 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 go any further, let me go through the disclosures. General disclosure, all Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. As a reminder, my presentation and the Options with Doug chatroom and Bookmap Discord is very focused and the focus 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 that is based on positional analysis and I look at how traders and market makers are positioned in the options market and how those positions shift from day to day to help me develop a thesis regarding volatility for the day, the expected trading range, 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 market maker hedging flow and Spot Gama Hero to help confirm my thesis and to find setups. And questions and comments are welcome. On topic questions and comments are welcome. Okay, got that out of the way and now let's get started. So my agenda for today, I'm going to talk about news items and this is economic data that was released this morning as well as additional economic data that will be released tomorrow and Friday. And the reason I do that is that data can certainly have an impact on price action during the day and also could have an impact on how traders and market makers are positioned in the options market. So today, first of all, consumer confidence came out. This is, I guess, really kind of a minor data release but it did seem to have an impact on price action. The consumer confidence number came out better than expected and the market rallied. That came out at 10 a.m. and the market rallied after that data. And there was also data information about the consumer inflation rate expectations and apparently that was better than expected. So anyway, that was the news this morning. The market interpreted as bullish and has rallied since 10 a.m. And then tomorrow, the GDP report comes out at 10 a.m. eastern time and then on Friday, the PCE and durable goods orders comes out at 8.30 a.m. and another consumer sentiment number comes out at 10 a.m. So just keep that in mind as you trade for the day. All right, now let's go through our position analysis. Let me go to the S&P 500. So this is the S&P 500 futures and the notable thing this morning is the, I guess, the CHOP until the 10 a.m. news release and price was making higher lows and then did a final reversal at the SPX 3850 level. So what I'm looking at in these two columns, this is the spot gamma cloud nodes column and this is showing SPX levels primarily and also SPI SPX combo levels and converted to equivalent ES prices. So right now, spot gamma is adding 25 points to SPX to come up with an equivalent ES number. So price reversed at this 3850 SPX 3850 level and continued higher up until about 1115, something like that and then has CHOPped around this. Really it looks like the high volume area of this CHOP is the SPI 386 volatility trigger level and this column is my cloud nodes and I use an add-on from the Bookmap Marketplace to show this information and it automatically draws these horizontal lines as well. So this is the SPI 386 volatility trigger level and that is the spot gamma flip level. So below that level indicates that market makers would be in a negative gamma position and above that level market makers would be in a positive gamma position. So it seems to be a magnet for today and now let's talk about shifts and levels. So one interesting thing to note is the SPX and SPI volatility triggers dropped pretty substantially from yesterday. So yesterday the SPX volatility trigger was at 3975 and today it dropped down to 3830 and again that's an SPX number and the interesting thing to note is that is right next to the call wall at 3835 which also happens to be the short call in the JPMorgan collar and then the SPI volatility trigger dropped from 399 yesterday to 376 today and other shifts and levels the SPI put wall increased from 375 to 380 and then the call wall actually dropped down from 410 to 388 and that 410 was just out of play too far out of range so this drop in the call wall kind of makes sense and there were no changes to the S&P 500 and NASDAQ key gamma strikes. Let's look at the S&P 500 charts and spot gamma here and these are the absolute gamma levels. So this is the 3800 put wall for SPX and you can see the substantial amount of put gamma there that's the teal line below zero and that is a key support level and actually I think the key event for this week or at least continuing on through today and things can change as data is reported tomorrow and Friday or something happens so far I think the key event this week was the reversal lower at 3800 now this is from yesterday so December 20th and this is the reversal at the 3800 support level and put wall level so that was the key event yesterday and I think this move today appears to be somewhat of a continuation of that move from yesterday so again 3800 that's the put wall that's the key level of support and then there are other key gamma levels at 3850 and that's what held a support today and then 3900 and then finally the 4000 key gamma strike which has been the key gamma strike for quite a while in SPX and then this is the 380 level in SPI and that is the put wall as well as the key gamma strike and you can see the concentration of put gamma there so that's also a key level and one other interesting thing that I saw today was looking at the open interest change and the volume traded so the volume traded is shown with the black lines and the open interest change is shown with these teal lines they're kind of hard to see so you can see the concentration of volume and this is put data right here so we're looking at put data so this is from yesterday and the concentration of volume traded and open interest at the 3800 level right there and call data the concentration of it's a little bit easier to see on this chart the volume traded at 3850 as well as the open interest change and I checked with HERO yesterday and saw that traders were selling calls and selling puts so undoubtedly they were selling the 3800 puts and selling the 3850 calls okay let's take a look at data now some of the data and as usual one of the key pieces of data that I focus on is the gamma notional this is market maker's position on the gamma curve so what I'm looking at here is this information and this is SPX this column right here and this is SPX from yesterday afternoon and I compare morning to morning so the gamma notional for both SPX and SPI today is still pretty negative this is a substantial number for SPI here but it's less negative than yesterday so yesterday SPX in the morning the gamma notional was minus 677 and today it's dropped or however you want to look at it it's less negative to 605 minus 605 and yesterday SPI gamma notional was minus 2176 so it has become less negative to minus 1858 so that you know those are not really significant changes that does not necessarily indicate or have anything to do with price action it just indicates that market makers on this portion of the gamma curve they're in the negative gamma curve meaning that traders are long puts market makers are short puts and their delta exposure will increase as price drops and they will need to sell futures to hedge their delta exposure as price drops and then as price increases they can buy back those short futures so they will be trading in the direction of price action and this tends to increase volatility so with this kind of in this negative gamma environment you would be typically looking for a trend day rather than a range day and the VANA charts illustrate that very well and what this chart is showing is the market makers delta exposure and how it changes with changes in price implied volatility and that's shown by the green line and that's the VANA effect and then also changes as time passes and that's shown by the black line at the next expiration and that's the charm effect and the way to interpret this is to I just used a pen tool here to draw kind of a logical line through this green curve and this is indicating that market makers delta exposure delta notional again increases as price falls and they have to sell futures they want to remain delta neutral so they have to sell futures to hedge their delta exposure and vice versa as price rises they can buy back those short futures since their delta exposure will decrease and we can look back and see how that has changed from day to day so this is just showing a slight decrease in the slope of this line from yesterday and we can look at SPI and also see how that has changed so minor changes from day to day alright I'm going to pause and look for questions here let me check with YouTube and Taj asked can you use SPI or Tesla for demo and I will I'll look at both so Tesla was really choppy today and SPI was a better setup so we'll look at that and see Joe ask about post more ideas than alerts in book map I tried to but my schedule is really busy I do what I can in the morning at least I post my watch list my spot gamma hero watch list ranked by either strongest to weakest signal or weakest to strongest signal and today I posted it my strongest to weakest signal and occasionally when I see a good setup and I have time I'll post it but my intent with this is to I'm not really trying to provide a trading signal service I'm trying to provide education to show other traders how to use this information to find their own setups and there's a question about how did I draw that red line on the Vantage art and I use an epic pin it's just a download it's a screen drawing tool and Billy ask how can we use the gamma notional to determine which direction for SPI and you really can't gamma notional is more an indication of volatility and let me show something else this is the spot gap this is data that's presented in the spot gamma am founders note and this is the spot gamma gamma index and it's a proprietary measure of gamma so it's it's related to this gamma notional and let's just pop up what this is showing here so this is a proprietary measurement of the total amount of gamma and the underlying asset and so it as it moves it moves in conjunction with gamma notional and I just look at gamma notional but you can I look at this as well so when it changes gamma notional or it changes when gamma notional changes and vice versa so now let's take a look at this is what I want to take a look at so this is the spot gamma gamma index one day forward return and this is the zero line right here and what this is this is a scatter plot showing the one day return versus the spot gamma gamma index and you can see that as the point here is that as the spot gamma index becomes more negative volatility increases and you can see how the scatter plot becomes wider here and this is the the zero line for the spot gamma gamma index and you can see how the one day forward return becomes it can become more positive or more negative it's just more volatile as the spot gamma gamma index drops down to a certain point and then it starts to narrow down again so the gamma notional is just indicating volatility and again that's because market makers are trading in the direction of price rather than against it and that tends to accentuate volatility and that has been the case for most of this year with the S&P 500 in a negative gamma environment or the market makers in a negative gamma part of the curve I hope that's clear and and Mike asked about I don't think there's any way of determining whether using gamma notional to determine whether the absolute gamma strike will cause a pin or act as a support and resistance and I I don't really think about pinning I consider it more of a supportive resistance so I'm just not much of a I'm not really someone who thinks about pinning I look at all the spot gamma levels more as supportive resistance okay and that I think that's all the questions in YouTube so now let's um let's start with first of all my preparation for the morning for stocks looking for setups in all of the stocks that I follow so this is a spreadsheet that I keep and I track the stocks the key gamma strike for the stocks in my watch list every day and at the beginning of the day I take this current key gamma strike and move it over to the right and then I note the new key gamma strike for the current day and I color code it and green for example indicates that that key gamma strike increase from the previous day and red indicates that the key gamma strike dropped from the previous day so that is that is just some indication of sentiment I think whether and could be interpreted or used as a to help develop a directional bias which is how I use that number or that data so important to note here the increasing or increase in the current key gamma strike for AMD and also Snowflake and as usual a falling key gamma strike for Tesla and that has been the case for some time now I think Tesla has been falling for for quite a while so this is part of my pre-market planning for the for my watch list okay so now once the once the market opens and I post this in discord every day and the options would dug chat room this is my watch list my hero watch list and this is the older interface for for hero spot gamma hero but this is why I I'm using this because I can see the my entire watch list in one screen so this morning I ranked the the symbols of my watch list from the strongest signal to the weakest and what I'm going to do now is just go through go through these in that order and then one that I want to highlight is Snowflake and we'll look at equity hub and see how remember the key gamma strike increase from the previous day and also on a a bullish day like today you can expect a high beta stock like Snowflake to show a lot of movement so right so let's start let's go now to spot gamma hero and we'll start with the yes and I still have the my watch list still ranked at that in that same order and I posted that a little bit late today around 10 oh 10 oh 4 a.m. and need to know about the purpose of the Vantage chart is to understand how market makers may react with changes in price time and volatility so that's a I think the Vantage chart is a clear visual representation of that market makers behavior or potential behavior as price changes so you know that clearly shows that market makers will need to sell futures as the S&P 500 SPX and spy fall and they can buy back those short futures as price increases with that line that slopes upward from right to left so that's what that's showing alright so let's take a look at ES and there was a strong correlation this morning traders came right out of the gate and now this is combining the options trade signals for spy and SPX and that is what SpotGam is showing that is driving market maker hedging activity in ES so this morning they were buying calls and they continue to buy calls and that is shown by the orange line so again right out of the gate they came out buying calls aggressively and then they have continued to buy calls for the rest of the day and not doing a whole lot with puts looks like on net they are buying puts as well and again this is SPX and spy combined and we will take a look at those instruments individually so now let's go to book map and let's take a look at ES again so the again the reversal at 3850 or the final test of 3850 this morning at the 10am data then there was a strong rally up to and let's see where that went and that was actually spy 387 and I pointed that out many times it's not as prevalent today but the spy round number levels are typically pretty significant so that's where the rally stopped this morning and then looks like lunchtime shop started early and now it looks like the rally is picking up again and the next target would be the 388 call wall and then the ES chart is showing the next resistance level up above and that is the SPX 3900 level so let me just check how that compares to and that coincides very closely with the spy 388 level so that comes out to be almost exactly ES 3925 which is the equivalent to the SPX 3900 level so it looks like that's what's on deck for this afternoon ES and P500 the SPX 3900 level ES 3925 and spy 388 call wall alright let's take a look at let's go back to spy now and take a look at a hero for spy and as usual recently the spy hero chart looks a lot like ES and traders again buying calls pretty aggressively right at the open and then continue to buy calls as price increases and give me just a moment I'm going to share my other screen I've got a couple stocks that I want to look at over there so I have book map running on another computer with some different stocks and Netflix is the first one that I want to look at and that's the next one on our list and there's definitely a strong trend in Netflix today let's go back to hero here and just as a reminder what I'm looking at this hero signal is showing the the strength of the hero signal in terms of the last five days that's probably not a good one to look at let's look at let's look at block here in the last five days and the last last 30 days so this gray kind of light gray outline is showing the range of the hero signal in the last 30 days and then the colored portion is showing the range of the hero signal in the last five days so for block here it's showing that the hero signal is the strongest that it has been in the last five days and not quite as strong as it has been in the last 30 days but for Netflix it is the strongest that it has been in the last five days and the last 30 days need to know ask on spy how did you know that it will break 387 388 and not reject on the previous high for spy so let's go back and look at spy well for one I see this positive rising hero signal the purple line that's the total line so I know that traders are taking positive delta positions so I'm looking for rally continuation and like I said they continue to buy calls and that is a very powerful force that can drive a stock much higher market makers have as traders buy calls market makers are selling the calls and they have to continue to buy stock or buy futures in this case as price increases alright let's go look at book map and there's spy so we don't know if we certainly don't know if price will increase up to the call wall but I guess that it will the trade entry would have been right here the reversal higher at this volatility trigger let's just zoom in on this take a closer look at the order flow we can see the price making slightly higher highs that final reversal lower this is one of the patterns that Jay Trader showed I don't know if he showed additional patterns today but this was last week I believe one of his three patterns for 2023 this final move lower and then the reversal higher kind of the final flush out so you might want to go back and review that I believe this is one of his patterns but anyway I see in spotgamma hero traders are continuing to buy calls and this is a looks like a good long setup right here with the green dots coming in at the 386 volatility trigger breaking out of this this range in this high volume node and here you can also see the volume starting to increase right just right after two o'clock okay and we were taking a look at netflix let's go to spotgamma hero and let me check for questions on youtube okay great billy if you do have problem with a problem with discord check with book map support they will be able to help you and Mikey I don't understand your question strong for what what signal I'm not sure what you're asking there alright so let's take a look at take a look at netflix here and again this was the third on the list behind ES and spy and as usual there's a very strong correlation between options trades and price action is traders buying sell calls and puts market makers tend to hedge that activity very quickly and volatile stocks like netflix and calls are clearly driving here so traders are buying calls market makers are selling the calls and they have to buy netflix stock to hedge their delta exposure let's go back and take a look at netflix and I have not loaded the my cloud notes on this other computer for netflix and let's just see if there are any key gamma levels in play we'll go back to spy gamma here and this chart is not showing any the key gamma strike actually dropped for netflix from 300 to 280 and you would I would initially interpret that as bearish but price action, order flow and market maker hedging flow did not confirm that thesis everything is extremely bullish on this chart as well as the book map chart and we'll just take a quick look at some of these block one thing that I wanted to show on netflix I'm going to go back I'm going to zoom into the morning and there was a slight divergence that I guess really only about five minutes so it might have been it was probably hard to see but you know definitely right after the open with the stock that moves as quickly as netflix but price was decreasing as he was rising so that was just a small divergence first thing after the open there's block and also a little bit of a divergence as well I thought that pretty similar to netflix acted about seven or eight minutes and you can see it here price is falling he rose rising amd now and there's a strong correlation with hero in the morning and not so much after 1030 and let's take a look in book map and remember the key gamma strike increased for amd and this call wall was the first target and notice all the liquidity that came in right at the open and let's take a look at amd and equity hub here one thing I want to point out is this skew chart and we'll look at this for snowflake as well and this was the other snowflake was the other stock with a rising key gamma strike so this is the skew chart this is the this is the at the money strike the delta 50 and what spot gamma is showing is call implied volatility to the right of this line and put implied volatility to the left of the line and this is indicating demand it shows implied volatility which is also an indication of demand so like most stocks there's still an increase in demand for puts but any stock with a slight increase in the line to the right showing an increased demand for calls so there's a slight increase in demand for calls for amd and these dashed lines are showing the next expiration which for amd would be this Friday and then the solid lines are showing the expiration approximately 30 days out so the blue line is day before yesterday and then the green line is from yesterday both the solid and the dashed lines so slight increase in demand for calls and also there's the increase in the key gamma strike so in pre-market planning there was some indication of a bullish expectation for amd and let's go back to spot gamma now and it looks like traders are taking advantage of higher prices to start taking on bearish option positions mainly buying puts I'm going to look at Nvidia and then we'll take a look at Snowflake a little bit closer so here's Nvidia and separate outputs and calls so traders have been buying calls and that has been driving price for most of the day and again the call line is orange and that is shown when an increase is showing that traders are buying calls and that has been driving price action and now let's go take a look at bookmap and definitely a strong trend and there were several nice pullback entries this morning the first one here at VWAP at around 10 o'clock when the data came out and the next at 1030 pullback to the 164 level and then the next good pullback entry was to VWAP and 164 and the price targets are clearly shown above let's kind of zoom a little bit and see if there's anything else above so it probably won't have the energy to get up to the 170 level but that is the highest liquidity target so what I'm looking at is this liquidity here so 165 166 167 and 168 okay so great rally this morning in NVIDIA clear price targets above as traders were buying calls and then let's take a look at at Snowflake again remember this is the Snowflake is the other stock with the increase in the current gamma strike key gamma strike for today and now let's go take a look at Snowflake and strong correlation with options trades and price action and here it looks like puts are actually driving price action so traders are selling puts and that could be because the implied volatility is high in Snowflake and let me just take a look at something here I'm checking the implied volatility so implied volatility is it's not that high so anyway oops that's you know the IV percentile is pretty low although the implied volatility is about 60% so anyway traders are selling puts in Snowflake and market makers are buying their so traders are selling puts market makers are buying the puts and they have to buy stock to hedge their delta exposure and also it looks like they're buying a few calls as well or selling a few calls as well that actually that's pretty insignificant compared to the put number so let's go take a look now so going over scenario starting with this key gamma strike list this morning I see that the key gamma strike increased so if I want to do a little bit more research I can go to equity hub here and look at Snowflake and I see really even a more pronounced demand for calls than an AMD in the short term and that is for again the expiration this Friday so what I'm looking at is this again this is the line that separates put implied volatility below and call implied volatility above and the dash lines are the next expiration which is Friday and I'm looking at this increasing so I see the increase in the key gamma strike I come down here to equity hub and see the increase in the key gamma strike also the put wall but then a drop down and call wall so 2 out of 3 are bullish but I put the most weight generally on the key gamma strike and now let's go look at the chart in book map and there is Snowflake sharp rally off the 138 this morning just a minor I guess a minor pullback at the 10am data so here's the reversal lower and the by sweep aggressive traders coming in and buying and then the reversal at the 10am data down to the 140 level and another pullback with a by sweep there to around 142.50 and let's see what kind of targets there are above looks like the primary target is the 150 liquidity level and that is the let's just go back and look at equity hub here and that's the new key gamma strike right and let me check for questions in YouTube and so Mikey was asking about strong signal and what this hero signal is showing is the strength of the signal and again the last last 5 days and the last 30 days and most likely if it is on the high end of that range it's going to be positive and that just all that means again is that that signal is the strongest that has been or the most positive in the last 5 days and the last 30 days if you want to if you want to know more let's see you can go here to help here this article will explain it in more detail so I hope that answers your question right and let me just check for questions in bookmap discord no questions so my time is up I highlighted the somebody wanted to look at Tesla we'll take a quick look at Tesla pretty choppy today and here it is here's Tesla and spot gamma again pretty choppy so anyway I think I've highlighted the best trades for the day the ES of Spy Netflix and Snowflake I thought were the best trades of the day and Nvidia so again my time is up I thank you for attending thanks for watching thanks for your questions and comments and I will see you tomorrow bye