 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 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. 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 in Bookmap Discord, there's an option stash Doug chat channel that's a great place to post questions, comments, and content related to the topics of my presentation as well as the topics of the channel, which I'll go through in just a moment. And I'm also on X, formerly known as Twitter. My name there is at Doug Pless. The focus of my presentation today and the focus of the options stash 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 to develop a thesis regarding the expected trading range and volatility for the day as well as the 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 talking about setups in an underlying asset. For example, the SAP 500 setups can be taken with the S futures spy shares, spy options, SPX options, or even ES options. Questions and comments are welcome. And I will be watching both the options stash Doug chat channel and discord, as well as the chat and YouTube for your questions and comments. Please feel free to post and I will do my best to answer your question. All right. Here's my agenda for today Monday, Monday, October 30th. First of all, want to cover news items for the week that would be economic data events and earnings. Then I'll go through my positional analysis, my planning process for today. Then I'll review some setups from this morning. And then we'll take a look at the live market. 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. So first of all, really nothing today. Tomorrow. And I'm going to cover just the high impact events as well as earnings for the stocks that I follow and trade. Of course, there are many earnings reports this week. I'm just going to mention a couple of them. So Monday today, really no economic data releases. Tomorrow, there is consumer confidence number coming out at 10am eastern time. And then AMD reports after the market closes. On Wednesday, first of all, there's PMI data that comes out at 10am. And then the big event for the week is the FOMC announcement. So the announcement is at 2pm. That's during my session. And then the press conference begins at 2.30pm just as my session will end. And so that is the big event for the week. Then on Thursday, Apple reports earnings after the market closes. And then on Friday, the next big event for the week is the jobs report. That's at 8.30am eastern time. Also, there's more PMI data out at 10am eastern time. All right. So that is the week ahead. Big event on Wednesday again. FOMC announcement. All right. Let's take a look at the positional analysis today. I'm going to start with the S&P 500. This is the ES Futures and book map. Very choppy day, range day. Before I take a closer look at this chart, I want to take a look at a larger time frame. I'm going to go to the SPX in a 30-day one-hour chart. Let me point out just a couple of key events. This was the jobs report for September, October 6. Gamma squeeze after that. Then the, let's see, I think over that weekend, that was the, might have been the Hamas invasion of Israel. Anyway, the market did not make it up much higher. Interest rates increasing. The geopolitical situation and the market rolled over. This is the October expiration. Very negative Gamma put dominated. The expectation was for a put banner rally that really only lasted a couple of days. And now the market has moved lower again with the treasury yields being an issue as well as the geopolitical situation. All right. Let me point out some levels on this chart. First of all, the lower and upper weekly expected move. These are shown by the dash purple lines. This is based on the options marked the expected move for the week. So I do that once over the weekend and that those levels remain the same for the entire week. Then the dash blue lines are showing the lower and upper daily expected move that changes every day. And note that SPX is trading up toward the upper daily expected move for the week. Let's take a look at the spot gamma levels. These are proprietary spot gamma levels based on gamma weighted open interest that are provided to spot gamma subscribers on a variety of platforms. This is thinkorswim. So let me point out the key daily levels. First of all, here's the 4000 level. That is the absolute gamma strike. That's a strike with the largest absolute negative and positive gamma. That is where most of the gamma weighted open interest is concentrated. The next level up is the put wall. That's a 4100. That's a strike with the largest net negative gamma that can be expected to act as support. If it doesn't, of course, the next level down is 4000. And so far the 4100 level has done its job. And note that it did not shift lower from last week. It remains at 4100. The next level up is 4300. That's the volatility trigger. That is spot gamma's proprietary gamma 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 dealt exposure. And that tends to enhance or increase volatility and can lead to fairly unstable markets. And note that SPX is trading well below its volatility trigger. The next level up is the call wall at 4600. That's a strike with the largest net positive gamma that can be expected to act as resistance. And that's really far out of play today. And the call wall has been moving around quite a bit. Really the force driving the market today is the put domination in this negative gamma environment. So the call wall is not significant up at that level. So those are the key daily levels. And note the potential range is very wide. 4100 to 4600. All right, the only shift in level for SPX was the call wall shifting lower from an even more unimportant 4800 level to 4600. All right, so those are the key daily levels for SPX. Let's just take a look at a one day chart just to get a closer look at the levels that are in play for today. I'm going to zoom in just on today here. So here's the upper daily expected move. More or less acted as resistance before and now SPX is up at that level again. This is also a combo L5 level at 4150. Acted as resistance midday there. All right, let's take a look at book map now go back to ES futures. So in the ES futures, I have my own cloud notes so I can show SPX levels as well as spy levels. So there's that SPX 4150 level that I pointed out that it acted as resistance three times earlier today or four depending on how you look at it. And now after 1pm SPX or ES moved up pretty sharply up to this 4165 close to the 4165 level that's SPX that acted as resistance more or less maybe just a little bit below at that level also above the upper daily expected move for ES that's the ES upper daily expected move. And then here's the spy 415 level that's a large gamma two level combining no that's just spy gamma level at that 415 level. So I have SPX level spy levels as well as other key ES levels on this chart. Note there is a difference in price between ES and SPX. And today it is around it's somewhere between 19 and 20. I'm using 20. So ES minus SPX is 20 today. And I have been posting all the ratios that I use every day in the book map discord in the options dash Doug chat channel. In case anyone else wants to show these levels on their chart. So this is how I look at the ES in terms of spy and SPX levels both round number levels and also spot gamma levels for spy and SPX. Alright so levels in play no direct contact other than this 4150 level acting as resistance. Alright let's take a look at actually let me just wrap up with the shifts and levels for spy. So for spy the volatility trigger did shift higher from 425 to 429. Also the call was shifted lower pretty dramatically from 460 down to 414. So that is actually shown here this may be difficult to see but there are two white lines. So that spy 415 level lines up pretty closely with the SPX 4150 level. And that is very unusual to have that call down below the volatility trigger. For you spot gamma subscribers there was a discussion in the spot gamma AM founders note about that this morning. Again somewhat unusual and we're really focused more on puts and the location of the put wall and the put domination in this very negative gamma environment. And I would imagine that that should resolve this location of the call wall in the next few days certainly after the FOMC announcement. Alright so the SMB500 staging a late day rally call wall shifted lower for SPX and spy and then the spy volatility trigger shifted higher. Alright let's take a look at NASDAQ now choppy session and NASDAQ as well. This is the NQ futures and book map. Let's just take a quick look at first of all a QQQ chart so we can isolate the QQQ levels and play for today. No strong resistance or support. Note 350 is the absolute gamma strike and there's a combo level just below that that combines QQQ and NDX gamma weighted open interest into one level and shown in an equivalent QQQ price. So that's QQQ choppy day. Let's take a look at NDX and here's that combo level and NDX. Let's go back to book map. So in book map just like in NQ futures just like the ES futures I have my own cloud notes so I can show a combination of levels in one column. Here are my cloud notes. So there's the QQQ 350 level and note my NDX levels are not correct. The spot gamma is not updating the levels on the home page that I use every day. I need to send a screenshot to them to their spot gamma support. Alright so that is the QQQ 350 level and this is also the NQ upper daily expected move and there was a sharp move higher at the open. I'm sure everyone is aware and the NQ traded up above the upper daily expected move and then reversed pretty sharply lower. Alright so those are the levels in play for NASDAQ. As far as shifts in levels the only level that shifted was the put wall for QQQ shifted higher from 340 to 345. So I interpret that as somewhat bullish is the put wall shifted higher for QQQ. Also the put walls held for the SPX and SPY. Alright let's talk about gamma notional now. See how market makers were positioned on the gamma curve at the beginning of the day. What I'm going to take a look at is gamma notional here. Again this is how market makers are positioned on the gamma curve at the beginning of the day. And I'm looking at SPX, SPY, NDX, QQQ, RUT and IWM. The only number that really is not significant here is NDX. So we'll take a look at the other numbers. Note every all these numbers negative quite negative especially for SPY also SPX, QQQ, negative and IWM. So what this means for the SP500 NASDAQ and also 2000 traders are long puts. Market makers are short puts and they have to trade in the direction or price to hedge their delta exposure and that tends to lead to more volatility more unstable markets. Alright there were some shifts in these in the gamma notional levels. First of all for the SP500 and NASDAQ the level the gamma notional became slightly less negative than Friday and just the opposite for the Russell 2000 gamma notional became slightly more negative. Alright let's take a look at the VANA model now and we can get a graphical representation of what this means. Let me just check one thing here. So SPX low of the day was right around 4133. Let's go back to the VANA model for SPX. Alright what this chart is showing is delta notional. This is market makers delta exposure on the vertical axis price on the horizontal axis for SPX. There are two curves on this chart. The first the light gray curve shows how market makers delta notional changes with changes in price only. The purple curve adds implied volatility to the equation. That shows how market makers delta notional changes with changes in price and implied volatility. And that change in implied volatility change in delta with a change in implied volatility is the VANA effect. VANA is a second order Greek. So again that is the change in delta with a change in implied volatility. So that's the curve that we want to take a look at. Alright let's take a look at some prices now. So first of all the low of the day looking for 4133 somewhere between these two points. And this is a very unusual curve to have the entire curve sloping up from right to left. And this is typical of a negative gamma environment and they're depending on what what Jerome Powell has to say on Wednesday this there should be some some relief to this to this very negative gamma situation. Of course we'll see more on on Wednesday. Alright so what this showing is as price increases market makers delta notional decreases. So price is increasing delta notional is decreasing and they can buy back short futures. So remember in this part of the gamma curve market makers are trading with price to hedge their delta exposure. So if price increases implied volatility drops they can buy back their short hedges. Let's see where SPX is trading now 4167 and this is not following my cursor very well. Alright so you can see that market makers delta notional has been increasing decreasing as price increases and they can buy back short futures. Let's just take a look at VIX. So this is the VIX futures and it really started to decrease around 1115 somewhere between 1115 1130 made a lower high and then really started to move lower just around 1230 1245. Alright so we know now that price is increasing implied volatility dropping market makers are buy back short futures. Alright let's take a look at the VIX model for SPI. SPI low of the day right around 412 412.50 somewhere around here currently trading about three points higher. So not quite as dramatic as the SPX curve but market makers as price is increasing have been able to buy back short futures. Let's take a look at QQQ. Low of the day and QQQ around 346.50 somewhere around here and very similar. Now this does work both ways so if price continues to drop market makers delta notional will increase and they will have to sell futures to hedge their delta exposure and for QQQ this would be for options traders traders if they are buying puts market maker sell the puts and they have to sell in Q futures to hedge their delta exposure. Alright let's take a look at some setups now. So this chart is the hero chart for SAP 500 hero is hedging impact real-time options this is available to spot gamma subscribers. What this chart is showing is price for SPX that's the white line and then the hero signal that's the purple line again hedging impact real-time options showing options trades and market maker hedging activity for a combined signal for SPX SPI XSP and ES futures on to one combined signal. Alright so using this we can take a look at a couple setups. I'm going to zoom in on this chart. Let's go to the morning session. So the first setup and we'll go take a look at these in book map in a minute was this divergent short. Just after 950 options traders started taking negative delta positions as the SAP 500 moved up toward that upper daily expected move and then price responded a few minutes later. Alright so that's the first setup a short setup let's zoom back out and then really more chop since then for several hours and then options traders started taking positive delta positions again right around 1245 note this flow alert often a mean reverting alert that's the way Brent the founder spot gamma uses these quite often and he's the one who developed these so the floor alert indicating potential reversal point they can also confirm a trend and or you just have to watch watch hero and I watch book map to make a decision but anyway in this case it acted as more of a mean reversion reversal higher as options traders started taking positive delta positions and that was right around 1245 alright so let's go to look at book map we're looking at a short in the morning then along in the afternoon let's zoom in on this a bit alright so here's the morning short note all the aggressive buyers these are shown by the green volume dots the volume dots are showing market buy minus sell and when there are more buyers than sellers the volume dot is green when there are more sellers than buyers the market dot is magenta so note more aggressive sellers coming in so everybody's on one side of the boat here from the cash open you can see the rising cumulative volume delta that's the dark blue line also buy stop orders helping the mule fuel to move higher and then note that large traders were fading that move with iceberg orders that's shown by the falling light blue line not large size but they were selling and the strength they use iceberg orders to hide their size and then as options traders remember options traders started taking negative delta positions and price move lower so that's the short setup from this morning pretty typical pattern for the last few days and then finally the chop resolves higher right around 1245 again everybody on one side of the boat sellers shown by all the magenta volume dots then price starts to make higher lows as traders were taking positive delta positions and then the buy stop orders shown by the rising yellow line as well as aggressive buyers shown by the rising dark blue line move price higher as well as traders taking positive delta positions back up above the highs of the day so far all right let's go back and take a look and see what options traders are doing what i want to do now is uh kind of slice and dice this a bit first of all take a look puts and calls see what traders are doing so what this is showing is in the the morning traders were buying puts that's shown by the falling blue line blue is for puts shown in the direction of delta so falling blue line indicates negative delta traders are buying puts sorry about that that's what i'm afraid of and then let's take a quick look at this move this afternoon so they were buying puts they stopped start selling puts also start buying calls and price starts to move higher and spot gamma has pointed out when both of the lines are moving in the same direction that's a very powerful signal traders at this point are buying calls and selling puts market makers taking the opposite side so they have to buy futures to actually their delta exposure also their uh delta exposure due to the put vana is decreasing so they are also buy back short futures due to the increase in price and the decrease in uh implied decrease and implied volatility so the put vana rally combined with what traders are doing helping to fuel this move higher as well as aggressive buyers that we saw in in book map and let's just take a look at next expiry which would for the s&p 500 this would be the zero dte options that expire today and that is not that's making up uh less than half of the total notional value today that's shown by the green line and i'm looking at the notional value here so really traders are taking options positions that expire further out than today that's shown by all trades by the purple line so that just adds a little bit of additional context all right so short setup in the morning then long setup in the afternoon took some patience all right let's take a look at nasdaq now already a nasdaq there was a clear divergent short this morning pretty much from the open traders were taking negative delta positions as price was increasing and then price responded lower as traders were taking negative delta positions and just like the s&p 500 they were buying puts shown by the following blue line all right let's go take a look at book map go to nasdaq so here's the reversal lower and nasdaq assume it on this so it was a little bit more clear to see when i was zoomed out more but note everybody on one side of the boat aggressive buyers from the open remember options traders were taking negative delta positions they were fading the move higher also large traders also fading the move higher with iceberg orders shown by the falling light blue line on the other hand aggressive buyers in there that's shown by the green volume dots as well as the rising cvd line the dark blue and then also buy stop orders shown by the rising yellow line also fueling that move higher it runs out of steam as traders were taking negative delta positions and aggressive sellers start to come in and nasdaq makes a series of lower highs finally reversing just below the upper daily expected move again remember traders were taking negative delta positions in nasdaq and just to note when i'm trading i'm looking at i have multiple screens so i my main computer i have two screens so i'm looking at either es or in q or whatever i'm trading book map on one screen and hero on another screen so you know of course i'm only presenting on one screen so i have to jump back and forth but in when i'm trading i'm actually looking at one screen or two screens at the same time all right so this is the afternoon setup right around the same time as s&p 500 and at first didn't it kind of look like the same chop but then finally a lot of aggressive buyers start to come in just after just around around 115 or so so let's see what options traders were doing so there were several ups and downs in the hero signal and this one finally takes hold around 1245 traders start taking positive delta positions let's just see what they were doing with puts and calls so they started buying calls and really somewhat took their foot off the gas from they were buying puts and then that activity and then that activity leveled off they started buying calls not quite as clear as the signal in the s&p 500 let's just take a look at one other thing there's a new signal for the magnificent seven and these are the seven stocks that have been driving in the markets both the s&p 500 and nasdaq for most of this year it's a combined signal for apple amazon google meta microsoft nvidia and tesla sometimes it acts as a leading indicator this is fairly new something that spot gamma just introduced so it took a while the options traders in the magnificent seven really didn't start taking positive delta positions until price was already increasing so not not much of a leading indicator today for this last move higher but still an important signal indicating that right around 120 let's say traders start taking positive delta positions in those seven stocks all right any questions all right let's take a look at some stocks now and i did post this in discord i called a tale of two stocks microsoft and tesla and wavy ask how much is spot gamma cost i just go to the spot gamma website and there i the last time i checked there were three levels of subscription and if you this hero signal is included with spot gamma alpha so the last time i checked they have a uh they had a standard pro and alpha subscription and i'm not sure what the prices are so you'll have to go to spot gamma dot com and uh you should see the pricing there all right let's take a look at a couple stocks so again i mentioned microsoft and tesla tale of two stocks first of all here's microsoft gonna separate out puts and calls so the rising line is showing that traders were buying calls aggressively in the morning buying calls driving price higher when traders buy calls in a stock market makers sell the calls and they have to buy stock to hedge their delta exposure sorry about that try again so also they were really not doing much with puts in the morning blue line pretty flat aggressively buying calls that levels off price starts to drop they start buying calls again they are also selling puts takes a while for the price to respond but net for the day both lines are positive so they net for the day they are selling puts and buying calls so bullish options trades in and microsoft today so that's the first setup let's go take a look at book map no gamma levels no spot gamma levels in place so let's again let's go but book map take a look at microsoft very bullish morning in microsoft sharp jump higher from right around the 333 level all the way to 338 note the liquidity in the order book shown by the dark or dichro collars orange to red that comes in at the cash open typically at the round number levels and price quickly made it up to the 338 level and reverse lower as call buyers started to take their foot off the gas and wavy says i see thank you you're welcome hero could be very useful to me as an options trader yes i think no matter what you trade any you know whether you're trading equities or equity index futures i think hero is a great help gives you a pretty significant a significant edge all right so that's microsoft very strong opening trade as traders are buying calls all right let's take a look at the other stock that's tesla and they're just hammering tesla today all right let's go take a look at hero down from 210 to 195 let's go to hero see what options traders have been doing so we know again that traders are buying calls and microsoft helping to drive price higher take a look at tesla now let's see what tesla options traders have been doing and they were buying puts so just about 10 minutes after the open initially they were buying calls and selling puts that stopped just 10 minutes after the cash open started aggressively buying puts stopped buying calls and price moved lower so just the opposite of microsoft when traders buy puts market makers sell the puts and they have to sell stock to hedge their dealt exposure and tesla moved lower than its 200 foot wall key gamma strike let's go take a look at book map so here's the 200 key gamma strike put wall there was some consolidation at this level and price finally continued lower we just toned down these volume dots just a little bit so 200 the put wall the key gamma strike a little bit of consolidation there then that level became resistance that's what happened with spx last week break below the put wall and then it becomes resistance all right so there's tesla let's go back to hero so actually net for the day traders are buying calls the orange notion of value that is positive but the put buyers are definitely in control and they're more aggressive all right one other stock i wanted to take a look at so that was really the the most interesting amazon and what i saw in the morning was this divergent short but that hero started moving lower price responded and looking out at the big picture the setup today for amazon was really a long let's go take a look at book map so a better setup today is the long and amazon here's the short that i was talking about that divergent short at 132 you can see the aggressive seller starting to come in shown by the magenta volume dots and absorption at that level again the liquidity that comes in at the cash open those are limit sell orders all right does anyone have any stocks they want me take a look at other otherwise we'll go back to the go back to the sb 500 looks like it may be finding resistance at the 4165 level that level was noted as resistance in the spot gammam founders note let's just zoom in a bit note the heat map and book map showing all these sellers these are again limit sell orders above price also iceberg orders large sellers selling with iceberg orders that show them by the falling light blue line and the sub chart as well as that icon right there 560 contracts and three execute executed in and three transactions as um as buy stop orders fuel that move higher up into that liquidity so a little bit of a stop run up into that liquidity and then large traders start to come in with uh iceberg orders uh to sell that move higher let's see what options traders are doing go back to hero go the sb 500 zoom in on this so as prices reach that high level again options traders are starting to fade it um options traders uh can often have a uh mean reverting uh influence on price and that's what's happening today options traders are um buying weakness selling strength often that happens at key levels again there's a flow alert indicating potential uh mean reversion activity the flow alert basically just signifies significant options activity and hedging activity but the research that spot gamma has done indicates these can also often be signal of a potential reversal so that's the way the alerts have acted today on the sp 500 let's just separate outputs and calls again remember we noted earlier uh with this reversal hire traders started selling puts and buying calls and now note that has reversed so now they're selling calls and buying puts both lines moving in the same direction lower sorry about that nothing i did all right shane wants to take a look at tlt so i don't have tlt in book map but we can take a look in hero here so that's an etf that tracks the uh 20 year treasury i don't know what happened could be faster tracks the uh 20 year treasury 20 plus year all right so starting about 10 am traders are taking negative delta positions as tlt started moving lower so tlt is um may have been a moderate options market certainly nothing on the uh order of magnitude of the sp 500 or even nasdaq so the notional value for the sp 500 for example is in the billions typically could be anywhere up to uh six or seven billion on the high side and here this is tlt options traders notional options trades uh notional value negative for the day at minus uh 29 million so options traders are taking negative delta positions in tlt although that activity did stop right around 10 50 or so so now it has shifted to slightly positive looks like tlt is moving higher so yields would be moving lower all right so there you go shane so right now traders are taking positive delta positions in tlt let's go back to the sp 500 all right so it may be shifting higher again options traders may be um starting to take positive delta positions again let's take a look at nasdaq though they were definitely taking negative delta positions uh starting just before two o'clock take a look at the magnificent seven you need to pin that all right so the magnificent seven that has um the hero signal has not uh dropped as dramatically as nasdaq separate outputs and calls so for a while they're starting uh right around one right around one o'clock they were buying calls and a few minutes later 20 minutes later started selling puts now those lines have leveled off all right let's go back to book map all right let's go back to book map so right now the sv 500 just consolidating between the spy 415 level and the sp x 4185 take a look at nasdaq right nasdaq just below the q q q 349 level large traders continue to sell into strength with iceberg orders not large size so one thing to note is um tomorrow and probably wednesday morning that uh you know probably best to expect price action like this and then some resolution uh up or down out of this range after the fomc announcement so that is probably what uh whatever you want is waiting on is the fomc announcement and press conference so really expect uh more of the range uh until then uh more of this type of price action unless something else comes up unless there's a significant move in treasuries and yields or in the geopolitical situation got a couple minutes left anyone has it does anyone have any stocks they want me to take a look at last call for stocks questions all right so we looked at good short and long setups and both the sv 500 and nasdaq confirmed by options traders with hero as well as order flow and book map again that was both the sv 500 and the nasdaq and calib wants to take a look at netflix i've got netflix now and book map we can take a look at that netflix bullish day let's see what options traders are doing let's go to netflix very bullish day in netflix 400 key gamma strike acting as support this morning sorry i should have shown this one earlier this is a good setup and calib says the 400 level seems key yes it was that is the key gamma strike so a good choice of words there key gamma strike note the flow alerts a couple of flow alerts right at the open and traders have been buying calls and selling puts in netflix today all right let's go back take a look at book map again very bullish day in netflix thanks for pointing that out calib there's the 400 level acted as support this morning 400 key gamma strike and traders have been taking positive delta positions buying calls and selling puts all right i need to wrap it up i want to thank everyone for watching thank you very much for your questions and comments and remember tomorrow consumer confidence at 10 amd reports after the close and we'll see you tomorrow thanks again bye