 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. Risk disclosure, treating 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. 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. 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. 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 directional bias and setups for entries and exits. And just to be clear, I'm using the options market for my analysis. That's the basis of my analysis. And I will be talking about setups and underlying assets, but those setups can be taken any number of ways. With shares, with options, single options, option spreads, futures, that's up to you, however you choose to enter a trade. And questions and comments are welcome. And I will be watching the option stash dug chat channel and discord and the chat and YouTube for your questions and comments. So please post your questions and comments. It makes it a lot more interesting for me if this is an interactive session and hopefully a lot more informative for you as well as everyone else. All right, let's get started. My agenda for today, what I want to talk about today, first of all, go over some news items, earnings, and events for the rest of the week. I'll talk about my positional analysis and then I'll go over some setups. So first of all, earning season has started. The banks have been reporting earnings and tech starts today with Netflix reporting earnings after the market closed today. And then tomorrow Tesla reports after the market closed. And then finally, there is some minor economic data coming out this week, nothing high impact like a CPI or anything like that. And then Friday is options expiration. That is the monthly options expiration. And remember, SPX has two expirations every third Friday of the month, the AM settlement and the PM settlement. All right, let's take a look at charts. I'm going to start with the S&P 500. This is the ES S&P 500 futures and book map. And before I dig into this chart, I'm going to take a look at a larger time frame. And I'm going to go to the SPX. So this is the SPS XPS index. This is a 20 day one hour chart shown in book map think or swim. I'm sorry, this think or swim chart showing price and key gamma levels from spot gamma. And these are available to spot gamma spot gamma subscribers for a variety of platforms. And you can see that SPX has been a general uptrend consolidated for a couple of weeks. And now it's trying to make it higher, trying to move up to the 4200 level, which if price makes it up there should be the ceiling for price up into expiration Friday. And that is because that level is the call wall. That's the strike with the largest net positive gamma. And that can be expected to act as resistance. And let me point out a couple of other levels. These are the primary key daily levels for SPX. And there's the put wall. That's the strike with the largest net negative gamma that can be expected to act as support. And note that did move lower from yesterday. It was at 3,900. And today it has dropped down to 3,800. So that is the floor, the put wall, the ceiling, the call wall. 4,000 is the key gamma strike. That's the strike with the largest absolute gamma that can be expected to act as support resistance or a magnet for price. And then 4,110 is the volatility trigger. And that's the strike. That's spot gamma's proprietary gamma flip level. Below that level, market makers position on the gamma curve is negative. And that means they have to trade with price to hedge their delta exposure. And that tends to increase volatility in a negative gamma environment. On the other hand, like the current environment, market makers position on the gamma curve is positive. And they have to trade against price to hedge their delta exposure. And that tends to subdue volatility. So those are the primary or the key daily levels that I follow that I watch. Let's take a look at another thinkorswim chart and then we'll get to book map. And this is the another thinkorswim chart for SPX. This is today a one hour, one minute, one day chart, one day, one minute. And note how price has clustered around this 4,150 level. And when we look at the absolute gamma levels, we will see why. So that level has acted as support earlier in the morning, then resistance. And now appears to be acting as support again today. But price is really focused on that level. And just to point out, I have, I'm now tracking the expected daily move. This is something that I just get from thinkorswim. It's just based on the options market. And I still track the weekly expected move. And now I'm adding in the daily expected move. And we'll see that that has come into play quite a bit for the NASDAQ yesterday on the downside, the lower daily expected move. And today on the upside. Alright, so that is the SPX. And now let's take a look at book map. This is the S&P 500 futures ES. I'm showing the same levels on this chart. And I have a couple of columns of levels. This is spot gamma cloud notes providing the same levels. And here's that 4150 level in notes price, price chopping around that level now. And I have another column of notes. These are my cloud notes. And I'm using an add on called price lines to display these labels and draw the horizontal lines on my chart. So this is my cloud notes. And I'm showing the same SPX levels and spot gamma appears to be using a 27 point difference between ES and SPX. And I'll show you in just a minute what I'm using to calculate the difference. And it was about 24.75 is what I was using today, what I'm using today, the difference between ES and SPX. And that changes a little bit every day. And as the it changes with every rollover every quarter, and then it tends to move back towards zero as the current contract expires. Alright, so there's my 4150 level. And that is closer to what what was shown in the SPX chart. And I'm also showing spy levels. And this is this white label with red text. That is a key spot gamma level for spy. And that's the 415 call wall level. And note the we just point out levels that are in play, including the spy levels. Here is the spy 413 volatility trigger. And yesterday, recall that this level acted as resistance in the morning, and then price broke above it in the afternoon. And now today it is acted as support. So that is the spy 413 volatility trigger. So those are the levels that are in play, both SPX and spy. And I think it's important to track both of those levels on your S&P 500, whatever. If you're trading spy, SPX or ES, and ES is what I have shown here. I find it helpful to track both spy and SPX levels on my chart. And let me just show you where I'm getting the numbers. And I posted, these are from thinkorswim scripts, think script. I posted these scripts yesterday in Discord. And they all display a badge. So first of all, here is ES minus SPX. And this is showing that number in real time. And now it looks like it's about 25. Earlier today, it was a little bit lower, right? So I used 24.75. And I just enter that number in my spreadsheet that I used to create my levels. So that is ES minus SPX. And then here is the ratio of ES to spy. That's about 10.09. And again, I just add that value in my spreadsheet. And then here is SPX, the ratio of SPX to spy. That doesn't change that much. And I use that for my spy chart. All right, so that's where the numbers come from. And this credit again to Lewis last week for posting the ES minus SPX. And I just copied that and made a couple of changes to come up with the other ratios there. All right, so that is the S&P 500, the levels that are in play. Again, so far, the primary level 41.50 in the cluster price around that, acting as resistance, then support, and then the spy 413 volatility trigger acting as primary support today. All right, there were a few shifts and levels, just very minor. I mentioned before the SPX put wall shifted down from 3,900 yesterday to 3,800 today. So the floor has dropped lower for SPX. And then also for QQQ, the put wall dropped lower from 315 yesterday to 300 today. All right, let's take a look at the absolute gamma levels and see where this, where these levels come from. So we'll start with SPX. This chart is showing positive gamma or call gamma with the orange bars above the zero line. That's market makers position at these strikes. And then negative gamma or put gamma with the blue bars below the zero line. So here is the 4,000 absolute gamma strike or key gamma strike. Here's the put wall over on the left edge of the chart. Strike with the largest net negative gamma that can be expected to act as support. And then here's the 4,200 call wall, the strike with the largest net positive gamma can be expected to act as resistance. And if price keeps going up, Smart Gamma expects this level to be a ceiling for price up into Friday's expiration. So that's SPX. Let's take a look at SPI. I'm going to zoom in a bit here. So for SPI, here's the 4,100 key gamma strike or absolute gamma strike. And there's the put wall at 400. And that is pretty obvious. The strike with the largest net negative gamma, the largest blue bar compared to the orange bar. And then here is the call wall, the 415 strike, strike with the largest net positive gamma. And that was expected to act as resistance today. So that is SPI. Usually I have to do a refresh before I look at QQQ. So we'll look at the NASDAQ and for the NASDAQ we look at QQQ. And for QQQ, 320 is the absolute gamma strike or key gamma strike as well as the call wall. And then now the put wall has moved down to 300. So there's the floor for the NASDAQ for QQQ and the ceiling at 320. While I'm on this page, I want to take a look at one other chart. This is the Vana model. And I think this is important to take a look at every day. And this is going to give an indication of how market makers will be hedging their hedging activity. And there are two curves on this chart. This first, the light gray line is showing how market makers delta notional or delta exposure changes with changes in price. So delta notional shown on the vertical axis, price shown on the horizontal axis. And what this is showing is the price increases, market makers delta notional increases. They want to remain delta neutral. So they have to sell futures to hedge their delta exposure as price increases. So this light gray line is showing the impact of the change in price on market makers delta notional only. And then this pink curve or pink purple curve takes into account changes implied volatility. And you can see on the upside, there's not a lot of difference between the light gray curve and the and the pink curve. So this is indicating there's not going to be much of a van a tailwind for as price moves higher. Then on the other hand, as price decreases and implied volatility increases, market makers delta notional will increase and they will have to sell futures to hedge their delta exposure as price decreases and implied volatility increases. And the pink shirt pink curve is showing the fan effect the change in delta with a change in implied volatility. Alright, let's take a look at some data now just to confirm market makers gamma notional position. Alright, here's the data that I want to take a look at. This is market makers gamma notional for I'm looking at SPX spy NDX and QQQ. And it's in this row right here. So market makers gamma notional for SPX 4.5 billion for spy 8 billion for NDX 30 million pretty small compared to the other numbers. And then for QQQ 3.6 billion note all these numbers are positive. So for all these indicates indices market makers position on the gamma curve is positive. And that means that traders are short calls. Market makers are long calls. Hence the positive gamma position. And they have to sell futures as price increases to hedge their delta exposure and as price drops they can buy back their futures. And this tends to again subdue volatility in a positive gamma environment. Okay, let's take a look at some setups now. And let's start with the S&P 500. And I'm going to look at well first of all for those of you who may not be familiar with us. This is spot gamma hero. And it's showing the hedging impact of real time options. And right now I'm looking at a an S&P 500 chart. And this is showing a combined signal for SPX spy XSP and ES futures. And this is new adding in futures and XSP is not not significant compared to the others. So this is really looking at a signal for SPX spy and ES. And this is showing with the white line it's showing price. Just like a price chart. And this purple line is showing options trades for all those instruments puts and calls and market maker hedging activity. And before I take a closer look at the signal, let's just take a look at the separate separate signals. So we'll start with SPX. And recently that SPX has been a good indicator of price leading indicator of price. And I thought the the overall signal that the S&P 500 total signal was a little bit easier to read today. And that is typically my default. The one that I was just looking at the S&P 500. So I just want to show the separate signals. Notice this is about positive 1.3 billion. And now let's take a look at spy. And this is negative 923 924 million. Pretty strong correlation between the spy hero signal and price action, especially in the morning. And then here's the ES futures. And that's pretty similar to yesterday. Definitely a very signal for today minus 430 million. And I'm looking at, in case you can't see it, this total notional value here on the right. All right, so let's take a look at the combined signal now. And again this is typically my my default. I'm going to zoom in on this. Let me zoom in on the morning. And this signal provided a strong confirmation for a short. And I'm going to separate out puts and calls. And this is pretty typical for an index product. So today what this is showing is that traders were buying calls and buying puts. And the put buyers were winning. So I'm looking at first of all the the slope of the line. And this is for the call line. It's pretty flat. And for the put line, definitely falling. Second thing I'm looking at is this notional value here. Positive 619 million versus minus 2.16 billion. And also you can see visually see the strong correlation between the blue line and price. So the blue line is showing that traders are buying puts. And the orange line is showing that traders are generally up to this point in the day. The morning session. But they're buying calls but not not as aggressively as they're buying puts. All right, so let's go take a look at book map now. And I'm going to zoom in on zoom in on the morning session here. Sorry, having a little bit of trouble with my pen tool. All right, so let's try that again. We'll zoom in on the morning session. And there were some great short setups on trend breaks. So here's the first trend break. Here's the second. There's the short first short setup. And really, anyway, I'm looking at a lot of data here. If you zoom in, you could probably certainly see more entry points. For example, a retest of this 4160 resistance level. And note that price did break below the spy 415 call wall that was expected to act as resistance as well as the 4160 level. So price as traders were buying puts overall were looking at a net combined signal for SPX. Traders were taking negative delta positions. They were buying buying puts price breaks. And you can see the shift in order flow up here with the green dots, market buy orders leading up. And then the reversal lower with the pink dots. Let me just tone down the heat map so we can just see the the price action. And the heat map is showing the resting liquidity and the history of the his resting liquidity limit orders in the order book. And I can turn down the shade so we can see the price action a little bit more clearly. So their shift in order flow from bullish to bearish. And there's your first short entry. Looks like another retest of the 4160 for a secondary entry. And then another trend break with a price target at spy 413 that acted as resistance for good bit of yesterday until the the run up the rally late afternoon yesterday. So there's the ES ES morning setups. And we'll take a look now. Note the shift in order flow around 12 o'clock. A lot of aggressive buyers coming in market buy orders in icebergs ice larger traders using iceberg orders to hide their size that shown by this rising light blue line larger traders buying weakness as price moves down to the 413 spy 413 and the SPX 4150 level. Let's see what options traders are doing now. So we know that larger traders were buying on the way down with iceberg orders and aggressive buyers came in right around 12 noon eastern time. Hero now. Zoom out. Let's take a look at let's go back to the total signal. And you can see overall that it has shifted shifted higher here starting around 12. Certainly not with not the same correlation as the morning session the morning bearish setups. All right. So that's the S&P 500. I thought the the morning session was a great you know multiple short setups with those trend breaks confirmed by put buyers and also order flow and book map. All right. The next thing I want to take a look at is NQ and I pointed this out yesterday. It worked again today just on the on the for this time on the upper edge of the expected move for the day the upper daily expected move yesterday that level acted as a price target for a move down and then a potential entry for a long setup. And you could take that any number of ways. Yesterday you could buy a call spread buy a call sell a put spread trade futures trade QQQ and just the opposite today. And this is what I'm talking about this dark blue line may be a little bit difficult to see. This is the upper daily expected move and NQ tested that a number of times. And here is the here's the cash open at about 9 30. So buy a put sell a call spread buy a put spread sell futures any number of ways and options. I think of course you would want to trade QQQ options for this or NQ options but they're probably not very liquid. So I would definitely trade QQQ options with this. So there's your short setup signaled by the upper edge of the daily expected move and definitely confirmed by order flow. Note the just like ES green dots shift to pink dots sell stop orders shown by this yellow line on the sub chart help fuel the move lower. And initially cumulative volume delta was negative and now it has shifted positive. Also larger traders were actually selling this selling iceberg orders you can see by the falling light blue line there. Alright so another nice setup short setup and NQ just just by tracking the upper edge of the daily expected move. Alright let's take a look at some stock setups. Here's Apple. Let's take a look at at Hero for Apple. And in the morning there was a if you trade first thing in the morning confirmation for a long setup and then confirmation for a short just following Hero following the market makers up and then down. Let's go take a look at book map. So here's Apple the quick run up buy sweep shown here with these small green dots and note the order flow shift from green volume dots market buy orders to market sell orders not a lot of range here price moves down to the really back down to the opening print at 166 and has chopped around that level since since the move down and note the concentration of volume shown by the session volume profile around the 166 level. So that's Apple. Let's take a look at AMD and in YouTube JEC says the signal for Hero has been so good I have been able to anticipate order flow and direction well with it same here. I agree completely I think it provides a significant edge. You have to know you have to know your instruments that's why I trade and look at the same instruments day after day and I have a good feel for how they're going to respond for example quite often there are divergences that you can take advantage of with the S&P 500 and for Tesla as we'll see in a few minutes there's a very strong correlation between options trades hedging flow and price action. So you know that's that's why I follow the same instruments and watch them day after day. All right so here's AMD. Let's take a look at Hero for AMD and in the morning I'm going to zoom in on this so here's what a divergent setup looks like. Here Hero starts to make lower highs starts to move lower price makes an equal high slight maybe slightly higher high and then follows and that that was about a 10 minute a five minute I'm sorry five minute advance warning of the move lower and let's go take a look at book map again so there's AMD we'll zoom in sometimes the shift in order flow is not as clear in AMD as some other stocks but I think here it is buy sweeps up into this 92 liquidity and then aggressive sellers start coming in note the sell sweeps here so the buy sweep is the that's shown with the sweep indicator in book map the small green dots and then the sell sweeps are shown with the small red dots the aggressive sellers and then also the the volume dots change from green market buy orders to pink market sell orders and price moves down to the primary target at the 90 hedge wall key gamma strike in no liquidity at that level so good for a two-point move in AMD all right so nice short setup nice divergent short setup in AMD and looks like price is now continuing lower making a series of lower highs let's just see if there's any oops next target below would be 89 and then 88 as higher liquidity heading down towards the lower edge of the expected move for the week shown by that purple line there so that's AMD and the next is Google and I just added the added Google today so I have not had a time to had have to have had time to fill out my spreadsheet for Google so I don't have the I don't have the cloud notes yet I'll have these tomorrow for Google but I took snowflake out and added Google so I'll have the cloud note levels in tomorrow we can take a look at hero and we'll see where those levels are if there are any levels that are in play for Google and so 105 is the key gamma strike so that was the primary target for today and note another divergent setup hero moving lower while price makes equal highs and then moves lower and there was a 10 to 15 minute warning in advance so when I see this I see the divergence then I go to book map and start for looking for signs for a reversal and this triple top here not a lot of signs in the order flow still a lot of green dots there but the options traders were clearly driving price lower so there's a break below VWAP then to pull back for another short not a lot of range here's the 105 hedgewall key gamma strike so about a point and a half depending on your entry point range right so that's Google I'll have the uh have the levels in my cloud notes tomorrow here's meta let's go take a look at hero so I'm sorry that 105 was the key gamma strike and the key delta strike for Google all right let's take a look at meta and what I was looking at meta I'm going to separate outputs and calls and you can see that call sellers were in control today so I'm comparing the blue line with the orange line first after traders initially sell puts they quickly stop and then they're they start selling calls not quite the nice divergent setups that we saw in AMD and Google this one required a little bit more observation separating outputs and calls but overall negative delta hedging flow hedging flow back to book map so there's meta short setup and here at this reversal above VWAP again you can see the shift in order flow buy sweep market buy orders with green dots coming up the price of reverse is lower as aggressive sellers come in you can see that with the pink dots and all this is taking place below the 220 key gamma strike so that's meta here's Microsoft let's take a look at hero and this is more of a confirmation setup a little bit bearish initially hero levels off price rises a little bit then traders start more aggressively taking negative delta positions and price follows with a break below the 290 key gamma strike trend break and then a price below move below the 290 key gamma strike look book map so here is the there's that trend break not quite almost a retest of the 290 key gamma strike and then price moves lower to liquidity targets below at 288 and 287 and note price does move below VWAP so it tests VWAP and moves lower and then breaks below the 290 key gamma strike that's Microsoft then price chopping around the between the 287 288 level and note the volume concentrated in the session volume profile just below the 288 level right let's take a look at Nvidia and really choppy session this is I find something like this kind of a little bit difficult to trade this great shot up five 10 first five 10 minutes if you're ready for that and that's what you're looking for um and let's uh let's take a look at um hero just to point out price moved right up to the 280 call wall and it did act as resistance as expected so it overshot a little bit up to 281 but then move lower let's take a look at hero and video confirmation long in the first 20 minutes and there were some pullbacks if you zoom in you can see the pullback entries pullback entries as hero is making a straight line up to the 280 call wall and then above hero levels off and price moves lower so once the options traders start taking profits or reversing taking negative delta positions price reverses lower so knowing that that 280 was expected to act as resistance um made for a good price target for the morning move higher and then also for short at that level that's in video let's take a look at qqq and the qqq signal has been um let's say a little bit out of sync the options traders have been a little bit out of sync with price action and qqq recently but this was a uh divergent short in the morning so just a few minutes after the open hero starts making a lower high qqq moves up and then starts moving lower let's go take a look at book map so here's qqq chop around the 321 level and remember that was the uh in q uh upper edge the uh daily expected move and then price dropped sharply and remember the options traders were already taking negative delta positions order flow shifts bearish price drops below vwap and makes a quick drop down toward the 318 volatility trigger so combined with uh for this for the morning this morning move uh combined with knowing that in q was that the upper edge the uh expected move for the day and hedging flow was bearish traders were taking negative delta positions uh set up a good short in qqq today let's take a look at spy and this is just a another version of the smp 500 so showing the same setup a little bit easier to read in in uh es so if i if i'm trading spy i often look at the es chart let's take a look at tesla so i mentioned tesla a while ago strong correlation between hedging flow and price action so you can see for qqq for a comparison a divergent setup in the morning and then not much correlation then on the other hand here's tesla and typically in the morning especially there's just a very strong correlation one to one correspondence between hedging flow and price action and i think that's because when traders are taking options positions in tesla market makers hedge that activity right away um for example for a single stock if traders are buying calls market makers are selling the calls and they have to buy stock to hedge their delta exposure all right so there's tesla confirmation up and down and let's zoom in on the morning here choppy in the um over about the first 45 50 minutes and then hero starts to move lower and price moves lower as well and let's see what traders were doing here so up to this point in the day about 10 30 traders were buying calls i'm looking at this notional value it's positive 11.25 million and then they were buying puts and the put buyers were winning this is minus 48 million so the put buyers were in charge and when you separate out the lines like this and you can see this in in hindsight sometimes during a real time you know if you're looking at 9.50 the information might be different but then it shifts or 9.52 9.55 so we know at that time at 9.50 that traders were they were buying puts shown by the falling blue line and they had been buying calls and they stopped buying calls and then there's the signal to short so let's take a look at at bookmap down going to zoom in trend break entry all right so we know that and there's that little consolidation uh for about five minutes so we know that traders were buying puts and around here we know that they had stopped buying calls price drop takes a quit drop lower does a retest of the 187 level in vwap and then moves lower so there's your short setup in nvidia first price target at the 187 185 hedgewall level next price target next round number liquidity level at 184 so a three-point drop in tesla there let's just take a look at cvd i often look at cvd for tesla and you can see the shift from slightly bullish neutral to bearish and you can see that here as well the pink dots coming in by sweep up to the 187 50 level consolidation then the drop lower again as traders started taking negative delta options positions all right that's tesla and let's take one last look at the s and b500 and then we'll wrap it up for the day so tesla trying to recover here let's just see what it's going to do at the uh see if we get any signal at this 185 hedgewall see if it's uh trend break retest of the 185 let's take a look at hero and see if we uh get any signals see if that's going to be uh let's just take a look at hero take a look the total signal zoom out so now it looks like hero is moving lower making lower highs all right so there's tesla and let's take one final look at the s and b500 and then we'll wrap it up for the day so now it looks like overall hero is still net negative but traders are continuing to take positive delta positions and that started around 1 pm eastern time go to book map keep an eye on tesla and there's the s and b500 and this is a pretty typical pattern morning move down and then a rally up in the afternoon and price could head up to the 41 60 level sb sbx 41 60 potentially the spy 415 call wall and maybe higher who knows although it appears to me that order flow is not really supporting a lot of this note the kind of the flat line for cvd icebergs and stops all right so that's all i have for today uh everybody was kind of quiet today there were a lot of questions yesterday uh not much today so anyway i'm going to wrap it up that's all i have for today thanks for watching and i will see you tomorrow