 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 start, 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. As a reminder, the focus of my presentation and the focus of the options-doug chat channel in Discord is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading, and the first is planning, and I use 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 develop a thesis regarding the expected trading range and volatility 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 in Bookmap and real-time market maker hedging flow in SpotGammaHero to confirm my thesis and for setups, for entries and exits. And good morning, Rob, and thanks for your confirmation of the audio and video. Okay, and this second step in the process has become increasingly important today, given all of the focus and the trading and the zero DDE options. The levels are not shifting that much, and it's hard to develop a longer-term thesis, so it's a key to watch the order flow and market maker hedging flow during the day for setups. And on-topic questions and comments are welcome, and please, please, please note this. On-topic, and I covered the topics before, options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. And this applies 24 hours a day, not only during my presentation, but all the time. So please respect this, and let's move on. So again, on-topic questions and comments are very welcome. I'm looking for your interaction, your questions. Okay, let's get started. And today I want to cover, talk about news briefly, events for the day. We'll go through our positional analysis, and then we'll talk about some setups. So first of all, news, there was some economic data that came out this morning. A couple of PMI numbers, one at 9.45, the other at 10 a.m. Eastern time, and both were less, a little bit lower than forecast, and both less than 50. So that still indicates the economy, at least according to these numbers, is still in contraction. And then Tesla is also having investor day today. I believe that starts sometime this afternoon, maybe soon. And then finally, I have not had much time to look at it, but Spot Gamma introduced a new interface today, and it looks great. This is a new interface for Hero and Equity Hub, combined into one screen. And they put in a huge effort to get this out on March 1st, and it looks great. Kudos to Spot Gamma for getting this done, and again it looks great. Okay, and then JEC says the Tesla investor day starts at 4 p.m. Eastern time. So after the close, the investor day starts. And just a reminder, the employment report that normally comes out on the first Friday of the month is delayed this week for some reason, I guess maybe because of the short month of February. Anyway, it's not going to be this Friday, it's going to be next Friday, March 10th, is the employment report. All right, let's take a look at charts. And let's start with the S&P 500. And this is book map. And before I dig into this chart, let's take a look at longer time frame charts. And we'll just look at SPX. And this is a 20-day one-hour chart. And this is showing, again, this is just SPX, price, and Spot Gamma levels. And these levels are provided to Spot Gamma subscribers. This is Thinkorswim, and they provide a script every day with the updated levels. There is some manual work involved in pasting in the new script, but it just takes a minute or two. And so this is showing the range that, with the key takeaway that I see here, the ranges that SPX is trading in is shifting down. So this is the range from starting, let's see that is, this is starting around the middle of February, February 14th or so. And then the range has been shifting down. And now SPX is trading in the 3950 to 4000 range. And again, this is SPX. And this is also showing the key levels on the charts. And here is the put wall. And I'll talk more about what these levels are. These are the key levels. Put wall. And then here, 4000, that is the key gamma strike or the absolute gamma strike. And that 3995 is the volatility trigger. And then way up here at 4200, that's the call wall. And that has been up at 4200 for quite a while. And also the 4000 level has been the key gamma strike for quite a while. And again, note the range for today and actually the last few days, starting at the end of last week, has been the 3950 to 4000 level. And the question is, will this level hold, will 3950 hold and price move higher or will it continue down to the next range 3900 to 3950? All right, so that is a little bit longer time frame. And now let's take a look at another thinkorswim chart. And this is just for today. And again, I'm just showing this simple chart to get started showing just price and levels. And there's a question in YouTube, what time period is the SPX chart? So the one that we just looked at was a 20 day one hour chart. And now this is a one day one minute chart. And again, showing the levels that are in play for today and the price action really kind of centered just between 3950 and this support level at 3957. This level was noted as support in the Spot Gamma AM Founders Note. Okay, so that's today in another tight trading range today. Another range day. And the idea is to establish highs and lows and then fade the highs, fade the lows. Okay, so that's the playing field, the levels in play. Again, the 3950 level here, the 3950 support level which was in play early this morning and then the 3950 and the 3949 combo level also in play. All right, now let's go to book map. So this is the S&P 500 and I'm showing, I have two columns of levels here. And the first, these are Spot Gamma Cloud Notes. These are provided to Spot Gamma subscribers just like the Think or Swim chart note, Think Script except these are updated automatically and I don't have to do anything. Right now, Spot Gamma is using a seven point difference between ES and SPX and that difference I calculated in JEC posted this as well is I calculated this morning at four and a half points. So I'm showing in my cloud notes here the levels that I have adjusted at four and a half points. So that is that 3957 level that was in play at the open and then here's my 3950 level, again the SPX 3950 although Spot Gamma is showing that level there and they're just, you know, it's easier for me to calculate the exact difference. So those are the levels that are in play and then I'm also showing spy levels and that is the spy volatility trigger and that has been in play today and then finally I'm showing the ES big round numbers the fifties and the zeros. So a lot of levels in play and spy SPX and ES levels are all in play today so it takes a little bit of work to get these on the charts the correct levels and I calculate the spy ES ratio every couple of days and that changes from day to day just a little bit and then also the difference between ES and SPX and then on my spy charts I calculate the SPX spy ratio as well. So those are the levels in play today and you can see this is a trading range today and the plays have been to fade the highs and fade the lows. And we'll see that hero, that spot gamma hero is the hedging impact of real-time options did provide some good signals for both long and short as well as confirmation and order flow. So you can often see for example here this move down all the pink dots and then the shift to what I'm talking about is this this first big drop down notice all the pink dots those are market sell orders and then aggressive buyers start to come in as price hits that SPX 3950 and ES 3950 level notice the shift to the green dots and the move higher and then the shift to pink dots shift to green dots and now it's somewhat mixed here. Alright so that's ES and P500 and the levels that are in play and let's talk about shifts and levels. So first of all the SPX and spy volatility trigger both dropped SPX from 4000 yesterday to 3995 today so a minor shift down and then spy volatility trigger dropped from 400 yesterday to 396 today and the volatility trigger is spot gamma's proprietary gamma flip level and what that means is that market makers position on the gamma curve is negative below that level that means in that negative gamma environment market traders are long puts market makers are short puts and they have to sell futures to hedge their delta exposure as price drops and they can buy back their short futures as price increases so they are trading in the direction of price in a negative gamma environment and that tends to increase volatility and above the volatility trigger market makers position is positive gamma and in that case they're trading against price and that tends to subdue volatility in a positive gamma environment and right now all of the indices are definitely in a negative gamma environment. Okay so that is the volatility trigger so the QQQ volatility trigger dropped from 296 to 293 and then the zero gamma level dropped across the board SPX, SPY, NDX and QQQ and then finally this is kind of an odd one the SPY call wall dropped from 420 yesterday to 399 today so that is kind of odd to see one of these primary gamma strikes like the call wall at an uneven number not an even number, 399 okay so that's the shifts in levels now let's take a look at the gamma charts and see where these levels come from so these are the absolute gamma levels this is the zero line above this line that is positive gamma or call gamma shown by the black bars and below the line that is negative gamma or put gamma shown by the teal bars so this is SPX and this is the 4000 level that's the key gamma strike that is the very obvious is the largest strike on the board and it certainly should remain that way this is the March 17th the quarterly expiration so that is the key gamma strike the absolute gamma strike the strike with the largest total absolute gamma and then the put wall is down at 3900 and for SPX the call wall remains at 4200 so that's SPX really the notable thing here is the put gamma below the 4000 level that's SPX let's take a look at SPI I'm going to zoom in on this just a bit actually let's include that 420 level so this is the 400 key gamma strike or absolute gamma strike there's the put wall at 390 the put wall is the strike with the largest net negative gamma and that can be expected to act as support and then there's the 399 call wall that's the strike with the largest net positive gamma and that can be expected to act as resistance so the thing to note here similar to SPX is the predominance of put gamma below the 400 level and while we're on this page let's take a look at a couple of other things these are the combo levels these levels combine SPX and SPI gamma into one level and then that's converted to an equivalent SPX number so I want to point out a couple of levels here this is the that's that 3957 combo strike which was noted as support in the AM founders note and then there's that 3949 combo strike and again remember these are combo levels so that's the 3949 combo level and that's shown right here on this pop up that 3949 level that's a combo 3 meaning 3 the range of significance of gamma is 1 to 5 1 being the highest 5 being the lowest so medium significance there for that gamma level but anyway this is where that comes from and then finally let's scroll down toward the bottom here and we'll look at the open interest in volume adjustments and I focused on this the last few days this is SPX put data actually let me do this let's zoom in just a little bit on this so what this is showing is volume with the black bars versus open interest change shown in the teal bars and what this is showing us is the large amount of volume traded versus the change in open interest which is very small compared to the volume so this indicates that the bulk of the volume yesterday in puts was first of all at these levels here from 3950 up to 4000 concentrated around 3970, 75, and 80 and then also the volume was much much greater than the open interest so traders were trading primarily zero DTE options yesterday and not really taking much of a position in longer term options and that's reflected in the lack of change in levels for the most part this week okay that is the S&P 500, those are the levels so this explains again where those levels on my charts come from let's take a look at the NASDAQ now and for the NASDAQ we just look at QQQ NDX is not significant, the options market and NDX is just not significant so we just focus on QQQ for the NASDAQ and this is showing for QQQ the key gamma strike at 290 and then the put wall is also at that level and that is pretty obvious the strike with the largest net negative gamma and then the call wall is up at 310 here the strike with the largest net positive gamma and the thing to note here is really the dominance of put gamma below the 300 level alright let's take a look at data and as usual I'm going to focus on gamma notional this is market makers position on the gamma curve alright there's a question Luciano I will get to your question in just a moment when we get back to book map so let me finish up with my positional analysis here and then we'll go through some setups and we'll look at book map so this is the market makers position on the gamma curve for SPX in the left column SPI in the middle column and QQQ on the right column and first of all notice that all these numbers are negative so again that means that market makers position on the gamma curve is negative and it is pretty significantly negative especially for SPI so this means that traders are long puts and we just saw that in the gamma level charts traders are long puts market makers are short puts and so that's a positive delta position and they will have to sell futures to hedge their delta exposure as price decreases and that tends to again increase volatility in a negative gamma environment and the changes in this gamma notional from yesterday was mixed the changes were mixed SPX yesterday was minus 502 and today it's minus 463 so a little bit less negative for SPX and SPI on the other hand became more negative minus 2035 yesterday to minus 2126 today and then QQQ became slightly less negative minus 698 yesterday to minus 689 today so minor shifts in these gamma levels but all still significantly negative all right let's take a look now at VANA charts which illustrate this point graphically so this is VANA charts the VANA model for SPX what this is showing is market makers delta notional or delta exposure on the vertical axis and the strike price on the horizontal axis and this is showing that as market makers as price decreases market makers delta notional increases and they have to sell futures to hedge their delta exposure and this green curve is showing the current expiration and that's showing excuse me that is showing how market makers delta notional changes as implied volatility changes and that's the VANA effect the change in delta with a change in implied volatility and the black line is showing how market makers delta notional changes as time passes and that's the charm effect the change in delta as time passes so that is SPX here's SPI and those the steeper curve that corresponds with the gamma notional being quite a bit larger more negative for SPI than SPX and then there's QQQ so again all firmly in the negative gamma environment for all indices alright let's take a look at the last thing that I look at in my positional analysis this is the current key gamma strike compared with the previous key gamma strike for all the stocks in my watch list and notice I have trimmed down this watch list and these are just the stocks that I trade and watch on a regular basis and these are large cap tech stocks the indices QQQ and SPI and then the VIX and notice so in this right column I'm showing the previous key gamma strike that is from yesterday and then the current key gamma strike for today is shown in this D column and notice there's no change here so that is my that's what I do in my preparation and planning again and then based on this there was not a lot to go to go you know not a lot of guidance in this but my my thesis was neutral to bearish and that was really based on the levels the volatility trigger and zero gamma levels shifting lower and the SPI call wall shifting lower as well as that concentration of put gamma and the build of put gamma below the 4,000 level for SPI and the 400 level for SPI and also we saw in this long-term chart let's go back and take a look at that that the SPI slowly shifting lower the levels that are in play are shifting lower okay so that's the planning and preparation and again I pointed out in my introduction the importance especially because of all the trading and zero DTE options is to watch order flow and hedging flow during the day so let's go to first of all again the S&P 500 futures and let's take a look at at hero so this is one part of my execution process and then we'll go take a look at the S&P 500 this is the combined signal for SPX and SPI they used to call this ES and now they're just calling it the SPX plus SPI and that is the combined calls and puts for SPX and SPI and this is what I've been looking at for the S&P 500 whether I'm trading futures or SPI shares or SPX options this is what I look at this combined signal and this is showing that there were some good divergent setups actually in the morning just right at the open a confirmation long and I'm just looking for price to to follow options trades which is often the case and then confirm that with order flow and I showed that a few minutes ago how the order flow shifts from bearish on the way down to bullish on the way up so here's the shift in hero down there's the shift in price and this was a good divergent setup probably the first really good clean good clean setup here notice how hero starts to rise and then price follows a few minutes later so that is around 10-15 let's go take a look at that and book map and we'll take a look at SPI and ES so let's go back to ES now and let me get to your question now can I Luciano the question in YouTube can I elaborate on the background heat map orders and let me it may be easier to see in stock and I'll just let me tighten this up a little bit brighten up the heat map so what this is showing is the history of history of passive orders resting orders limit orders in the heat map so this information in the current order book is showing the limit orders the passive orders and the order book traders waiting to get filled at certain levels and then as those levels as time passes that information is shown in the heat map so this is showing a history of where the liquidity was in the order book okay so that is the S&P 500 and then we're looking at this reversal at at around 1015 and that is that they that's at the SPX I'm sorry ES 3950 level zoom in just a little bit more so again we saw the divergence in hero and now let's let's focus on some things in book map here and we talked about the clearly bearish order flow all the pink dots market sell orders all the way down to the 3950 level and this is pretty typical at certain levels these large iceberg orders come in that's shown by the blue there and that's showing 20 20 105 contracts and 13 separate executions and those are iceberg orders those are orders that large traders use to hide their size and then as price gets going again remember traders are taking positive positive delta options positions the shift to green dots there's a retest of somewhere between the ES 3950 and the SPX 3950 level and then price moves higher as the aggressive buyers come in and that's also fueled by stop orders and that's shown by this rising yellow line by stop orders and you can also see that with the on-chart indicator 650 by stop orders 358 so the stop order shifts from sell stops to buy stops and the price targets here were that these two gamma levels and price went straight through the this 3957 level and then chopped around the SPI 396 volatility trigger before dropping lower so the good bullish setup you know similar setups up and down and that was preceded again by hero by options trades positive delta options trades then these buy buy iceberg orders and then driven higher by aggressive buyers and buy stop orders alright that's the S&P 500 again multiple up and down setups today confirmed by confirmed by hero and by order flow alright let's take a look at SPI and we'll see similar setups sometimes I think the order flow in ES the futures is a little bit easier to read and spy and on this chart I have the same cloud notes these are my cloud notes and I'm noting the SPI levels you know that is 396 and then also I have added in the key SPX levels there's the 3950 level and then there's that 3957 level that was in play just at the open so really kind of a sloppy day not really uh... uh... uh... sorry not really holding to these levels exactly uh... but close enough alright let's take a look at some stocks now and let's take a I want to take a look at um... Nvidia first and then we'll go through uh... stocks the other stocks starting with Apple and I thought this was um... you know maybe the the clearest setup let's go take a look at Nvidia Hero for Nvidia and this was uh... you know definite confirmation of price action with options trades let's zoom in a little bit and somewhat of divergence here in the morning Hero definitely makes a lower high and then price price follows let's go take a look at book map and then I want to point out one other thing so there's a question about the heat map it's a little bit more clear uh... in stocks and the heat map showing again the history of liquidity resting orders limit orders and it's certainly more clear with stocks and that's what the heat map is showing so here's the I'm going to zoom in on this the setup in the morning Nvidia makes a series of lower highs notice the sell sweeps down there just below the 230 level and then the break below that level uh... you know if you didn't get one of these highs then the break below that level would have been a good entry to and the price target final price target down in this 225 liquidity so that was the that was the setup let's go back to go back to hero now and let me just check something I might have missed in video when I was adding my levels to the charts let me go back to book map yeah I just I changed the levels of my spreadsheet but I did not uh... just did not refresh the level so this is what I was thinking that this was the 230 put wall key gamma strike and the break was below that level and let's take a look let's go back to go back to hero now one thing I wanted to point out was this this note here I'm not sure about this time noting the Nvidia put wall was breached at 4 or 6 a.m and I thought that I thought it was talking about the the put wall breach after the open let's go check that let's go back to book map alright so maybe that first note was there right there at 4 or 6 a.m but this is the significant move alright so that's Nvidia now let's go take a look at some other stocks let's go to apple let's go take a look at hero put these back and what I saw was this confirmation slight divergence confirmation long around 11 1115 and that's right here and the reversal higher at the 145 50 liquidity target would have been the 147 hedge wall liquidity at that level and just like many other stocks apple's been trading in a tight range now alright so JC and YouTube ask hi Doug do you trade stocks trade stocks or SPX and hello JC I trade both so in SPX I primarily trade a little bit longer term options I don't day trade SPX I trade defined risk SPX like butterflies and no I don't focus on one sector I showed the stocks in my watch list and that is so JC asked do I focus only on one sector and I guess the stocks in my watch list are all tech stocks so I guess you could say that I do focus on on technology stocks but these are also the biggest stocks in the Nasdaq and S&P 500 they're extremely liquid and have options markets that are deep and wide and he says JC says it seems they are buying calls now and in one instrument alright so anyway that's apple let's go on to AMD and here I saw this divergent short this was pretty clear and in video we'll we'll get back to Nvidia and see what they're doing now so this is the divergent short that I saw in AMD hero dropping price responds a few minutes later let's go take a look at book map and there's that divergent short at the AD key gamma strike shown right here in the liquidity at that level and pretty good range for AMD today a couple of points alright let's move on take a look at Google alright so let's go take a look at hero now for Google and what I was looking at is this divergent long hero rising price follows around 1030 let's go take a look at hero or book map and there's that long first long 1030 reversal at the 90 call wall key gamma strike level and notice these levels can get a little bit mixed up for stocks especially it's kind of unusual for the P500 the call wall for example to be below the key gamma strike I don't know if I've ever seen that for spy before but anyway here's the reversal higher first time just after 10 the second time after 11 alright the next is meta let's go take a look at hero and confirmation long and short although it was a little bit a little bit iffy first thing in the morning with hero being flat and then responds actually after prices moving higher so not the best signal there in meta alright let's go back actually let's look at Microsoft first and it looks like Microsoft is trading up and down under range just like the SP500 and hero showing confirmation long and short let's go take a look at book map and it looks like the shorts were definitely the way to go here and the primary target is down below this 245 level with all the liquidity and that's the key delta strike let's go back and take a look at at hero so this is I marked in my notes confirmation short that's what I was looking at these right here and notice this notional value this number over on the right is pretty small but it is negative so on that traders are taking negative delta positions in Microsoft today alright back to Nvidia and let's see what traders are doing now so there's a comment that traders are buying calls now let's see if that's the case and I so the orange line shows calls separate from puts which is the blue line and this call line is pretty flat and I'm not putting much much emphasis on that I see the blue line so this is showing this blue line following shows that traders are buying puts in Nvidia and notice also this notional value minus 15 versus minus 100 for puts so puts you can just see from the line that put buyers are clearly driving Nvidia price and the number is substantially larger or more negative than the call sellers but overall both contributing to the to the drop in Nvidia and here this looks like this might be setting up this divergence might be setting up a short Nvidia let's go back and take a look at book map so Nvidia definitely trading in a range notice the concentration of volume in this 227 to 228 level you can just see by all the price action there the order flow as well as the price action volume profile let's take a look at QQQ what I had in my notes was a divergence long at around 1115 and that's a reversal looks like traders are stepping in front of this 290 put wall key gamma strike level so it did act as as support earlier this morning look at hero so it looks like there were a couple of long setups here and these are the kind of things that I'm looking for these divergences so hero rising and then price responding sometime later at key levels so couple of divergence long setups but a pretty choppy session and then overall price action somewhat bearish which pretty much lines up with my thesis for the day neutral to bearish and then let's take a look at Tesla and as usual there's a very strong correlation between hedging flow and price action and heroes providing signals both up and down confirmation long and short let's just see if breaking outputs and calls gives us any clarity and yeah it does somewhat it looks like primarily puts driving so in the morning traders were buying puts that's a clear pretty clear divergence signal there and then as price drop down to around this 200 key gamma strike traders stop buying puts and that and that flow of options puts has leveled off at the 200 key gamma strike and let's go take a look at book map here's Tesla sharp drop great great setup as traders were buying puts first thing in the morning tool try again down to the 200 key gamma strike looking at this level right here and then the liquidity down below at 199 and Tesla is a pretty volatile stock high beta and it's not necessarily going to respect levels quite as closely as the indices alright so there's Tesla short setup and then potential longs as well but the best setup was in the morning if you were fast following puts and then the clear target at the 200 key gamma strike and that the bonus down to 199 okay so Joe E says hi Doug can you compare the options flow from spot gamma and tradytix and sorry I'm not familiar with tradytix I don't know anything about it I use spot gamma and it provides everything that I need I think it's a great service and speaking of spot gamma let's just take a quick glance at the new interface and I have two screens up here the same dashboard so this is showing again they've combined equity hub and hero into one page here so I'm showing down below here this is my watch list and what used to be equity hub and now it's all on this one screen and let's go to well we can take a look at Tesla here it's on Tesla let's leave it so this is showing the composite view chart showing that puts dominate below this 220 strike and that is also the call wall we can see here that's the call wall and that's also the pivot level between the red put domination and the green call domination above and then the other key levels are showing on that chart and the lighter colors indicates a moderate position size let's take a look at the put and call impact chart and I think it's great to be able to see all of this on one screen and I have not had they just introduced this this morning so I have not had much time to play with this but I think this is great this is something that I had to ask for this the ability to zoom in on this showing the gamma levels orange is showing call gamma above and put gamma below and spot gamma makes a different assumption for single stocks than they do for indices so here for stocks like Tesla spot gamma is assuming that traders are long calls and or long puts and market makers are short calls and or short puts so this would all be all be negative gamma calls and puts but this is showing the gamma levels zoom back out zoom in just a little bit more showing the key gamma levels with these long vertical bars the change in gamma shown by these curves orange is calls blue is puts this is a live chart showing price action again around that 200 key gamma strike after the quick drop in the morning and this these bars on the left here are showing the gamma levels and notice the concentration of call and put gamma at the 200 level and this is a skew chart this is showing implied volatility for puts below this delta 50 line and calls above this delta 50 line so not much demand for calls here at least shown on this this chart and then finally we can look at the 5 day history so this is actually going back to 215 so it's actually showing longer than 5 days here and that's great showing this history you can see that the the key gamma strike for just for example has remained at 200 since the middle of February okay so that's all I have for today let's wrap it up just wanted to go over this interface I'm going to spend more time with this over the next few days and I'll be able to show more so this is really the first time I'm seeing this but it looks like it's a great enhancement so again kudos to spot gamma I want to thank everybody for watching today and thanks for your question to comments and I will see you tomorrow thanks again bye