 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, 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 involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. And hold on just a second. It looks like my YouTube stream is a little blurry. I don't know if there's anything that I can do about that. Okay, that's better. Okay, so as a reminder, the focus of my presentation and the Options with Doug chatroom and Discord is options, order flow, the impact of options markets on stocks and futures and the influence of market maker hedging flow on price action. I have a two step process for trading. The first is planning and that's based on positional analysis and I look at how traders and market makers are positioned in the options market and how those positions change from day to day to help develop a thesis regarding expected volatility and trading range for the day as well as a directional bias. And the second step of my process is execution and I look at real time order flow and Bookmap and real time market maker hedging flow and Spot Gamma Hero. And I think this approach provides a significant edge. Other traders use technical analysis or fundamental analysis and again I think this combination of positional analysis as well as looking at real time order flow and Bookmap and real time market maker hedging flow and Spot Gamma Hero provides a significant edge. And questions and comments are welcome and I will be watching both the Bookmap, Discord chat as well as the chat on YouTube. Okay, let's get started. So what I want to talk about today and I've got quite a bit is first of all, news. I'll go over economic data, events and earnings for the next week, week or two. And then I want to do a review of Friday. Remember I talked about the Put Vana rally and how that helped contribute to the rally on Friday and also how you could have anticipated the rally in your planning process. And then we'll go over our positional analysis for today and then we'll talk about some setups and there were some great setups today. Okay, first news, economic data and nothing major coming out this week except maybe the PCE on Friday. But anyway, let's see what we have. So first of all, tomorrow, that is Tuesday the 24th, there is some PMI data coming out at 9.45. And next on Thursday, durable goods and GDP and that's at 8.30 a.m. Eastern time. And then finally on Friday there are a couple of items, PCE and apparently this is what the FOMC looks at and recall the following week on January 31st and February 1st is the next or the first FOMC meeting of the year and the announcement and press conferences on Wednesday, February 1st. So this is the PCE and then the Michigan Consumer Sentiment at 8.30 and 10 a.m. So that's the economic data coming up and again I mentioned the big event, the FOMC meeting next week on Tuesday and the announcement and press conference on Wednesday. And then there are a couple of earnings announcements this week for stocks that are in my watch list and Microsoft announces earnings on Tuesday tomorrow after the market close and then Tesla on Wednesday again after the market close. Okay, so that's the news coming up, events to watch out for. The items that I mentioned could be market movers, the economic data this week and certainly the FOMC meeting next week and that will also impact how traders are positioning themselves into that event. All right, let's do a review. I want to do a review of Friday. Give me just a moment. I've got a number of screenshots that I want to go through and I'm going to start. So again, this is a review of Friday. This is options expiration last Friday and things to point out here. First gamma notional for SPX and this left column here and spy on the right. And this number minus 2, 2187, I consider that a full tank of put fuel. So there's the potential on around big events or options expiration for changes in implied volatility and also a lot of these put options were going to expire. So what this means is that traders were long puts, very long puts, market makers are short puts and they are short futures to hedge their delta exposure. And as price increases, that's what happened on Friday, market and so price increases implied volatility drops and market makers can buy back their short hedges. So I'm setting the scene. This is Friday morning during our planning process and we see this and look at the thing that comes to my mind when I see this minus 2,187 is rally potential. And this is just reinforcing that idea of a negative gamma scenario. This is the VANA model for SPX and this is showing that traders, again, traders being long puts, market makers are short puts and a price decreases so they have to sell futures to hedge their delta exposure and as price increases they can buy back those short futures. And here's the spy chart. Spy VANA model. Again, just a steeper line indicating that in the case of Friday market makers again are short futures to hedge their delta exposure and as price increases they can buy back those short futures. And again, remember, we're in the planning process now still looking at the information that I look at every day and talk about every day. And the next is noting, again, this is options expiration Friday noting the amount of gamma that expires that day on the 20th, January 20th. And that is getting up to a somewhat significant number so those puts are going to be gone at the end of the day and actually this is SPX so that includes the AM settlement which happens at the RTH open as well as the PM settlement. So this is from Spot Gamma Equity Hub looking at the five-day history and this is for spy and note here is your number the amount of gamma expiring on that Friday 37.75%. So again, those puts are going to expire on Friday and they're... if price increases they're going to lose value very quickly and market makers delta exposure will decrease. And here's the gamma model this is for SPX and the green line is the current expiration and the black line is the next expiration and this is just reinforcing that idea of the gamma expiring at the end of the day. Look at the same gamma model for spy and again reinforcing that idea of that gamma expiring and one other chart I want to take a look at actually a couple of other charts so this is showing the put dominance slight put dominance for SPX then notice the blue line the put gamma is larger or more negative than the call gamma and even more so for spy more put dominance for spy and that just goes along with the steeper van a curve and the greater amount of negative or the more negative gamma notional and then finally one last thing to look at and all this information is from spot gamma and this is the delta notional by expiration for SPX spy QQQ and NDX and this is again by expiration so what we're noting here is the that's the January the 20th January monthly expiration and again notice the dominance of put so below the zero line that's negative gamma or delta in this case and that's put delta, negative delta so that all expires are expired on Friday and one last thing to take a look at so this is all in the planning process on Friday setting the stage so we see that large negative gamma notional and again the first thing that comes to my mind is rally potential if the market gets going that's a full tank of fuel and could lead to a rally as again puts expire implied volatility drops price increases market makers delta exposure decreases and they can buy back their short hedges and then one last thing and this is the an SPX chart from Friday this is Friday and think about again just doing your planning process in the morning and think to note this is the 3,900 level this may be a little bit difficult to see but this top line is the 3,900 put wall and that level can be expected to act as support so we know that that level is in play and here right after the open SPX moves down test that level then goes down to this combo L1 level and reverses higher and then as you can see rallies for the rest of the day so that is the SPX think or swim chart with the spot gamma levels here and this is VIX so this is kind of a proxy for implied volatility so this is showing that as SPX was increasing implied volatility is dropping so that is what we were looking for again with all that negative gamma notional implied volatility dropping market makers are buying back their short hedges and then finally here is book map and this is showing the reversal now these levels actually they are correct this put wall level is not quite correct it should be down about 3 points lower where I have this note SUP for support so again ES, SPX test that 3,900 level and rallies and once it gets going this yellow line is showing stop orders showing as price rises these buy stops, buy stop orders are contributing to price levels off and then as price is ES, SPX start moving higher again more stops fire off and I have both the sub chart and the on chart stop indicator and here we can see some of the large stop orders that green dot, small green dot 2,484 1435 894 so as price gets going up towards approaching the SPX 4,000 level a lot of stops start firing and also notice green dots there, aggressive buyers market buy orders and that is confirmed by the CVD line that is the dark blue line this dark blue line here so a lot of contributing factors to the rally on Friday but the the one that you could anticipate and plan for was the Vanna rally based on that large negative gamma especially for spy and then all of the gamma expiring on Friday okay any questions about that and there is a question in YouTube what is the significance of zero gamma and according to spot gamma not necessarily that much spot gamma looks at a different level the volatility trigger and that is their gamma flip level and this gamma flip level or volatility level is the volatility trigger level is their level at which gamma flips from negative below or market maker gamma switches from negative below to positive above so zero gamma would actually be a level of zero gamma but I think spot gamma at least and what I follow places more importance on the volatility trigger okay I hope that was helpful and now let's go through our positional analysis for today and again the thing to emphasize is using this process I would have anticipated the rally okay so let's go through our positional analysis for today and what I want to do is start with levels on the charts I'm going to go to first of all look at a couple of think of swim charts so this is SPX for today this is a 20 day one hour chart and this is showing the rally that started on Friday at the 3,900 level has now today shot straight past the 4,000 level and it appears to be prices heading up to the 40-50 level SPX 40-50 level which is the new call wall so these are showing the levels in play and a couple things to note and I'll talk about this more but the call wall has shifted higher to 40-50 and actually the put wall shifted lower to 3,800 now so here's the put wall down here and the call wall above and the put wall is to strike with the largest net negative gamma and that can be anticipated to act as support and the call wall you can anticipate that to act as resistance so that's the big picture the 20 day one hour chart again showing the second test of the 3,900 level and then the strong rally starting Friday and now moving up to the 40-50 level and let's just take a look at a closer end view and this is a two day one minute chart of SPX again showing the spot gamma levels and this is the rally continuing from Friday morning again the 4,000 level here provided very little resistance and prices now moving up to the 40-50 level alright let's take a look at book map now this is ES, this is the S&P 500 futures and this is pointing out the reversal higher at this around the zero gamma level and the support level and these levels are a little bit higher than they should be spot gamma is still using a 20-point difference between ES and SPX so what we're looking at here what I'm showing I have two columns of levels the first is spot gamma cloud nodes and this is showing SPX levels they're important as well as combo levels which are SPX and SPI combined and converted to an SPX level and then converted to an equivalent ES number by adding 20 points and right now I have that difference at about 17 points so that's one reason why I'm looking at the SPX charts and think or swim to see the exact levels so anyway the reversal higher this morning at the support level or close to it and then the rally up again the 4,000 level often and price is now above the ES 40, 50 level alright let's talk about shifts in levels now one other thing that I'm looking at is this is my own own column of cloud nodes and I'm marking the supportive resistance levels that are noted in the spot gamma AM founders note as well as big round numbers in ES and then also SPI levels the main key gamma levels in SPI and those levels are correct I calculate that ratio of SPI to ES just about every day okay shifts in levels there were quite a few shifts in levels mostly higher so first of all the SPX volatility trigger increased from 3915 to 3945 and again that is spot gamma proprietary gamma flip level and interestingly I mentioned the SPX put wall dropped from 3900 to 3800 and we'll look at the S&P 500 charts in just a moment and then the SPI put wall actually increased from 385 to 390 and then call walls increased across the board SPX, SPI, NDX and QQQ call walls all increased higher traders are looking for a higher end of the trading range and accepting higher prices and then the key gamma strikes for SPI, NDX and QQQ increased as well while the key gamma strike or the absolute gamma strike for SPX remains at 4,000 and the key gamma strike or the absolute gamma strike is the strike with the largest total gamma total absolute gamma let's take a look at the S&P 500 charts now and we'll see where those gamma levels are so here is SPX there's the put wall down at 3800 and then the key gamma strike or the absolute gamma strike that's obvious strike with the total highest absolute gamma also note the significance of the 3900 level and then here is the 4050 level, that's the call wall so that is SPX, those are the absolute gamma levels here's SPI there's the put wall and now the key gamma strike is at 395 and 400 is a significant level that is a large gamma 1, LG 1 and then the call wall is up at 410 so again the there are quite a few shifts higher in levels call walls across the board and key gamma strike or absolute gamma strike for SPI, NDX and QQQ alright let's take a look at some data now and just to point out, gamma notional so this is market makers position on the gamma curve has shifted to positive for SPX so on Friday, SPX in the morning, Friday morning was minus 558 and now it's 117 so it has shifted positive to a fairly neutral stance and then SPI recall was minus 2187 on Friday morning and now it's still negative so market makers gamma position and SPI is still negative not nearly as negative as it was on Friday and let's take a look at van emals and so this is just showing the neutral neutral position in SPX indicating that market makers their delta notional is not going to change a whole lot as price moves up and down and they're not going to have that in this position at least to the beginning of the day and they're assuming a delta neutral position they're not going to have much delta exposure to a hedge as price moves up or down now that could certainly be changing today with this large price increase but that was the situation before the open this morning and SPI, again still in a negative gamma the market makers position on the gamma curve is still negative gamma indicating that market makers will need to sell futures as price decreases and buy back those futures as price increases and one thing that I want to point out this is just one one quote from the AM founders note this morning indicating that implied volatility remains near the low end of its remains near the low end of its fair value so this is talking about VIX or implied volatility and that may reduce VANA as a key driver of upside movement particularly over 4,000 so there were some questions over the weekend about continued VANA rally there is a partial answer we'll take a look and see what's going on today but that is I think that's a pretty good assessment that VIX may not drop a lot lower so there may not be that much VANA fuel left in the tank so we'll see what VIX is doing so let's take a look at VIX and so there was a drop this morning and this is VIX for today so drop this morning down to around 1960 19.6, 19.55 and then is now moving higher so remember I'm looking at all of this to develop a thesis for the day I talked about the shifts higher in levels for the main indices the S&P 500 and the NASDAQ and this is a spreadsheet that I keep every day these are the stocks in my watchlist and I track the key gamma strike for the previous day and the current day and I update this every morning and I color code the key gamma strike level based on whether it increased or decreased from the previous day and note all the green here so this is indicating that all these numbers highlighted in green increase from the previous day so this is bullish I was looking for first of all given the decrease in gamma notional or more positive I was looking for a lower volatility than Friday but definitely bullish that was my directional bias based on the increase in all the levels again the S&P 500, NASDAQ and stocks and I posted my watchlist the spike gamma hero watchlist in discord ranked from strongest weakest signal indicating that today I was bullish and looking for long entries okay let's take a look at some setups so the first one that I want to start with let's go to book map and Tesla was at the top of this list this morning this hero watchlist it was a great long setup multiple pullback entries and prices heading for the multiple liquidity targets also first high liquidity target at 140 144 and 145 and let's take a look at hero and see what options traders were doing one day puts and calls so traders are buying calls and selling puts and Tesla and it looks like just recently they started selling calls and stopped stop selling puts so what I'm looking at is the rising orange line that's indicating that traders are buying calls and the rising blue line indicating that traders are selling puts and just noticing that it has leveled off a little bit let's just change the look back period now to 30 minutes and that will give us a little bit more clarity about what's going on now so it looks like traders are maybe taking profits on their calls so this is just changing this rolling window or look back period to a shorter time frame so we don't have all of that accumulated data from the entire day to look at so there's the first setup that I want to look at Tesla now let's take a look at the S&P 500 and I'm going to look at ES, SPX and SPY so ES this this is the S&P 500 features and it's combining the SPX and SPY hero signals into one signal I'm going to zoom into the morning there was a bullish confirmation this morning so note the positive delta trades and then as price moves up towards SPX 4000 and SPY 400 traders start taking negative delta positions so we can see what and this is pretty pretty typical behavior for the S&P 500 and sometimes this leads to reversal and sometimes not so it looks like traders started buying puts which makes a lot of sense given the low volatility traders buying puts so there's the S&P 500 the ES and now let's go back and we'll leave it on this and see what they're doing during the day so they continue to buy puts and again this is looking at the SPX and SPY signals so let's take a look at SPY now and it looks pretty much the same and I'm looking at questions on YouTube do I wait for the first 15 to 30 minutes to get in my trade I look for a couple things first is if I see a key gamma level and anticipate a reversal there so I see hero, let's say today I see hero rising price drops down to a key gamma level then I would look for an entry as close as possible to that and look to buy a call and then if I miss that entry then I would look for a pullback to enter a trade and RTS not sure how to time the trade in context of what hero and bookmapper indicating and yeah that can be a problem especially when you're looking at this in real time of course right now I'm looking at this in hindsight but if you're real time looking at real time that's the reason that I'm starting to favor just buying options more and more you don't have to be that precise with your entry if you see again my thesis for today was bullish and if you see price at a key gamma level liquidity gamma level targets above then just buy a call that's the approach that I'm starting to take if you're looking at hero in real time to confirm a trend higher then it can be a little bit difficult but if you see a divergence and I've talked about plenty of divergence entries and anticipate that reversal at a key gamma level that gives you time to prepare for that trade okay so there were some confirmation of the morning for the S&P 500 then not so much for the afternoon so let's go on so we looked at one great trade in Tesla and the next one is Netflix and notice now the the signal the hero signal showing that comparing the strength of the hero signal for the last five days and last 30 days is weak for SPX and spy and it remains strong for Netflix the next one that I want to look at as well as Tesla the one that we just looked at so if you're using hero as a signal it's often much easier to interpret the signal for single stocks than the S&P 500 so now let's take a look at Netflix super strong today traders were buying calls all day and that's driving price higher let's look at book map so there's Tesla continues to move higher let's take a look at Netflix very strong rally a little bit of a pause here at the 350 call wall and price continues to move higher from liquidity level to the liquidity level it looks like the next target above if Netflix keeps going is the 365 level let's just go back to hero and see what traders are doing and you can always what I like to do is change the rolling window period the look back period the afternoon to get more clarity so in this case with this big drop traders were selling calls looks like it has not recovered that much so let's take a look at the total signal and if I were looking for another long entry I certainly would not I would not be looking for a long now I'd want to see that hero line rising before taking another long entry so it looks like the best move may have been this morning alright the next one QQQ let me just take a quick look at something now compare so right now QQQ is up 2.4% and spy is up 1.4% so that's what I thought technology continues to be strong very strong, easy to read correlation much easier than the S&P 500 traders are buying calls in QQQ very clear driver of price higher shown by the rising orange line let's go take a look at book map nice strong yet uptrend in the morning consolidation around launch time and some liquidity targets above so plenty of pullback entries as traders buy calls market makers are selling the calls and they have to buy QQQ or in QQ futures to hedge their delta exposure so this is going to be the theme for the next few stocks is traders buying calls again we saw that in Netflix continues in QQQ and as a stock trader if you're looking for a long entry this is something that you want to look for it's a powerful driver of price action and the next one is AMD strong rally in the morning then consolidating after price hits the 75 call wall let's take a look at hero and there you go traders buying calls market makers are selling the calls and buying stock to hedge their delta exposure alright the next one Moderna looks like calls are definitely driving price action at least up until about noon let's take a look at book map now it looks like price has resumed its uptrend heading toward the 200 key gamma strike and note all the liquidity at that level also note the reversal at this liquidity here around around 195-50 195-94 40-50 something around that level so note the absorption at that level price resumes uptrend heading up towards the 200 key gamma strike let's go back and take a look at hero again see if we can gain any insight by changing the rolling window yeah that helps a little bit showing that right now it looks like options trades have leveled off price continues to rise that may limit the ability for Moderna to get up to the 200 level alright the next was Nvidia and again note the strong hero signal here trade is buying calls for most of the day and it looks like they have started selling puts as well alright let's go take a look at book map Nvidia strong move up to the 190 liquidity level a lot of consolidation at that level and then prices continue to higher so price reversed higher actually at the 180 call wall and never looked back so again traders buying calls driving price higher let's go take a look at hero there couple of other stocks that I wanted to take a look at next one was Disney there's some I guess overall pretty strong correlation I'm not going to look at book map that's on my other computer and I'm about out of time so at least in the morning I saw that traders were buying buying calls in Disney really as good a setup as Tesla and Nvidia and AMD QQQ there it is and the last one that I want to take a look at is IWM and I've just started following this index but traders were buying calls today in IWM so just like QQQ buying calls in IWM driving price higher let's go take a look at book map so strong rally up until about 2 o'clock looks like price has met resistance at the 188 level let's just go back and take a look at hero again changed that look back period so a little choppy there heroes making a lower high as price increases then price starts to drop okay so we've already looked at the good setups or the best setups Tesla, Netflix, QQQ AMD, Moderna, Nvidia and then analyzed the price action in the S&P 500 on Friday talked about the bullish position analysis today for the S&P 500 as well as stocks a lot of the stocks in my watch list and that is all that I have for today are there any questions any questions, comments okay I'm going to wrap it up I want to thank everyone for watching thanks for your questions and comments and I will see you tomorrow thanks again, bye