 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 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. First 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 on Bookmap Discord, there's an options-dash-duck chat channel that's a great place to post questions, comments, and content related to the topics of my presentation and the topics of the channel that I'll go through in just a moment. And note that Bookmap Discord is a very large, great community of active traders. There's a wide variety of content there on a variety of asset classes, stocks, options, futures, crypto, and also on a wide variety of languages and a group of traders that are working together to help each other become better traders and learn more about how to use Bookmap. I'm also on X. For all of you who noticed Twitter, my name there is at Doug Pless. Here are my key tenets for trading. And first, number one, options trades and market maker hedging activity are key drivers of price and many stocks and futures. And the stocks and futures that I watch, they are definitely options traders are definitely key drivers of price action. And for the S&P 500, SPX is the underlying index. And SPY is the ETF version of SPX. And ES is a derivative of SPX. So when traders buy and sell puts and calls in SPX and SPY, market makers hedge their delta exposure with ES futures. So for example, if traders are buying SPX and SPY calls, market makers sell the calls and they have to buy ES futures to hedge their delta exposure. Likewise, the NASDAQ 100, NDX is the underlying index and Q is a derivative of NDX. And when traders and QQQ is the ETF version of that index, and when traders buy and sell puts and calls in NDX and QQQ, market makers will hedge their delta exposure with NQ futures. The focus of my presentation today, and the focus of the options-dash-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 positional at planning, and I use positional analysis. I look at how traders and market makers are positioned to 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 first of all, I use positional analysis because I think it is forward-looking. This will, this, how market makers position, how traders and market makers position themselves and the options market, indicates whether they are looking for and expecting and positioning themselves for higher prices or lower prices. And I'll talk about some examples of that in just a minute. And again, I think this is forward-looking as opposed to other forms of analysis. So this is exactly what I'm going to do today. I'm going to look at how traders and market makers are positioned to the options market for the SB500 and NASDAQ and how those positions change from Friday to develop a thesis, bullish, bearish, and also get a sense for the expected trading range for the day. The second step in my process is execution. I look at real-time order flow and book map and real-time market make your hedging flow and spot gamma hero to confirm my thesis. And when I talk about setups today, I will be talking about setups and an underlying asset. So I'm using this execution process for setups and I will be looking at an underlying asset and setups and those assets can be taken any number of ways. For example, the SB500 setups can be taken with ES futures, SPY shares, SPY options, SPX options, or even ES options. Questions and comments are welcome and I will be watching both the options dash jug chat channel and discord as well as the chat and YouTube for your questions and comments. Please feel free to post and I'll do my best to answer your questions. And hello Caesar welcome glad you're here. Hello Stephen welcome glad you're here as well. All right here's my agenda for today. Tuesday, February 20th. First of all I'm going to go over news items, economic data, events, and earnings. Then I'm gonna go through my positional analysis. I'm gonna do exactly what I said. Go look at levels and play for today and then I'll take a look at how these levels have changed from Friday. Then I'll review some setups using these levels that happened earlier today and then I'll take a look at the live market and when I get to the live market if anyone has any stocks they want me to take a look at please let me know and I'll be glad to do that. All right let's get started with news items, economic data, events, and earnings. So it's a pretty light week but there are two key events both tomorrow at 2 p.m. FOMC minutes are released and then the big event of the week and everybody is talking about NVIDIA. NVIDIA earnings or NVIDIA reports earnings after the market closes tomorrow. According to Spot Gamma the expected move is plus or minus 9.65%. Then on Thursday there is some data coming out 8 30 a.m. jobless claims and 9 45 a.m. PMI data and then a variety of Fed speakers throughout the week and any I will take a look at NVIDIA for sure. All right let's move on to positional analysis now. I'm going to start with the SB 500. This is the ES Futures in book map and before I take a closer look at this chart I do want to step back and take a look at a larger time frame and I'm going to go to the underlying index SPX. So let's start with a one-day chart in SPX and very quickly the current rally began October 30th and from low to high was good for about 940 points. Currently some consolidation going on. All right let's so this is a one-day chart. Now let's zoom down in time frame look at a one-hour chart so we can get a closer look at the levels and play. This is a 30-day one-hour chart showing the top of the trend and let's start with the last expiration the January 19th expiration right here. This was bullish and a call dominated expiration a little bit unusual usually there's some consolidation after a call dominated expiration and the SPX broke out above the 4800 level and has continued all the way up to around 50-50. Call walls have gradually moved up some up and down but right now the call wall is at 5100 so the call walls in starting early this year have ranged from 4800 all the way up to 5100. All right let me point out levels on this chart. First of all the dash purple lines are showing the lower and upper weekly expected move. This is based on the options market. I update this once a week over the weekend so SPX is still trading above the lower or weekly expected move. The dash blue lines are showing the lower and upper daily expected move and SPX is trading below the lower daily expected move. This is also based on the options market and I update these this daily level once a day this is based on the close for the previous day and I do post these numbers in bookmap discord every day in the options dash Doug chat channel. All right those are the expected moves SPX trading below the lower daily expected move. The other lines on this chart are showing spot gamma levels. These are proprietary spot gamma levels. They're provided to spot gamma subscribers. They're shown on a variety of trading platforms. This is thinkorswim. I'm going to point out the key daily levels. First of all here's the put wall that's at 4500. That's a strike with largest net negative gamma that can be expected to act as support. That level did move down pretty substantially from Friday. A note with Friday expiration a lot of that gamma has expired so it typically takes a few days the following week after expiration for the levels to settle in to more permanent homes. So the levels I anticipate the levels moving around quite a bit the first couple days until they settle into more stable levels. All right the next level up is the volatility trigger that's at 49.95 so that's way up here and that a spot gamma's proprietary gamma and volatility flip level. Below that level market makers position on the gamma curve is negative. In a negative gamma environment market makers have to trade with price to edge their delta exposure and that tends to enhance or increase volatility. On the other hand above that level market makers position on the gamma curve is positive. In a positive gamma environment market makers have to trade against price and that's in tends to subdue or decrease volatility. And note that SPX is trading below its volatility trigger. Started out in a negative gamma a positive gamma environment for the at the beginning of the day but now trading below that volatility trigger. Next level up just above that is 5000 that's the absolute gamma strike that's a strike with large absolute positive and negative gamma so that's where most of the gamma weighted open interest is concentrated and that absolute gamma strike has been at 5000 for quite some time. Then as I mentioned before the call wall did move up to 5100 that's a strike where large net positive gamma and that can be expected to act as resistance. So the call wall moved up the volatility trigger moved up and the put wall moved lower. All right let's take one final look at SPX. I'm going to go to a one minute chart just so we get a closer look at the levels and play for today. So this is starting last Friday this reversal Friday afternoon options expiration and a call dominated expiration calls starting to lose value price moves lower and market makers can sell their long futures hedges and that move lower continued today. Yes me 500 gap down lower and has traded earlier today up and down around this 49 76 zero gamma level and just below that lower day they expected move. All right let's go to book map now or in a book map I have my own cloud notes so I can show these levels. There's the zero gamma level acting as resistance day good entry points for shorts that I'll talk about in a few minutes. Here's the lower day they expected move for ES then I also have spy levels on this chart. Here's the spy 498 zero gamma level acting as a great entry point for short just after the open. I did post this set up in discord this morning. All right so I've shown the SPX levels on the SPX charts now I have moved them over to my ES charts again key levels and play 49 76 spy levels 498 zero gamma level 497 large gamma three level. All right so these the these are the levels where gamma weighted open interest is concentrated and typically these levels can act as support in resistance. This is where traders and market makers are likely to react and this is these these are the levels where I want to trade. And we'll talk about setups in a few minutes. All right so for the SPX volatility trigger call wall move higher put wall move lower and for spy the call wall move lower. So the call wall down to 500 for spy. So kind of a mixed picture for the SMB 500 and that was not the case for the NASDAQ. All right so speaking of NASDAQ let's move on here the NQ futures and book map and let's take a look at the underlying index charts before we get to this chart. I'm going to start with QQQ and I'm just going to go to a one-day chart. This is a one-minute chart I'm sorry one-minute chart 430 is the absolute gamma strike acting as resistance this morning. Good entry point for short. Here's the put wall at 425. Price is trading has traded below that level today. Also the 427 level round number level not a spot gamma level acting as resistance earlier today. And for QQQ that was a bearish hat trick volatility volatility trigger put wall and absolute gamma strike all move lower. So that is bearish for QQQ. All right let's take a look at NDX then we'll get back to the NQ chart. NDX levels of play here's the volatility trigger at 725 acting as resistance. So NDX is trading below its volatility trigger. All right let's go back to book map now and note for NDX all four key daily levels shifted lower. So that is very bullish volatility trigger put wall call wall and absolute gamma strike all shifted lower again very bullish bearish and for NQ it was also a bearish hat trick. Three levels move lower so very very bearish for NASDAQ. With all those shifts lower and levels this indicates to me that traders were looking for expecting and positioning themselves for lower prices in NASDAQ. All right let's wrap up positional analysis. We'll look at gamma notional. This is market makers position on the gamma curve at the beginning of the day for the S&P 500 NASDAQ Russell 2000. And note all these numbers did move lower from Friday still positive at the beginning of the day for SPX. So in a positive gamma environment again this means that traders are short calls market makers are long calls hence the positive gamma and they have to trade against price to hedge their delta exposure. Pretty much neutral for spy and negative for QQQ. Let's take a look at one other thing now. I'm going to take a look at the atom wall it's interesting today. I'm going to go to the SPX. What this chart is showing is market makers delta notional on the vertical axis and the spot price for SPX on the horizontal axis. There are two curves on this chart. The first light gray curve shows how market makers delta notional may change with changes in price only. And the purple curve adds implied volatility to the equation. That shows how market makers delta notional might change with changes in price and implied volatility. And the purple curve is what we want to take a look at. Let's take a look at current prices SPX right around 49.65. Let's locate that on the chart. So that's right around here. So definitely on this left sloping portion of the VANA model. This indicates that as price has been falling implied volatility dropping. So price falling, implied volatility increasing, price falling, implied volatility increasing, market makers delta notional increases. And they have to sell futures to hedge their delta exposure. This is typical of a negative gamma environment. Market makers selling futures as price drops. And if price does increase, implied volatility drops, they can buy back their short futures. So on this portion of the VANA model here, remember market makers want to remain delta neutral. So in this case their delta is increasing as price drops and they have to sell futures to hedge their delta exposure. Let's take a quick look at SPI. SPI right around 49.6. Also on this left sloping portion of the VANA model indicating market makers will be trading with price to hedge their delta exposure. Finally, QQQ. All right, this VANA model is typical of a very negative gamma environment. There's hardly any slope up to the right. Let's see where QQQ is trading right around 425. So pretty far up on this VANA model. Indicating again, market makers will be trading with price to hedge their delta exposure buying and selling in Q futures. All right, let's move on now to execution. So everything that we've looked at so far is based on static data. Again, I'm looking at these levels to see how market makers or how traders and market makers are positioned today in the options market and how those positions change from Friday, from the previous day. All right, let's see what options traders are doing today. So this is the hero model, hero signal. Hero stands for hedging impact real-time options. This is from Spot Gamma. It's available to Spot Gamma subscribers showing on a variety of trading platforms. This is the hero signal. It's web-based. This is available to Spot Gamma subscribers. It's showing real-time options trades. So what this chart is showing is price for SPX with a white line, the hero signal in purple, that's showing options trades and market maker hedging activity for a combined signal of SPX by XSP and ES futures. I'll zoom in on this chart. So when the hero signal is falling, this indicates traders are taking negative delta positions, they're buying puts and or selling calls. Market makers would take the opposite side of those trades and they hedge themselves with ES futures. So in this case, when traders are buying puts and selling and or selling calls and SPX and SPY, market makers take the opposite side of those trades and they have to sell ES futures to hedge their delta exposure. All right, let's zoom in on the morning. The morning was a little bit difficult to read. The hedging flow in the morning was really more typical of a positive Gamma environment. Options traders buying and selling, buying dips, selling rips, so more mean reverting in the morning until this final push-up, right around 11 a.m. and then the hero signal shifted lower. So let's take a look at the morning session and I did post this in Discord, this first short setup. I'm going to separate out puts and calls. So notice the rising hero signal right at the cash open. Let's see what traders were doing. They were buying calls at the open. Showed by the rising orange line. Took their foot off the gas, started buying puts, and price moved lower. And these traders who were buying calls got their face ripped off by aggressive sellers. All right, this is the Mag7 signal. I'll talk about this more when we get to NASDAQ. This is showing options trades of market-maker hedging activity for a combined signal for the stocks known as the Magnificent 7. That's Apple, Amazon, Google, Meta, Microsoft, Nvidia, Tesla. And these stocks make up a very large component of the NASDAQ 100. Also a large component of the SB500. And I always look at this signal when the hero signal is falling. This is showing that traders are buying puts and selling calls in the Mag7 stocks. And it's hard for the indices to move higher. Let's go back to the SB500. I'm going to go back to the total signal. Zoom in again. So really any of these peaks in the hero signal were good points to sell. Sorry, whenever I switch back from total to puts and calls, it triggers this auto zoom. All right, let's go take a look at book map now. Go back to ES. Going to zoom in on about the first hour and 15 minutes. So remember, from the open, traders were started aggressively buying calls that did not last very long. That's also showing book map by the green volume dots. Volume dots indicate market buy minus sell. Green dots indicate more buyers than sellers. Magenta dots indicate more sellers than buyers. So as price was rising in the morning, large traders were fading that move with iceberg orders. That's shown by the falling blue line in the sub chart there. Also the on chart indicator. This was also a little bit of a stop run right up to the 4995 volatility trigger. That is the SBX volatility trigger. There's the stop run shown by the on chart indicator. And then price reverses lower. So large traders leading the way, fading the move higher with iceberg orders. Then aggressive sellers start to come in. Oops, shown by the magenta volume dots and a very good entry point right around 5000 five ES 5000 five right at the spy 4980 gamma level. Note in the sub chart I have I'm showing iceberg orders with light blue line cumulative volume delta with a magenta line and stop orders with the yellow line. I have them all in some mode. One setup that I like to look for or some maybe a confirmation of a setup is when this gap widens out. So I what this means is that large traders are selling with iceberg orders and as price starts to move lower they stop sell they were selling with iceberg orders. They stop selling then aggressive sellers start to come in and also sell stop orders fuel that move lower. So that gap widens out. The move lower led by large traders selling with iceberg orders. Just a good visual confirmation. Alright so there were some additional entries. All of the levels that I've talked about. First entry 498 zero gamma level. Second entry at the spy 497 large gamma 3 level. Entry at the SPX 4976 zero gamma level. We scroll over and one thing I forgot to mention there is a difference in price between ES and SPX and today it's around 14.5 maybe a little bit less now maybe a little bit closer to 14. I'm using 14.5 so ES minus SPX is equal to 14.5 so I'm showing the 4970 level that's SPX 4970 at ES 4984.5. Alright so more shorts. Let me zoom out on this just a little bit. 1030 reversal aggressive buyers start to come in and then that reverses lower right around VWAP shown by the light blue line also again that 497 level. Alright so multiple shorts multiple short entry points in the morning at the key levels that I've been watching and that I have marked on my charts. Alright let's go back to hero. Alright so at let's say 11 right around 11 a.m. the hero signal for the day was was positive slightly positive 1.25 billion notional value positive and then shift to lower and now continues to make lower highs. Traders continue to take negative delta positions. Alright let's take a look at NASDAQ and for NASDAQ I'm just going to go to the mag 7 signal so I showed this already. Traders were buying puts and selling calls in the mag 7 stocks. Let's go to NASDAQ and book map and note the price here is shown for QQQ those are prices for QQQ for this mag 7 signal go to NASDAQ so remember from the open traders are taking negative delta positions in the mag 7 stocks which make up a very large component of the NASDAQ 100 just like the SME 500. There were some aggressive buyers coming in at the open resistance at the QQQ for 30 level aggressive sellers start to come in shown by the by the magenta volume dots and cumulative volume delta shifts lower then the price starts to move lower sell stop orders fueled to move lower aggressive sellers sell stop orders that's shown by the following yellow line and also market makers selling NQ futures and also selling stock in the mag 7 stocks which again make up a very large component of the NASDAQ 100 entry points here's a little pullback to VWAP and the 429 and NDX 625 level short at 427 note now NASDAQ is trying to make its way up above the QQQ put wall at 425 all right let's take a look at some stocks and slow to Rozzy ask is Tesla down 5% with the AI guys because of call gamma unwind we can take a look at that at first thought I would say no I look at call gamma unwind for stocks that have been driven up that were driven up pretty sharply last week with call buying like SMCI right and you pointed that SMCI out on Friday I showed that and that was definitely a textbook example of a call gamma unwind so Tesla I don't maybe not so much alright so let's take a look at some stocks I'm gonna start with Apple let's go see what options traders were doing let's go to Apple Apple note the timely flow alert getting your attention indicating significant options activity and Apple find support at the 180 put wall here that's also the key gamma strike and they the hedgewall as well Apple dropped down to that level found support no traders as Apple was moving down toward the put wall they took their foot off the gas they started taking positive Delta positions and price consolidated found support at that level let's go to book map here's the 180 put wall acting as support very very close to 180 note all the liquidity at that level those are resting limit orders below price they are limit buy orders very typical for stock come in at the cash open and stay in the order book until they get filled so most likely there were some filled at this level and then more more buyers came in at 180 all right the next is AMD very bearish day here at AMD let's see what options traders have been doing go to AMD some in again traders taking negative Delta positions flow alert indicating significant options activity get your attention and that occurs right at the 170 key gamma strike hedgewall level right around 1030 traders take their foot off the gas they start taking positive Delta positions and AMD consolidates let's go to book map 170 key gamma strike would have been a good entry point for a short let's zoom in so note the little pullback to 170 whoops little pullback to 170 good entry point for a short as traders were taking negative Delta positions and that flow alert went off all right let's take a look at Nvidia and Nvidia was down massively today at one point I looked it was down 44 points so big drop in Nvidia here from the cash open showing down over 40 points all right let's see what options traders are doing in Nvidia and they were taking negative Delta positions from the open took their fought off the gas right around 1220 but still not not starting to take positive Delta positions let's zoom in on this so we can see this alert they came in let's see what time that was so right around 931 just one minute after the cash open flow alert comes in get your attention to take a short whatever you want in an Nvidia sell stock buy a put buy a put spread sell a call spread good entry point here let me zoom in a little bit more on this pullback and that happens about two minutes after the alert and then Nvidia more starts to make a series of lower highs all right so Nvidia traders are getting out taking their profits before Nvidia reports earnings tomorrow afternoon all right let's go back to hero almost separate outputs and calls now so today traders have been selling calls and buying puts calls shown by the falling orange line traders sell calls market makers by the calls they have to sell stock to hedge their delta exposure the same with the blue line showing puts their buying puts all right let's take a look at let's take a look at a couple stocks in equity hub hello Teddy welcome glad you're here all right first let's take a look at Tesla see if we can answer so to Rossi's question I'm gonna go a history here I'm gonna look back at last Friday I'm looking at next expiry gamma percent and also the top gamma expiry so this is the these are the numbers for Friday so there was 38.72 percent gamma expiring on Friday so that is significant that's over 30% so that could very well be a call gamma unwind so to Rossi let's take a look at things so there is some call domination this is for today so this is not the same view as it would have been on Friday but so some call domination above the 210 strike that's shown by the green on the right and put domination on the left shown by the red or the orange and that's also shown by the this shift in the these the crossover the orange line call line and the blue line the put line and the put call impact chart that's showing that at 208 all right so so potentially some call gamma unwind still going on and in Tesla today but definitely going on in and video again remember this is for today not Friday let's go to the history so what this is showing is for Friday 53% gamma expiring on Friday so we know traders have been buying calls for quite some time in Nvidia and the expired traders have been selling calls and market makers are now as traders are selling calls market makers take the opposite side of that they're selling Nvidia stock they hitch their dealt exposure and Teddy ask is this live every day where can I find your calendar yes it is live every day at 1 30 p.m. Eastern time so I stream live they did live daily every day Monday through Friday on the bookmap YouTube channel also bookmap discord at 1 30 p.m. Eastern time free and available to everyone all right let's go back to hero now go back to the SP 500 let's go take a look at mag 7 I'm gonna go back to the total signal so for the SP 500 overall hedging pressure continues to the downside traders continue to take negative Delta positions getting a little bit more clarity with the total signal here today hero signal continues to make lower highs lower lows let's go to bookmap and you're welcome Teddy so if anyone at this point if anyone has any stocks they want me to take a look at please let me know I'll be glad to do that all right with the hero signal falling like it is I'm still looking for looking for short opportunities looks like the 49 70 level might have been a good entry point for a short just below that level a couple times before all right nanny wants to take a look at SMCI I do not have that a book map we can take a look at hero and see what traders are doing and last time I did take a look at it earlier looked like it had dropped another hundred points traders taking negative Delta positions up until about 10 45 11 a.m. a couple of flow lords right at the cash open traders take negative Delta positions and SMC moves down to the 700 hedge wall up from above around 800 the key gamma strike down to the 700 hedge wall they stop taking negative Delta positions now it looks like SMCI is trying to recover alright SMB 500 again hero signal continuing to make series of lower highs lower lows traders continue to take negative Delta positions let's go back to book map short scalps at the 49 70 level let's check NASDAQ NASDAQ trading just above the QQQ 425 put wall large traders have been buying this move down with iceberg orders all day that shown by the rising light blue line on the other hand aggressive sellers have been selling all day that shown by the falling magenta line also stealth sell stop orders have been fueling the move lower as well so right now it looks like aggressive sellers may want to move in queue down below the put wall now maybe acting as support we'll see let's go back to SMB 500 and pretty choppy action in the afternoon let's go back to hero take the mag 7 signal so it's pretty much leveled off sometimes when that happens I like to go to a shorter rolling window period a look back period so this is now looking at just the last 30 minutes of data instead of the entire day's worth of data so starting around 12 20 traders is start did start taking positive Delta positions NASDAQ trying to recover now that is slowing down right right now in the SB 500 I'm looking for a reaction at the 49 70 level note also the liquidity in the order book limit sellers at that level look like they pulled right before price moved up to that level let's go back and take a look at hero go back to the SB 500 remember we're on a 30 minute rolling window period hero forming some of a triangle there let's go back to the all day one day rolling window look back period so far the trend is down and Pharaoh asked they're not filled at 49 70 what we can take a look at that if we zoom in so it looks like they looks like these orders might have been filled what it looked like to me as they were they pulled right before but looking in more closely here so it looks like some of those limit sell orders were filled right so now they're trying to break above 49 70 still waiting to see what happens at this level so again acting as resistance so a short scalp well maybe now they're coming back up and testing it again but a short scalp would have been gunned for two points there all right I'm going to go ahead and wrap it up remember tomorrow FOMC minutes come out at 2 p.m. that will be in the middle of my session so whatever wherever I am at at 2 p.m. I will stop we'll take a look at the SB 500 see if there's any reaction to the minutes and then see how traders are positioning themselves in Nvidia for the earnings report after the close tomorrow afternoon all right everyone thank you very much for watching thanks for your questions and comments and I will see you tomorrow thanks again bye