 Hello everyone. Welcome to Options with Doug. Streaming live daily on BookMap Discord and the BookMap YouTube channel, excuse me, on 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 limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk disclosure, creating futures equities and options involves 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 and the focus of the Options-Doug chat channel in Discord is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. 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 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 in my process is execution. And I look at real-time order flow in BookMap and real-time market maker hedging flow in SpotGamma Hero to confirm my thesis and for setups for entries and exits. And just to be clear, I will talk about setups today and I will be talking about an underlying whether it's ES or NQ futures or stock like Nvidia or Tesla. But I'll be talking about setups in the underlying and again you can take those trades any way you want with futures with options or shares of stock. And finally questions and comments are welcome and I'll be watching the option stash dug chat channel and discord and the chat and YouTube for your questions and comments. So please post your questions and comments. It makes it makes this session more interesting for me and hopefully for everyone else as well. All right let's get started. My agenda for today what I want to talk about first of all news items for the week events wrap that up for the week. I'll talk about my positional analysis and then talk about setups. So first of all today there was some PMI data out at 945 a.m. Eastern time and then the big event today is options expiration and that is the monthly April monthly options expiration. And there are a couple things to note about that. Let's take a look at that now. So the first thing I'm looking at SPX data this is from spot gamma and this is the expiration concentration showing delta notional on the vertical axis and date of expiration on the horizontal axis here. So this is the April expiration right here and the this is showing call gamma or called delta delta this is showing delta call delta or positive delta above the zero line shown with the orange bar and then put delta shown with the blue bar below and you can see the orange bar is larger than the than the blue bar indicating this is a call dominated expiration. So that's one thing to note and then let's take a look at the this gamma model here and this is showing the gamma curve market makers position and there are a couple lines here this kind of light green line is showing the current expiration and then this gray line like gray line is showing the next expiration. So this is showing that how gamma will change from today to Monday showing that the gamma the positive gamma up here will be reduced to the next expiration. So some of the positive gamma that's in the market excuse me some of the positive gamma that's in the market now will be reduced and that positive gamma remember when market makers position on the gamma curve is positive that means they have to trade excuse me they have to trade against price to hedge their delta exposure and that tends to subdue volatility and leads to lower trading range again market stuck in a range so that will be reduced after expiration next Monday so that should open up the market for more volatility and spot gamma is looking for more downside movement starting next week and I've talked about this before and they have talked about it as well some previous expirations that were call dominated positive gamma were August of last year and then February of this year and the markets did drop a little bit after the expirations those again the August 22 and the February 23 so just something to keep in mind that that positive gamma will be that supporting the market will be going away next week after this monthly expiration all right let's take a look at positional analysis now so let's start with start with charts here go over the levels that are in play for today and this is the excuse me I'm sorry having a little bit of a problem with my voice today it may be spring allergies right so this is the ES futures SAP 500 futures and book map and before I dig into this chart before I go into further detail I'm going to take a look at a larger time frame so I'm going to start with a thinkorswim chart this is SPX and it is a 20 day one hour chart just showing price and key gamma levels and I'm also showing the lower and upper edge the expected move for the week that show them with this purple line there's the lower and the upper shown with the upper purple line and then I'm also showing the lower edge and the upper edge of the daily expected move and I'm starting to track that and so far my experience has been that SPX is trading within that daily expected range indicating to me that it's better to sell premium if the expected range is less than the actual range implied volatility greater than realized volatility in my mind that leads to or suggest selling premium all right so that is the again the upper and lower edge of the daily and weekly expected moves now let's take a look at some key gamma levels so first of all here's the spot gamma put wall that's the strike with the largest net negative gamma and note that that level did drop from yesterday it was 4,000 yesterday drop back down to 3,900 and then the key gamma strike remains at 4,150 that's right in here in this cluster of levels also the volatility trigger is just below that at 4,135 and that is spot gamma's proprietary gamma flip level below that level market makers position on the gamma curve is negative and they have to trade with price to hedge their delta exposure and that tends to increase volatility and that is typical of a negative gamma environment and then above that level just the opposite market makers position on the gamma curve is positive and they have to trade against price to hedge their delta exposure and that tends to subdue volatility and note the 4,150 is also the call wall and that drop down from yesterday at 4,200 yesterday to 4,150 so those are the primary levels the call wall put wall volatility trigger and key gamma strike or absolute gamma strike and the call walls the strike with the largest net positive gamma and that can be expected to act as resistance right so those are the primary spot gamma levels that provided to spot gamma subscribers and for a variety of platforms here we're looking at thinkorswim again let's take a look at one other thinkorswim chart and this is for today showing a one hour one minute chart showing the levels that are in play and so far the primary levels have been this 4,135 volatility trigger that acted as resistance price moved down and reversed higher just above the lower edge of the daily expected move and note for those of you who have asked about this and watching it this is I'm this is was set at the open today so I looked at the daily expected move plus or minus and I added that and subtracted it from the opening price of SPX so the volatility trigger level has been in play also this lower edge of the daily expected move and then also this 4125 large gamma to level has acted as a big magnet for price reversion to mean up up and around that and looks like most recently now acting as support alright so that is SPX again with a one day one minute chart now let's take a look at book map and I'll go into more detail with setups in a few minutes I'm just pointing out the key levels right now so here I have the same levels on a couple of different columns the first is the spot gamma cloud notes and again these are provided to spot gamma subscribers for a variety of platforms and here they're shown for book map and the form of cloud notes that are updated automatically and I'm using a slightly lower point difference between ES and SPX and I'm showing those levels and my cloud notes columns so I'm showing here for example the volatility trigger 4135 with the 22 point difference between ES and SPX so that's why the volatility trigger the SPX 4135 volatility trigger is shown at 4157 for ES and note it did act as resistance at the open in about an hour later at 1030 and I'm also showing spy levels and here's the 413 spy 413 volatility trigger and also the ES big round number levels the zeros in the 50s so pretty choppy day in ES SPX definitely a range day today alright that is the S&P 500 again I'll talk in more detail about setups in a few minutes the range day setups alright let's take a look at the NASDAQ now and I've started to track this more in a positive gamma environment there's not a lot of movement in the S&P 500 there's typically a little bit more movement and more volatility in the NASDAQ so I've started to track that and I've got again the same same notes first of all from spot gamma here these are NDX levels and spot gammas was you was using a 23 point difference between NDX and NQ I think they just take the same number they're using for ES SPX that was not even close I calculated an 87 point difference so I'm showing those revised levels in my cloud notes here so right now it looks like NQ is trading just below the 30-20 volatility trigger for NDX and also there are combo levels here this is combining NQ and QQQ levels into one common number converted to an equivalent NDX number and then converted to an equivalent NQ number and I'm also showing the key QQQ levels here this is the 316 volatility trigger for QQQ and that has acted as a magnet for price today both as resistance there for a short setup and again resistance for a short setup and then finally as support and note that price is clustered really around the QQQ 316 level maybe the the NQ 1350 level and the 13,000 level maybe more accurately actually the NDX 13,000 level and that's shown with the session volume profile here and I see trader HE has joined us so I welcome any comments on NQ he's the expert on trading NQ all right so those are the levels that are in play for for the S&P 500 and for the NASDAQ combination of for the S&P 500 the combination of the SPX and spy levels and then for NQ a combination of the QQQ NDX and NQ levels have all been in play for today all right let's talk about shifts in levels now and there were quite a few first of all for SPX as I mentioned before the put wall move lower from 4,000 yesterday to 3,900 today and the call wall also moved lower from 4,200 yesterday to 4,150 so that's for SPX again put wall call wall all moved lower I interpret that as bearish and then for spy the volatility trigger drop slightly lower from 4,14 yesterday to 4,13 today and also the call wall drop lower from 4,20 to 4,15 and the key gamma strike drop lower from 4,15 to 4,10 so the main thing there was the call wall and the key gamma strike both drop lower and again I interpret that as bearish and for NDX the volatility trigger put wall and call wall a moved higher I interpret that as bullish and then for QQQ the volatility trigger dropped lower from 3,19 yesterday to 3,16 and also the key gamma strike drop lower from 3,20 to 3,15 all right let's take a look at the gamma levels and we'll see where those levels come from so let's go back to our indices chart here start with SPX and here is the 4,150 level and that's the key level in play that is the key gamma strike or the absolute gamma strike the strike with the largest absolute gamma and that is also the call wall and then here's the put wall down at 3,900 so the put wall is the strike with the largest net negative gamma that can be expected to act as support and the call wall is a strike with the largest net positive gamma that can be expected to act as resistance and again remember that's the key gamma strike or absolute gamma strike as well and note also the significant amount of gamma at the 4,100 level so that's SPX let's take a look at spy and to zoom in on this chart so for spy now the key gamma strike has dropped down to 4,10 the strike with the largest absolute gamma that can be expected to act as support or resistance or a magnet for price and right now today spot gamma was looking at it the 4,10 level as support that was noted in the AM founders note and then here's the 400 put wall the strike with the largest net negative gamma support level and there's the call wall at 4,15 expect expected to act as resistance and that was also noted in the spot gamma AM founders note let's take a look at QQQ see if we can show that without a refresh no let's go to QQQ so for QQQ the primary level here is a 3,15 level that is the key gamma strike and that is also the put wall and that's pretty obvious the strike with the largest net negative gamma as well as the strike with largest absolute gamma and then the call wall remains at 3,20 and then finally let's I'm going to start taking a look at NDX looks like I'm going to have to do a refresh again let's go to NDX and not much to look at here except the 13,000 level and 13,000 is the put wall and the key gamma strike so that's where that's where the gamma is concentrated for NDX at the 13,000 level alright so we've looked at the expiration concentration we know that this is a call dominated expiration we've seen that from the expiration concentration again and from the the gamma model let's take a look at the Vana model for SPX and I'm going to go over this just for anybody that may be new here this is showing two curves the first curve is showing how and then just the light gray showing how market makers delta notional shown on the vertical axis changes with price with strike price and what this is showing is that market makers delta notional remember market makers want to remain delta neutral their delta notional will increase as price increases and they have to sell futures to hedge their delta exposure so that is just showing just accounting for the change in price and then this kind of like pink purple line is showing how market makers delta notional changes with changes in price and implied volatility and that's the Vana effect the change in delta with a change in applied volatility and this is showing on the upside here that there's not much difference in the delta only curve and the the curve that includes implied volatility and that's indicating there's not much of a Vana tailwind for markets for the SPX and that is pretty typical of a positive gamma environment then on the other hand if price drops and implied volatility increases market makers will have to sell futures to hedge their delta exposure and that tends to tends to increase volatility in a negative gamma environment all right let's take a look at some data now this is from spot gamma AM founders note and I'm just going to point out this gamma notional here shown for SPX spy NDX and QQQ and this is market makers position on the gamma curve and this in these numbers are all positive indicating on this position of the gamma curve that traders are short calls market makers are long calls and that hence the positive gamma environment and they have to sell futures as price increases again to hedge their delta exposure so these numbers are all positive and they did increase from yesterday so market makers position on the gamma curve for all these index products became more positive from yesterday all right so that's my positional analysis and let's take a look at some setups so I'm gonna go take a look at the hero indicator for those of you may not be familiar with us this is showing this is from spot gamma the hero indicator hedging impact of real time options there are two lines here the first the white is just price in the second this is the hero signal showing options trades and market maker hedging activity for a combination here combined signal of SPX spy XSP and ES futures XSP is not significant so essentially this is just showing the hero signal for SPX spy and ES and the direction indicates delta positive delta for a rising line negative delta options positions falling line and so far the total notional value for all options trades across the across the S&P 500 complex is positive looking at this number on the far right 1.7 billion that's the notional value positive all right let's take a look a closer look at this now and actually before I do this this again this is a combined signal and we can slice and dice this any number of ways first of all I'm gonna show the components of this so there's SPX and this is a little bit easier to read especially starting around 1045 traders we're taking positive delta positions in SPX note the rising purple line notional value 1.47 billion and not too far off the total signal and the next component is spy and spy is actually negative for the day and this is pretty typical that SPX going to one way and spy going the other way SPX so far strong showing a lot stronger correlation to price and then finally let's look at the futures and positive for the ES futures so again we'll end up with a combined signal shown here again with the S&P 500 and then let's take a look at some setups so I'm going to zoom in and this is typically what the signal that I use for trading the S&P 500 whether it is futures shares or SPX or spy options and a little bit of a little bit of a difficult read this morning so the first setup that I want to take a look at is around 950 and just just a reminder when I'm using this I'm looking at I'm actually looking at two or three different screens so at a minimum I'm looking at book book map on one screen and hero on another screen all right so let's take a look at the first setup and we really have a non confirmation from a hero or it took a while for a hero to start dropping lower but price started moving lower around 950 so let's go take a look at book map now zoom in so we can see see this closer all right so here's the first setup and I'm reading when I'm looking at this I'm reading order flow and hedging flow and here's the first setup this break of the trend line and it reverses lower just below the 4135 volatility trigger the spy 412 level and also this 4135 level and note in the sub chart here order flow is confirming that the following pink line there showing cumulative volume delta and that's pretty obvious you don't even need to look at that line you can see all the pink dots pink volume dots coming in there market sell orders aggressive sellers moving price down toward the lower edge the daily expected move and I'm showing a something a little bit different for futures this is something that I sat at the close yesterday and that's down there all right so that was the that was the first setup then let's go back to hero and this was a much easier read here around 10 o'clock there's a slight divergence hero starts to rise and then price follows just a few minutes later note the purple line increasing first then the white line so let's go back to book map now zoom in again so here is the here's the long setup just after 10 a.m. and we'll read the order flow first of all note the iceberg buys that shown by this light blue line in the sub chart iceberg buys these are order types that larger traders used to hide their size also shown with the on-chart indicator here that one is kind of obscured by the by the sell-stop order so larger traders buying this move down with iceberg orders they're using to hide their size then order flow shifts bullish note the green volume dots market buy orders aggressive buyers start to come in as options traders were taking positive delta positions and price moves back up all the way to the 41 35 volatility trigger level looks like it spent a little time at the spy 411 also the 41 25 level spy 412 and then makes it all the way up to the 41 35 volatility trigger and a new to Paul ask hey Doug any discounts right now not that I'm aware of probably not the not the time of year for discounts so I use book map and spot gamma and again I'm not aware of any any current discounts and typically those products both book map and and spot gamma are not discounted but a you know I suggest taking a look at the taking a look at the Twitter feeds for both book map and spot gamma for any potential discounts alright so there's our long set up we saw again in spot gamma that options traders were taking positive delta positions before a few minutes before price moved up and we also see that large traders are buying weakness they're buying this move down with large iceberg orders they used to hide their size and them as the price reverses aggressive buyers come in and also the yellow line indicating that bystop orders are fueling the move higher and price makes it all the way up to the 41 35 volatility trigger before order flow levels off looks like price makes a kind of a head and shoulders top there then moves lower let's go tip back and take a look at hero now a little bit easier see there so this is the the move lower shown with hero so this was a after the initial move we saw a divergence long and this is a divergent short let's go back and take a look at book map and there's the short again the head and shoulders top at the volatility trigger order flow shifts bearish cumulative volume delta falling then sell stop orders start to feel the move lower more aggressive sellers coming in pink volume dots and price moves down toward the 410 level and I should have should have noted that that is the the key gamma strike so that should be should be red or white background with red text indicating that is the 410 key gamma strike so I just didn't update that level in my spreadsheet so there's the move down so far we've seen three range day type moves all right let's take a look at at hero again you know another divergence long hero starts rising price moves up a few minutes later and this starts about 1045 let's go back and take a look at book map almost go right so here's the move higher note again iceberg orders coming in as price drops here here so we know that traders are taking positive delta positions like blue line is rising traders are taking long positions with iceberg orders and looks like price gets stuck at VWAP all right and Hector asked what is the purpose of this section and he's referring to this right here and this is just showing data that is in the sub chart indicators and I have a bunch of stuff that I'm really not looking at I need to turn this off so I have the main thing the main things are icebergs stops and CVD and I think some time ago I I separated out the CVD to show larger orders I I just don't look at that typically I'm just looking at CVD but this is showing CVD for orders greater than or it may be in a range again I haven't looked at that in a while so the main numbers are shown here and this is just the cumulative value of the three lines in the sub chart there icebergs stops and CVD for whatever position I'm looking at you know whatever the current time in the as I've dragged back and forth so I've frozen my screen here and this is the these are the icebergs stops and CVD for this current level of price of time I'm sorry right so let's get back out so and you know after this down move up up move down move and then up move again quite a bit of consolidation between the 41 25 and the 41 30 level and then finally it looks like this is resolving higher order flow slightly bullish let's go take a look at hedging flow now so overall for the SPX signal bullish positive 2 billion that's the notional value all right so that's the SPX and when we zoom out we can see the overall signal again is is bullish all right let's take a look at the NASDAQ now and then after that I'll look at a few stocks let's zoom in so in the NASDAQ pretty similar pattern to the S&P 500 in this morning this morning maybe a little bit more clear for a short setup anyway this is what I was looking at that hero really wasn't supporting a move higher and then watching order flow in the NQ and QQQ and the same trend break set up in NQ QQQ as as I just showed an ES so the first setup was a was a short then a divergence long and this divergence short was a little bit clearer and then a confirmation long so short long short long all right let's go take a look at the NQ now all right trader HE if you're listening I again welcome any comments on NQ he's the again the expert on NQ so I'm going to zoom in here so again I'm looking at two screens at the same time and I'm looking at again book map and hero on two different screens so here's this short setup trend break at the 316 volatility trigger level this is the QQQ 316 volatility trigger definitely bearish order flow a lot of the pink volume dots market sell orders and to move down toward the lower edge of the daily expected move so prices heading down toward that target doesn't make it there before price starts to move higher so heading down toward the 314 level the QQQ 314 and again the lower edge of the expected move for the day order flow shifts bullish note the green dots coming in here and there are also some iceberg buys not nearly the size of ES that's pretty typical NQ that the order size is a lot smaller and price moves up back toward the 316 level and above so this first setup really was a little bit clearer to read this first short a little bit easier to read in order flow here and the second stop setup remember we have a divergence long now let's take a look at the next setup a divergent short at NDX 13000 or just below it so price spend some time at the QQQ volatility trigger before moving lower order flow shifts bearish this was a divergent short with hero so hero confirming the short so we're looking at range day trades and the NQ NASDAQ as well and then a divergence long finally just above NQ 13000 and again the shift in order flow pink dots on the way down large traders are buying they're buying weakness with iceberg orders and there really was not of much of a shift shift bearish in the order flow so price moves higher for the last setup this divergence long so more range day setups in NQ both short and long and RJ ask would I be looking short now at the call wall for which instrument in Q so let's see are we up against the so the QQQ call wall is at 320 and the let's go take a look at the NASDAQ call wall is pretty far up here as well so I have it all the way up here alright so NQ the call wall is at 13100 and again remember I am looking at an 87 point difference between NDX and QQQ let me show you so I added right now it's even higher so I added another another little widget to my think think or swim chart another think script this is NQ minus NDX shown a real time and right now it is 88 89 90 points I was using 87 so that changes quite a bit so the call wall for NDX is quite and that's right so RJ asked the call wall for in terms of an NQ number is 13100 NDX 13100 plus 89 so I've got the call wall way up here and then note also the here's the 320 QQQ 320 call wall so both are not really in play at least for right now unless the NASDAQ really gets going so right now I have the NASDAQ trading around the NQ volatility trigger and this 13 025 large gamma 3 level alright let's take a quick look at some stocks and the first one I want to take a look at is Amazon nice nice uptrend in Amazon today let's take a look at hero start with Amazon and that is a beautiful setup in Amazon today and traders are buying calls and selling puts that's shown by the orange is showing the call buyers both lines rising traders are buying calls and selling puts and that is just a steady steady uptrend so that's Amazon here's Microsoft this this vertical line here shows a large block order and institutional order and let's see what they were doing so a large order of traders an institution somebody large selling a lot of puts so you know it's hard to hard to know if they were selling let's take a look at the next expiration see if it is options that expire today and yes it is so they were they were selling puts that expired today that shown by this I turned off the all expirations talked about all expirations and then this is showing the zero DTE the next expiration again showing this large vertical line right here whoops somebody selling a lot of puts to expire today and they could have been taking profits I know who knows right so there's a question about options trade and equity indexes and that thank you very much RJ for reminding me I meant to talk about that so here's how I've been approaching the SPX versus versus NASDAQ trading NASDAQ since it's a higher volatility higher beta larger trading range and then selling options in the SPX so this is SPX a an iron condor legged in so short put vertical in the morning and then as price moved up then a short call spread really didn't add a lot to it only for only 40 cents added added some risk and this is per one contract so RJ that's that's how I'm approaching it options trades with S with SPX and let's just go back and take a look at hero so I'm just looking at first of all let's go back to the SPX so looking at as heroes rising and heroes starts to rise as price approaches that lower edge of the daily expected move then I put in that short put vertical just below that lower edge of the daily expected move so for the daily expected move that I set at the set at the open today was that 41 12 so let's go back and take a look at thinkorswim so that is a 41 10 4105 put vertical so just set it and forget it order flow and hedging flow birth both confirmed that price was going to move up and I assumed that that lower edge the daily expected move would hold okay that is that's all that I had for today so we looked mostly at the indices the S&P 500 and also Nasdaq and there were some a few stock setups Amazon we looked at Microsoft both nice uptrends confirmed by hedging flow and there was also a good setup in Nvidia divergence long as well but my time is up I'm going to wrap it up for the day and for the week hope everybody has a great weekend thanks for watching thanks for your questions and comments and again have a great weekend I'll see you next week thanks bye