 Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern Time. Before I get started, I need to go through the Disclosures. General Disclosure. All Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk Disclosure. Trading futures, equities, and options 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 Options-Doug chat channel that's a great place to post questions, comments, and content related to the topics of my presentation and the topics of the channel that I'll go through in just a moment. I'm also on X, formerly known as Twitter. My name there is at Doug Place. And by the way, Bookmap Discord is free and available to everyone whether you subscribe to Bookmap or not. There's a lot of great content there, great discussion. The focus of my presentation today is the focus of the Options-Doug chat channel is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading and the first is planning, and I use positional analysis. I look at how traders and market makers are positioned in the options market and how those positions change from day to day, day to day to develop a thesis in trading range and volatility for the day as well as a directional bias. And the second step in my process is execution. I look at real-time order flow in Bookmap and real-time market maker hedging flow in Spot Gamma Hero to confirm my thesis and for setups for entries and exits. And when I talk about setups today, I will be focusing on an underlying asset. And setups in that asset can be taken any number of ways. With options shares, for example, the S&P 500, setups can be taken with ES futures, spy shares, spy options, SPX options, or even ES options. And generally, the setups that I talk about are suitable for day trades, swing trades, or longer-term trades, depending on your timeframe. Questions and comments are welcome and I will be watching both the options-dash-dug 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 is my agenda for today. Friday, December 22nd. First of all, I want to go over news items for today as well as the... Well, actually today to wrap up the week I'll briefly mention next week and then I'll go through my positional analysis. Then I'll review some setups from earlier today and then I'll take a look at the live market. And when I get to the live market, if anyone has any stocks they want me to take a look at, please let me know and I'll be glad to do that. All right, let's get started with news items, economic data, and events for the week. There were a couple of data releases this morning. So let's take a look at that. So first of all, durable goods orders and PCE data came out at 8.30 a.m. eastern time. Durable goods was much greater than expected and also much greater than the previous reading on durable goods. And then the PCE data came out also at 8.30 a.m. eastern time and that was less than expected and also less than the previous reading and both of those data releases were bullish. We'll take a look at the reaction in the SB 500 in just a moment. Then 10 a.m., Michigan consumer sentiment came out and that was also greater than expected and greater than previous. So overall, very bullish, good news, economic data today. All right, so this is the ES Futures and Bookmap and here's the reaction to the data releases. 10 a.m. initially of 8.30 a.m., I'm sorry. Initially there was actually a drop lower and that quickly reversed higher. Aggressive buyers coming in just around VWAP that's shown by this line here and then price consolidated and then continued higher after the cash open right here as more volume came in. All right, so good news, good news, economic data and bullish reaction on the market at least for the morning. All right, next week, of course, Monday is Christmas. There will be no streams on Monday. I will not be streaming. There will be no book map streams. The markets are closed. Everyone have a great Christmas and I'll be back on Tuesday. So we'll wrap up the final week of the year starting next Tuesday. All right, let's get to positional analysis now and this is the, again, the SAP 500 Futures and Bookmap. I'm going to start with the SAP 500 and before I take a closer look at this chart I want to start with a larger timeframe with the underlying index, that's SPX. I'm going to start with a one-day chart and this is going to focus on the current rally that began October 30th and the rally has continued higher for a variety of reasons. IB Collapse, Put Vanna Rally, Falling Treasury Yields, FOMC Announcements, Good Economic Data, CPI Data and then finally, I guess really Wednesday the most significant down day in the rally was again Wednesday. I talked about that yesterday. Now the SPX and that reversal was right around the upper weekly expected move. I'll talk more about that in just a moment and now SPX is back up to that upper weekly expected move. So there's the rally so far just shy of just a little bit less than 700 points from the low to the current price. Note this rally that began in March and continued until July shown by the dash purple line there that was 800 points just for reference. So that's a one-day chart. So far the rally that began in October is still intact. Let's take a look at another chart now. Another SPX chart. This is a 30-day one-hour chart and I want to focus on some levels here on this chart. So I'm going to zoom in. So first of all, as I mentioned before the upper weekly expected move, the lower weekly expected move shown by the dash purple lines and note that SPX was trading slightly above that level on Wednesday before it dropped sharply. Excuse me, SPX was trading above that upper weekly expected move on Wednesday before it dropped sharply. Again, I provided some details about that yesterday and now SPX up close to that level again the upper weekly expected move again shown by the dash purple lines lower and upper weekly expected move. I'm sorry, I accidentally muted my microphone. All right, so the dash blue line showing the upper daily expected move and the lower daily expected move. Now the dark red lines are showing SPOT gamma levels. These are proprietary SPOT gamma levels provided to SPOT gamma subscribers showing on a variety of trading platforms. This is thinkorswim. So these levels are based on gamma weighted open interest. SPOT gamma takes the open interest data that's provided once a day sometime overnight from the OCC and applies their own algorithms to the data to come up with these levels. So I'm going to point out the key daily levels So first of all, the put wall is at 4720. It's right here. The label is obscured but it is at 4720. That's a strike with large net negative gamma and that can be expected to act as support. The next level up is the volatility trigger and that is SPOT gamma's proprietary 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 like SPX is trading now market makers position on the gamma curve is positive. In a positive gamma environment market makers have to trade against price to hedge their delta exposure and that tends to subdue or decrease volatility. And the next level up is the absolute gamma strike at 4800. That's the strike with the largest absolute negative and positive gamma. That's where most of the gamma weighted open interest is concentrated. And then finally the call wall way up here at 5000. That's the strike with the largest net positive gamma that can be expected to act as resistance. And certainly that's not in play. Most likely for the rest of the year. Alright so these levels all shifted higher from yesterday. That's very bullish. Volatility trigger put wall, call wall and absolute gamma strike all shifted higher. Again very bullish sign. Alright let's just take a quick look at a one minute chart now to take a closer look at the levels in play for today. We'll get back to book map. So here is SPX one day chart trading at a very narrow range today. Very quiet pre-holiday to trade. And finding resistance right around the upper weekly expected move and this combo level combo L1 level combining SPX and spy gamma weighted open interest into one level here shown in terms of SPX price. Alright let's get to book map now. So in book map I have my own cloud notes so I can show SPX levels. There's that 4770 level combo one level. Just below that is the spy 475 absolute gamma strike call wall and that combination of levels as long as well as the upper weekly expected move acting as resistance earlier today. And to me this is looking somewhat like Wednesday with the SMB500 stuck around the not able to proceed higher than the 475 call wall and so far the move lower yet to be seen but this is the kind of the setup leading into that move lower on Wednesday. Also QQQ we'll take a look at in a minute this morning was stuck below the 410 call wall. Alright so the again the upper weekly expected move the 4770 combo level and the 475 absolute gamma strike call wall acting as resistance and here's the upper daily expected move just above the upper weekly expected move and those expected moves are for ES not for SPX. Note there is a difference between a difference in price between ES and SPX and today it's right around 49 points and let me get to Questions, Floyd's Garage Welcome GH Welcome, glad you're here look at stock CCCC I'm not familiar with that I certainly don't have that a book map I doubt it's in in Hero I'll take a look and Joel Merry Christmas to you as well Welcome, glad you're here Alright so that's the SMB500 Levels in play for today Note this 47 spy acting as resistance before the cash open and then price broke above that level at the cash open alright let's so I talked about shifts and levels for SPX volatility trigger put wall call wall absolute gamma strike all shifted higher very bullish and for spy the volatility trigger shifted higher and the absolute gamma strike shifted higher to 475 call wall remains at 475 again that's this key level right here alright let's take a look at NASDAQ now this is the NQ futures in book map and before I take a closer look at this chart I want to focus first of all on QQQ levels this is the QQQ chart for today one minute chart here's the 410 call wall acting as resistance let's take a look at NDX now in NDX here's a combo l2 level whoops and it looks like that's right next to the 410 call wall acting as resistance earlier today and the NASDAQ also trading in a very narrow range today alright so again I have my own cloud notes so I can show the QQQ levels NDX levels and also the big round numbers in NQ the 950-17000 so here's that those two levels acting as resistance again reminiscent of of Wednesday with the NASDAQ bumping up against that 410 level and we'll talk about setups in a few minutes alright let's take a look now at Gamma Notional to see how market makers were positioned on the Gamma Curve at the beginning of the day so again this is Gamma Notional market makers position on the Gamma Curve at the beginning of the day for the SP500 NASDAQ and also 2000 note all these numbers are positive note all these numbers are positive and for the most part shifted higher from yesterday so today the SPX and SPY Gamma Notional shifted from negative yesterday to positive today also QQQ shifted from negative yesterday to positive today and IWM also was positive yesterday and shifted higher more positive today so what this means when Gamma Notional is positive this is market makers position on the Gamma Curve at the beginning of the day and this on this portion of the Gamma Curve this indicates what SPY Gamma assumes is that traders are short calls market makers are long calls hence the positive Gamma and they have to trade against price to hedge their dealt exposure and that tends to subdue or decrease volatility alright so in a positive Gamma environment this is mildly mildly positive Gamma I'm looking for more trading range lower volatility mean reverting price action rather than large moves and big trends I'm going to skip over the Vanna model there's nothing to see there in a positive Gamma environment there's really not much of a Vanna headwind or tailwind let's just take a look at the absolute Gamma for SPX since there were such large shifts today I'm going to zoom in on a portion of this chart so this is the absolute Gamma absolute Gamma chart for SPX showing Gamma on the vertical axis and the strike price on the horizontal axis the orange bars are showing call Gamma that's positive Gamma blue bars showing put Gamma or negative Gamma let's take a look at a couple of these strikes alright so there's 4800 let's see alright 4800 and that is the absolute Gamma strike that's the strike with the large absolute negative and positive Gamma so just add up the orange bar with the blue bar that's the most absolute Gamma so that's 4800 here's the call wall at 5000 and that is basically the orange bar minus the blue bar so that's a strike with the largest net positive Gamma let's see if we and there's the put wall that's a strike with the largest negative Gamma so the blue bar minus the orange bar and it certainly is not the strike with the largest put Gamma but it is the strike with the largest absolute negative Gamma and of course at 4700 there's much more put Gamma 4650 4600 and so far the 4700 strike has been spot Gammas kind of lying in the sand for a risk on versus a risk off environment, risk off below alright so that's the absolute Gamma landscape for SPX alright let's take a look at some setups now I'm going to start with the SP500 and the first thing that I want to do is take a look at what options traders are doing today let me get back out so what this chart is showing this is the hero signal this is from spot Gamma available to spot Gamma subscribers this chart is showing price for SPX white line and the hero signal hedging impact real time options for a combined signal for the SP500 that's SPX, SPY, XSP and ES Futures combining options trades a market maker hedging activity all into one combined signal shown here on this hero signal so everything that we've looked at so far other than bookmap has been based on static data that's updated once a day again SPOT Gamma takes the open interest data from OCC applies their own algorithms to come up with the information that we've looked at so far that I use in my planning process and now we're looking at real time data so this is the execution part of my process and I like to look at what options traders are doing as well as order flow and bookmap to make my trading decisions so again this is the hero signal hedging impact real time options let's zoom in on this chart now so what I want to focus on first of all is this morning setup it took a while to play out but starting just before 10am traders started taking negative delta positions in the SB500 note there are a couple of very timely flow alerts these alerts indicate significant options activity something to get your attention now let's separate outputs and calls so what this is showing is the orange line is showing calls when the orange line is rising that indicates traders are buying calls and they have to buy ES futures to hitch their delta exposure and the blue line is showing puts so when the blue line is falling that indicates traders are buying puts so initially from the open traders started buying calls and just before 10am they took the foot off the gas they stopped buying calls and they continued buying puts and price moved lower so when we break out puts and calls that provides much more clarity about exactly what traders are doing buying calls in the morning price rises they take the foot off the gas they stop buying calls they continue to buy puts and price moves lower at those levels that I talked about before so let's go back and take a look at book map let's go back to ES let's zoom in just a little bit so initially traders started taking as we know from the open traders were buying calls just before 10 they take the foot off the gas they continued to buy puts price reversed lower right below the upper weekly expected move chopped around right around the 475 absolute gamma strike did one more test made one more test of the upper weekly expected move and then move lower the volume dots in book map show market buy minus sell green dots indicate more buyers than sellers magenta dots indicate more sellers than buyers and ES finally failed below that combo level did a final test of the 475 call wall just right around 1045 aggressive buyers start to come in and then price started to move pretty sharply lower and notice the drop was fueled by sell stop orders that's shown by the yellow line also shown by this on chart indicator with the small red dot so not a lot of movement and ES but pretty clear read once you look at hero and here in book map it took some patience to wait for it keeping in mind again the reversal at the 475 level on Wednesday definitely keeping that in mind while watching this so a short setup here and ES this morning again took some patience and ES continues to chop around let's take a look at nasdaq now oh and GH ask what do you think about dealing options around stock earnings time there are many people that do trade earnings trades typically they are selling premium in one form or another often you have no idea which way stock is going to move this implied volatility increases up to earnings and that implied volatility drops after earnings so a lot of people do trade earnings trades I typically do not to me it just seems like it's not as certain as I like so no I I don't trade earnings trades but a lot of people do alright so this is the ES let's take a look at nasdaq now nasdaq very similar setup zoom in on this just a little bit alright so move up after the data release say 30 am consolidation then at the cash open price jumps higher up to levels that you assume may act as resistance the 410 did act as resistance earlier this week alright let's go see what options traders were doing let's go back to hero go to nasdaq so this is a combined signal for NDX and then QQQ zoom in on this just a little bit so here's the short setup in this morning initially traders are taking positive delta positions right around 940 that 945 that reverses and it took a while but price finally moved lower we'll see what traders are doing so very similar to the SB500 initially they were buying calls shown by the rising orange line right around 950 call buyers take the foot off the gas they start selling calls and right around 945 traders start buying puts note both the blue line and the orange line moving in the same direction that's a very powerful directional indicator let's go take a look at book map and here's the reversal just right just before 10 am you can see the shift in order flow aggressive buyers on the way up green volume dots then aggressive sellers start to come in nasdaq makes a lower high aggressive sellers start to come in and setting up setting up a short as traders are selling calls and buying puts both the blue line and orange line moving in the same direction very powerful directional indicator now nasdaq I don't know if there's something going on this may be reminiscent of Wednesday let's check yep there we go the sb-500 and nasdaq moving lower let's go take a look at hero and here note the hero signal started moving lower right around 1250 let's take a look at sb-500 and gray said you called it Doug yeah he did at 1050 today I posted in discord the resistance at the 475 level and starting to look like Wednesday so let's take a look and see today the zero DTE traders are not participating as much as they were on on Wednesday let's zoom in on this yesterday zero DTE traders were this that's shown by this green line that's trades that expire today the options that expire today and this is all expirations the purple line so that is expirations today next week next month so on Wednesday the zero DTE traders were really driving a lot of that price action and you could tell by the very close correlation correspondence between the green line and the purple line and also the notional values were very similar and today it looks like this green line the notional value is less than half of the notional value for the purple line the all expirations let's go back to total and this the hero line here about 115 started to make lower highs and price followed pretty closely and the total signature definitely provides more clarity to Nasdaq one other signal I want to take a look at is this mag 7 what this hero signal is showing is a combined signal for the stocks known as the Magnificent 7 Apple, Amazon, Google, Meta Microsoft, Nvidia, Tesla traders net for the day taking negative delta positions zoom in on this chart both the very strong correlation between options trades hedging activity, hedging flow and price action hero starts to make lower highs starting around 115 the high point for the afternoon this is an important signal to look at because these 7 stocks make up such a large portion of the Nasdaq especially and also the SB500 it looks like I need to refresh this chart here we go, we're back let's go back to book map so ES below the opening price maybe finding support at this 4750 level and also ES4800 check Nasdaq still looking pretty bearish to me a lot of aggressive sellers magenta volume dots on the way down note these falling stop line sell stop orders helping to fuel the move lower that's usually a pretty good directional indicator the stop orders let's take a look at some stocks Apple not a lot of movement today but 195 is the key gamma strike acting as resistance let's go take a look at hero go to Apple and bearish day here and Apple traders taking negative delta positions from the open levels off then move sharply lower note that the vertical line there that's a large order large institutional order note also the timely flow alert just a couple of minutes after the cash open so typical Apple not a lot of range but pretty clear bearish setup and a reversal at again the 195 key gamma strike price breaks lower does a retest the next is meta so bearish day here in meta let's take a look at hero and note for meta 355 is the call wall look at hero go to meta multiple flow alerts as meta was trading above the call wall and these flow alerts spot gamma has found often act as very good mean reversal indicators multiple flow alerts and here's the one that kind of the final final straw there as meta broke below the call wall the 355 call wall let's see what traders are doing and the rising blue line indicates traders are have been selling puts today but the call buyers definitely in control of the call sellers are definitely in control today that's shown by the falling orange line traders have been selling calls pretty consistently since about 950 945 950 let's go back to book map so multiple entry points I'd say multiple aggressive entry points before 11 and then finally the one that was pretty clear with that last flow alert just around 1056 was this break of this trend line here and also then I guess this wedge pattern and the break at 350 note the magenta volume dots here a lot of aggressive sellers and that's good for about a three point drop in meta and gh says Doug was it you that said may short ticker pol days ago not me I'm not familiar with that stock and also GA ask gh ask when traders sell calls that's a bearish sign correct yes when traders sell calls market makers by the calls they want to remain delta neutral so they have to sell stock to hedge their delta exposure in the case of a stock yeah we'll take a look at Tesla in just a moment alright so there is there's met a multiple entries lower high just above VWAP and then this trend break here with the last flow alert its traders taking negative delta positions Microsoft earlier today was having somewhat of a bullish day now seems to be dropping pretty sharply let's just go back and check ES again see what it's doing so ES continues to fall now down below the 473 volatility trigger let's go back to Microsoft and this is pretty fast movement for Microsoft alright let's take a look at hero again and see what options traders are doing Microsoft note a lot of red here Microsoft one of the these are this is the these thumbnails I believe are showing the last 15 minutes of hero data so Microsoft note 375 is the call wall key gamma strike acting as resistance the theme of the day call walls QQQ spy Microsoft acting as resistance and note Microsoft was bullish in the morning with these alerts getting your attention indicating significant options activity as traders were taking positive delta positions alright so there's Microsoft and then Tesla let's take a look at Tesla and Tesla has been bearish all day note again the timely flow alerts indicating significant options activity as traders continue to take negative delta positions alright CWR group yeah there's Tesla CWR CWR group says key gamma strike was 250 yes it's still at 250 there it is right here just at the bottom of the chart key gamma strike 260 is the call wall let's go take a look at book map Tesla bearish day here in Tesla note around 1230 all the aggressive sellers that start to come in shown by the magenta volume dots a couple of tests of VWAP here trend break pretty easy read here in book map trend break retest of 256 aggressive sellers traders taking negative delta positions and that's good for a quick three point move and still holding if you got in there as aggressive sellers sell Tesla and options traders take negative delta positions alright GH ask about CCCC never heard of that we'll see if I seriously doubt that is I've never heard of that right sorry that's not in not in hero here let's go back to the S&P 500 traders continue to take negative delta positions check on NASDAQ so it looks like now hero is leveling off traders are starting to buy the dip in NASDAQ shown by the rising purple line making higher highs now higher lows let's check mag 7 that signal continues to move lower about a few minutes left does anyone have any other stocks they want me to take a look at I'll be glad to do that let's go back to book map Tesla continues to drop it looks like 250 may be that next target insight CWR NVIDIA most likely bearish as well NVIDIA definitely trending lower down these volume dots turn break retest of 490 and a short good for a good 5 points in NVIDIA let's go take a look at hero and see what options traders are doing 490 is the key gamma strike 48750 is the hedge wall and 480 is the put wall let's zoom in on this more flow alerts right around 1045 just before 1115 but NVIDIA really doesn't do much until that setup that began just after 130 that trend break retest of 490 key gamma strike and then price continues to move lower back to book map and note all the magenta volume dots and again there's the setup trend break retest of 490 key gamma strike again good for a quick 5 point move lower in NVIDIA let's go back and check SP500 G.A. asks is it true when large orders to buy are in order book and filled the stock goes up indeed it may sound strange but I've heard some say it's opposite to buy makers must sell so goes opposite I'm not sure I understand your question let's just focus on options so when traders buy calls market makers sell the calls and they have to buy stock to hedge their delta exposure they always want to remain delta neutral on the other hand just looking at looking at the order book when there are more buyers than sellers more aggressive buyers and sellers price will go up typically and when there are more sellers than buyers more aggressive sellers price will move lower so options are a little bit different way of thinking about things Paul wants to look at MARA we're on digital let's take a look at that kind of a bitcoin proxy write that again and earlier today we had a bullish day and MARA traders were buying calls and note here's a perfect example of that GH when traders buy calls shown by the rising orange line market makers sell the calls and they have to buy stock to hedge their delta exposure and notice as soon as they stop buying calls price moves lower and really starting about 1215 they started buying puts that shown by the falling blue line and then that accelerator to round 2 so right around 2 they really started 145 2 they really started selling calls buying puts and price dropped and SB 500 hedging flow hero signal continues to move lower now it looks like let's go to book map now the SB 500 is already broken below the SPY 473 volatility trigger and now it's breaking below the SPX 4740 volatility trigger that was noted as support and the spot GAMMA founder's note so that's definitely bearish with the SB 500 breaking below these levels let's do one last check of NASDAQ and for NASDAQ 407 QQQ 407 is the volatility trigger and call walls acting as resistance today and now price for the SB 500 and NASDAQ is breaking below the volatility triggers for QQQ SPY and SPX alright so there you go looks like a repeat of Wednesday resistance at the call walls and options traders in the afternoon driving price lower alright my time is up I want to thank everyone for watching thank you very much for hanging with me on this Friday afternoon before long Christmas holiday weekend I want to wish everyone a very merry Christmas if you're traveling stay safe have a great wonderful Christmas holiday and I will see you on Tuesday alright thanks again everyone happy holidays merry Christmas and I will see you on Tuesday thanks bye