders or market makers are positioned in NVIDIA before the earnings. And we'll also take a look at the price action and what options traders are doing today in NVIDIA. And then just quickly for the rest of the week. Tomorrow, jobless claims come out at 8.30am Eastern Time, PMI data at 9.45am Eastern Time. Then there are a variety of Fed speakers throughout the week. So today is definitely the big day of the week for news. Alright, let's move on to positional analysis now and just to wrap up the news. This was the reaction to the to the bond auction. Initially bearish from VWAP that show them with a light blue line down to around 49.55. That is SPX 49.55 noted as a support level on the SPOT Gamma Amp Founders Note. So this is the EES Futures and Book Map. Before I take a closer look at this chart, I do want to step back and look at a larger time frame. And I'm going to go to the underlying index, which is SPX. I'm going to start with a one day chart. This is Think or Swim, a one day chart. Current rally for SPX began last year, October 30th. And from low to high was about 940 points. Alright, let's so that that gives us a bigger context that right now SPX is in this upper end of the range near the top of this rally. Looks like some consolidation after the call dominated options expiration last Friday. Alright, let's take a look now at a little bit shorter time frame. Let's go to a one hour chart so we can see the top of this price action, the rally. Here's that same diagonal line that I drew from the 1030 October 30th beginning of the rally. Note during this year, the call walls, I'll talk more about that in just a minute, have moved up from 4800 to 5100. That's where the call wall is now. Also note, this is the January expiration. Friday, January 19th options expiration call dominated options expiration. And that for that expiration price action was actually bullish. SPX broke out above the 4800 level and has gradually made it up to around 5050. Alright, let's take a look at levels on this chart. Now I'm going to zoom in a bit. First of all, the dashed horizontal blue purple lines are showing the lower and up weekly expected move. This is based on the options market. I update this once a week and these levels remain in place throughout the entire week. Then the dash blue lines are showing the lower and upper daily expected move. Also based on the options market, I update this once a day. This is based on the close yesterday. And I post both of these numbers in and discord bookmap discord in the options dash Doug chat channel the evening before. So I posted these numbers yesterday evening. And note SPX right now is trading within both those ranges closer to the lower daily expected move. Alright, so those are the expected moves. Now the other lines on this chart are spot gamma levels. These are proprietary spot gamma levels that are provided to subscribers shown on a variety of trading platforms. This is think or swim again a 30 day one hour chart. I'm going to point out the key daily levels. First of all, here's the put wall at 4800. That's a strike with large net negative gamma that can be expected to act as support. The next level up is the volatility trigger at 4995. That's spot gammas 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 that tends to enhance or increase volatility. On the other hand above that level market makers position on the gamma curve is positive. In a positive gamma environment market makers have to trade against price to edge their delta exposure. And that tends to decrease or subdue volatility and note that SPX is trading below that level. Just above that level that's the absolute gamma strike at 5000. That's a strike with large absolute positive and negative gamma. That's where most of the gamma weighted open interest is concentrated. And then above that is the call wall at 5100. That's a strike with large net negative positive gamma and that can be expected to act as resistance. So the put wall at 4800 the potential floor and the ceiling potential ceiling at 5100 the call wall. Note there was only one shift in level the put wall shifted higher from yesterday from 4500 up to 4800. All right let's finally let's take a look at the levels and play for today. We'll take a quick look at a one minute chart and not much not much to see here. That 4955 that I'll point out in just a minute right down here. This was noted in the spot gamma am founders note. I put that on my chart but it's not shown on this chart. So in the range today there are no SPX spot gamma levels in play mainly spy levels. All right so this is the book map chart for ES. Let me check for questions. All right Benjamin asked does book map need much RAM. I suggest going to the book map website bookmap.com and look up system requirements. My computer has 64 gigabytes of RAM and Benjamin says the heat maps don't load on your device. I can't read all that. I only have a free account so I think if you want to see full book map you probably need to subscribe to Glover Plus. And a free account will show crypto I believe and delayed data for stocks. And hello Caesar welcome Gladri here. All right so this is the ES futures in book map. I have my own cloud notes here so I can show SPX levels. There's that 4955 level that I was talking about. Noted as support in the spot gamma founders note. Here's the 4950 level that's not in play for today but that is below. That was also noted as support in the spot game I am founders note and note there is a difference in price between ES and SPX and today it is around 14 points. So I'm showing SPX 4950 at ES 4964. And actually I may be using 14.5. Let me just check on that real quick. No I am using 14. I may need to refresh. I changed it from 14.5 to 14 this morning and did not refresh. So now I'm showing the SPX levels at the correct location. So that 4950 now label has disappeared behind the spy level and that is at 4964 now and the 4950 to 5 level is at ES 4969. Also have spy levels on this chart. These two levels have been in play for today acting as support and resistance especially in the morning. There's the spy 495 volatility trigger also the 0 gamma level and above that is the 496 level. That's a large gamma 4 level. And this morning ES was peeing between these two levels. Very good range day trading taking shorts at 496 and long at 495. Alright so very narrow range today for the SMB 500. Again trading primarily between these two spy levels 495 and 496. So just about a 10 point range for most of the day so far except after the 1 p.m. bond auction. Alright shifts and levels again put wall for SPX shifted higher and for spy the volatility trigger shifted lower to 495 shown right here. Alright so minor shifts and levels for the SMB 500. Let's move on to NASDAQ. Alright NASDAQ I'm going to take a quick look at underlaw charts and the underlying index products for NASDAQ. I'm going to start with QQQ. This is a one-minute chart for QQQ. 425 level acting as resistance and that is large gamma 2 level. And then after the bond auction the 423 level acting as support. So pretty narrow range for NASDAQ as well but a little bit wider range than the SMB 500. Alright let's take a look at NDX the other underlying index product and here this this combo level 458 has been acting as resistance 17,458. Alright let's go back to book map. Alright so here's this level of resistance. Again I have my own cloud notes and book map so I'm showing NDX levels. There's that 458 combo 3 level that I just mentioned and also the QQQ 425 level large gamma 2. Both acting as resistance and good entry points for short and note each time those levels were tested. NQ was making a little bit lower highs and here's the lower daily expected move for NQ. NQ tested that level along with the QQQ 423 level just above that and then this is the lower weekly expected move. Alright so that's NQ futures in book map. We'll take a look at setups in just a few minutes. Alright for NDX the put wall did move lower and then for QQQ the volatility at trigger and put wall also moved higher lower so slightly bearish for NASDAQ. Shifts and levels slightly bearish. Alright let's finish up the positional analysis. We'll take a look at the gamma notional. We'll see how market makers were positioned on the gamma curve at the beginning of the day. So this is gamma notional market makers position on the gamma curve again at the beginning of the day for the S&P 500, NASDAQ and also 2000. All these numbers move lower from yesterday. Still this is neutral for SPX and slightly negative for SPY and then more negative for QQQ. So a negative gamma notional indicates that traders are on this portion of the gamma curve traders are long puts. Market makers are short puts and they have to trade with price to hedge their delta exposure and that tends to enhance or increase volatility. Alright let's take a look also at the Vantamodel in a negative gamma environment it becomes much more interesting. So what this chart is showing is market makers delta notional their delta exposure and how it may change with changes in price. That's shown by the light grid curve price only and then the purple curve adds implied volatility to the equation. That shows how market makers delta notional may change with changes in price and implied volatility. And that change in delta with the change in implied volatility is the Vant effect. Vant is the second order of greed. Alright let's take a look at some prices. So first of all just after that bond auction the low of the day for SPX was right around $49.54. So that's right around here. So what that's showing is if price drops implied volatility increases market makers delta notional will increase and they have to sell futures to hedge their delta exposure. On the other hand if price increases implied volatility drops they can buy back their short futures. Let's check on price now. SPX currently trading right around $49.64 so 10 points off the high of the day but still on this leftward this portion of the curve that is sloping upward from right to left. Let's take a look at SPY. SPY low of the day right around $494. Also on this portion of the Vant model sloping upward from right to left. SPY currently at $495. So just slightly down on this curve. QQQ low of the day $423. So just like yesterday pretty far up on this curve. Alright let's take a look at some setups now. And then again slow to Rossi points out FOMC minutes and at 2 p.m. so I've got about six minutes. Let's take a look at some setups. So first of all today I want to take a look at what options traders we're doing today. So everything that we've looked at so far other than bookmap is based on static data. Updated once a day. Open interest data. Spot gamma takes that applies their own proprietary algorithms to come up with the levels that I was showing. Now we're going to move on to execution. Look at real-time data. So what this chart is showing is the hero signal hedging impact real-time options. It's showing options trades and market maker hedging activity for a combined signal of SPX, SPY, XSP and ES futures all into one combined signal. The white line is price for SPX and the purple line is the hero signal. Again hedging impact real-time options. A rising hero line indicates traders are taking positive delta positions. They are buying calls and or selling puts. On the other hand a falling hero line indicates traders are taking negative delta positions and that means they are selling calls and or buying puts. So in the first case when traders take positive delta positions market makers take the opposite side. They have to buy ES futures to hedge their delta exposure and on the second case with a falling hero signal traders taking negative delta positions market makers take the opposite side and they have to sell ES futures to hedge their delta exposure. I'm going to zoom in now and I want to show that this is the total signal showing puts and calls. Right now I'm going to separate out puts and calls and I'm going to leave the chart like this for everything else that we take a look at. Alright so the orange line is showing calls. Rising orange line indicates traders are buying calls. This is why I want to leave the line. This when I shift from total to puts and calls and back it triggers this auto zoom function for one for some reason. Alright so I'm going to just leave it like this from now on. Take a look at a couple setups from this morning. So again orange line showing traders buy calls. Market makers sell the calls. They have to buy futures to hedge their delta exposure and the rising purple blue line indicates traders are selling puts. Market makers again take the opposite side and they have to buy futures to hedge their delta exposure. So what I want to focus on is a when both the blue line and the orange line are moving in the same direction. So that occurs first at 9.35 and second right around 10.30 and actually really gets going right around 11.05. Alright so let's go to book map now. Go back to ES. Got about two minutes. We'll take a quick look at this first setup. So we know that both the blue line and the orange line were moving in the same direction from about 9.35 to 10.05 and right here this was the best opportunity for a long entry right at the 4.95 level. That's spy 4.95. So even as the orange line and the blue line were moving up the same direction there was a deeper pullback to a level that I was looking for for a long entry. Note also before that large traders were coming in buying with iceberg orders that shown by the on-chart indicator and also the sub-chart indicator the rising light blue line and from that point that reversal at the 4.95 level. Note also the liquidity in the order book. There were a lot of buyers shown by the heat map in the order book. Those levels that that liquidity below those are limit buy orders and after that reversal at 4.95 ES makes a series of higher lows and then finally takes off up to 4.96. Alright so that was the long setup in the in the morning. It took took some patience. Alright F1C minutes coming up. So we'll wait on that and let's zoom in a little bit. So a quick ping between 4.95 and VWAP. Let's see what options traders are doing. So traders started buying puts right around 11.15. Looks like that still continues. Blue line falling. Call line pretty flat. So they could continue to buy puts. So in this situation I would be looking for looking for a short just based on hero here. Hello Stephen welcome glad you're here and reading the notes. Some concerned inflation progress could stall. Policy rate seen likely at peak. Some traders selling with iceberg orders. This is not big size at all but those are iceberg orders that shown by the falling light blue line. Also the on chart indicator. Let's go back see what options traders are doing. Still buying puts not doing much with calls. Let's check another signal. What this is is the mag 7 signal and what this is a combined signal for the stocks known as the Magnificent 7 that is Apple, Amazon, Google, Meta, Microsoft, NVIDIA, Tesla. Looks like there is a jumping price for for the QQQ. That's what this price is showing QQQ. But so far the hero signal is still bearish. Traders buying puts and selling calls and the mag 7 stocks. Let's go back to book map. So now our price is spiking higher. Excuse me just a minute. Alright so far the 495 support 496 resistance still in play. Still working as before. Day like today you just have to trust your levels with VWAP right in the middle. Let's go back to hero. So now it looks like I'm going to shift to a shorter look back period. So it looks like when this is right now my look back period is the entire day. And sometimes when it flattens out in the afternoon it's helpful to look at a shorter look back period. So now I'm just looking at the last 30 minutes of data. Zoom in on this a bit. So just after the release of the minutes. Initially there was a little bit of a bearish reaction. Then traders started selling puts buying calls. Let's go back to book map. So again same levels in play for today. 495 to 496. Alright I'm gonna move on to NVIDIA. We'll come back to this in just a minute. So first of all let's take a look at NVIDIA and book map. So again for those of you who may not be aware NVIDIA reports earnings after the market closes. That's what they're talking about on all the news outlets that cover business and financial news. What I want to do is kind of take a deep dive and see what how options traders are positioned in NVIDIA. So this is NVIDIA and at We Hub and I'm going to take a look at a variety of items here. First of all this is volatility skew. And typically for an index there's a pretty steep like the SB500 a pretty steep put skew and not much of a call skew. So that would be for SPY something like that. And what this chart is showing is volatility, heightened volatility for calls. And heightened volatility indicates higher prices. So when there's a demand for anything like calls price goes up implied volatility goes up. So this is showing a heightened demand for calls for NVIDIA. Let's take a look at the term structure. So this will show volatility by expiration and implied volatility is on the vertical axis here. This is showing implied volatility for Friday expiration. Remember for stocks there are expirations every Friday for most of the stocks that I follow. So that's the heightened implied volatility for expiration on Friday and then note the sharp drop in implied volatility. And that implied volatility no matter what happens will drop tomorrow. This is the fixed strike matrix. Note the green band here indicating that is for the Friday expiration for 23. Green band indicates heightened volatility across this band of strikes shown on the on the chart here. Let's also take a look at this risk reversal. And this is comparing the implied volatility of a 20 25 delta call versus 25 delta put. This is price shown by that kind of white gray line. And then this light purple line that's the risk reversal again comparing the price of implied volatility of a 25 delta call versus a put rising line indicates increased demand for calls. And that's over a period of time. Really from about three years worth of data. So this is most recent data. This risk reversal line has been rising and prices responded higher. When traders buy calls, market makers sell the calls. They have to buy stock to hedge their delta exposure. Finally, let's take a look at history. And this will show a history of the key daily levels for the last 10 days. This is today. And note the absolute gamma strike or the key gamma strike for stock and the call wall have remained the same. Key gamma strike at 700 call wall at 800 and the put wall did move higher from 575 to 600. All right. So in video, we know that there has been a very heightened demand for calls and that implied volatility will most certainly drop tomorrow. And Caesar asked, Have you ever seen such excitement, anxiety over one single earnings report like Nvidia today? Feel like the interest overt is incredibly high. No, I don't think I have ever seen interest in one earnings report like this Nvidia. Nvidia has been kind of the ring leader of the AI stocks. And certainly the market leader for the last few months. All right. So let's take a look at hero for Nvidia see what options traders are doing today. And I'm going to shift back to a one day look back period. All right. So what this is showing is that traders have been selling calls all day. And they've also been selling puts that shown by the positive notional value there. But at that line is pretty flat. And the notional value is right around 47 million for puts positive versus minus 537 million for calls. Traders definitely selling calls today, taking advantage of that heightened volatility for calls and selling calls. All right. Let's go take a look at book map and video chopped around pretty much in the morning and then drop pretty sharply right at noon. Let's go back and see what options traders were doing. And I really don't see anything here in hero that would have led to that that sharp drop in price. Pretty much a steady downtrend in the call signal. And at that time they were also buying puts. All right. So there's Nvidia now trying to make a comeback. Or let's go back to the S&P 500. Still back in that narrow range. Let's take a look at NASDAQ. And for NASDAQ this morning I thought the signal was definitely more clear than the S&P 500. Let's go back to hero. I want to go to the Mag7 signal. So again, this is a combined signal for the stocks known as the Magnificent 7. And this often looks a lot like Nvidia. Nvidia is definitely a driver price for the Mag7 and thus the NASDAQ itself. All right. So traders after just about 10 minutes after the open, they started selling calls in the Mag7 stocks. And these stocks are a large component of the NASDAQ 100. I have started looking at this signal for trading the NASDAQ rather than rather than the signal for NASDAQ itself. We can take a look at that. This combines NDX and QQQ. All right. So they have been overall in the NASDAQ selling puts and selling calls called sellers a little bit more aggressive. Let's go back to Mag7. And let's take a look at, first of all, let's zoom in on this just a bit. Short set up, oops, short set up right around 945. Blue line, orange line moving in the same direction down, sets up a short 940, 945. And also a short set around 10.05. Traders start selling calls again. Put line flattens out. Right. So 940, 945 and 10.05 shorts. We'll zoom in. Oh, it was around 940. So there's the first short right around 940. Good for about 50 NASDAQ points from 500 down to 450. Here's the 10.05 set up a little bit more clear resistance at the 458 level and the 425 level that I talked about before as NQ made a series of lower highs. Right. Looking beyond the levels at the clues in book map here. No cumulative volume delta falling. Also sell stop orders fueling that move lower slight drop in the yellow line showing stop orders. And again for the second short cumulative volume delta dropping. Also the yellow line continues to fall showing sell stop orders again. And also the light blue line showing large traders selling with iceberg orders as traders were selling calls in the mag seven stocks. Right. So to oops, sorry about that. Turn that off. All right. So it looks looks like NQ heading back down towards the lower daily expected move. Also QQ Q 424. Let's go back and check. Check hero. All right. So the put line is flat. Traders have been selling calls pretty consistently. Looks like now. Let me be buying calls. Let's go take a look at the SB 500. So far continued to buy puts. Not doing much with calls. Let me check for questions. All right. Just an ask is level two and a broker the same as using book map? Well, it depends on what form the level two data is supplied. If it's just in a, well, I would say no. Book map presents data in a unique way that helps you to interpret order flow. So book map is using that data to to present the order flow in a very graphical form that helped you to to make trading decisions. So Steven says he doesn't think so. I agree. All right. Let's go back to book map. Yes, continues to trade in a very narrow range between 495 and 496. Let's take a look at one other stock. Amazon was also in the news. It will be added to the Dow Jones industrial average on Monday, replacing Walgreens Boots Alliance. Let's see what options traders have been doing today in Amazon. So net for the day they are buying calls. Not doing much with puts. Let's just take a look at the total signal. So slightly positive for the day. Really not much to see there. Oh, the one thing I let's go back. Let's go back to Amazon. One thing I meant to point out was the reversal at the 170 call wall 170 the call wall key gamma strike and acting as resistance as expected. Here's the 170 call wall acting as resistance. Good entry point for short. Good for a couple points in Amazon. Let's go back to ES now. So ES now breaking below that 495 level. Let's take a look. See what options traders have been doing. Make sure on one the full day look back period. So meant a bit. So they continue to buy puts. Let's go back. Let's go to 30 minutes. Right. So that does provide more clarity for sure. So just looking at the last 30 minutes of data providing a very clear signal. The initial move higher quickly reversed. Trader started selling calls buying puts blue line orange line moving in the same direction. And that's definitely bearish. Let's go back to book map. So hero shifts bearish as ES reaches that spy 496 level that it has acted as resistance earlier in the day. Pullback entry short. Now breaking below the 495 level and below the lows of the day for the cash session. Next levels below the 4950 level noted as supported in spot gamma am founders note and the spy 494 level and Steven thank you for your detailed answer to the level two data question. So thanks for your help Steven. So quick ping from 495 up to 496 resistance trader start selling calls buying puts and ES moves lower. Let's go back to hero. All right. So both the blue line orange line continue to move in the same direction down. I've got a couple minutes left. Does anyone have any stocks they want me to take a look at. And we'll watch this 495 level see if it acts as resistance down. Some large traders are fading this little move higher with iceberg orders shown by the law of falling light blue line. Alright. A boo wants to look at in queue. Then we'll come back and check if that 495 level will act as resistance in queue more bearish today. Now in queue trading below its lower daily expected move and lower weekly expected move. So back out. So for the day. In queue has been making a series of lower highs. Now breaking below this 450 level which acted as support before multiple tests below that level now. Now breaking down. Alright. So there's in queue. Alright. Let's go back and watch ES watching to see if ES makes it up to 495. See if that acts as resistance for a PSS your SPX gamma level is 4955 4960 4955. This is the 4955 level noted as support in the spot gamma founders note and then just below that is the 4950 level that's shown by the white line there. The label is obscured by the spy 494 level. Both levels noted as support in the spot gamma founders note and note there is a difference in price between ES and SPX 14 points. So the offset between SPX and ES is 14 points. Let's go back to hero. Alright. So traders now are starting to buy calls and sell puts. Alright. I'm going to go ahead and wrap it up. My time is up. So it looks like overall the reaction to the FOMC minutes was bearish for both the ES and NASDAQ. So if anything interesting happens I'll post it in discord this afternoon. Alright everyone. Thank you for watching. Thanks for your questions and comments and tomorrow we will talk about the Nvidia earnings. Alright. Thanks everyone. Have a great afternoon and I will see you tomorrow. Bye.