 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. I'll bookmap the minute 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. Here's my contact information. The best way to get in touch with me is through Discord. My name on Discord is Doug P. Also in Bookmap Discord there's an options-doug 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 which I'll go through in just a moment. I'm also on X, formerly known as Twitter, and my name there is at Doug Plus. The focus of my presentation today and the focus of the options-doug chat channel is options order flow. The impact of options markets on stocks and futures and the influence of market maker hedging flow on price action. I have a two-step process for trading and the first is planning and I use positional analysis. I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as a directional bias. The second step of my process is execution. 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. When I talk about setups today I will be talking about an underlying asset. Setups can be taken any number of ways. For example the SMB500 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-doug 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 Don welcome glad you're here and Greg good afternoon to you as well welcome glad you're here. Very interesting day all the way all the way around and we'll go over it. So here's my agenda for today. First of all today is Wednesday November 1st. It's the FONC announcement today. So what I'm going to cover today first of all news items economic data events and earnings for today and the rest of the week and then I'll go through my positional analysis and then time permitting I will review setups from this morning. That depends on the how far I get before the FOMC announcement. I'll stop whatever I'm doing just before 2 p.m. and we'll watch the live market. All right let's get to the news items for today. There was quite a bit of news this morning that was definitely market moving. So first of all the ADP report came out at 8.15 a.m. Eastern time and that came in a little bit less than forecast but greater than previous and this as far as I know was unannounced you know of course ADP and other economic data reports typically are known. This was quite a market mover and I think it was what sparked the rally today. This was at 8.30 a.m. Eastern time. This headline Treasury details plans to step up size of bond sales to manage growing debt, load, and higher rates. So this is from Treasury Secretary Janet Yellen. Here's the details if you're interested but that was the the headline that we just looked at. So let's take a look at book map and we'll see what happened at 8.30 a.m. Eastern time. A very bullish response to that news right at 8.30 a.m. Eastern time and that sparked the rally and we'll see where that rally ended in just a few minutes. Alright so that was the the news at 8.30. Let's also take a look at the chart of the 10-year. So this is the 10-year Treasury rate and or the really the 10-year Treasury futures. So here's the so this dark area is the regular trading hours open. Treasury's open at 8.15 a.m. Eastern time. Here's the news at 8.30. Treasury's dropped sharply and then they start to reverse higher kind of playing that part in the reversal lower in the S&B 500 about that same time. But this was definitely there's been an inverse relationship between Treasury yields and and the equity market definitely helping to drive that higher on that news. Let's also take a look at so we've seen Treasury yields now let's let's go to VIX on this chart I'll talk about this in a few minutes. Alright so that was the the big market mover this morning driving that move higher starting at 8.30 a.m. Eastern time same situation in NASDAQ note the launching point here the 350 volatility trigger that was in play yesterday I posted something in discord about that that's the QQQ 350 volatility trigger and also I forgot to point out the launching point for the move higher this morning the spy 417 volatility trigger also in play yesterday alright let's wrap up the news now excuse me so at 945 there was some manufacturing PMI data that came in just right at 50 that was equal to expected and previous also at 10 a.m. more manufacturing PMI data came out less than expected and also less than previous jolts report greater than expected less than previous and then of course the big event for today and for the week is the FOMC announcement and press conference let's see what the market is expecting this is the CME Fed watch tool note the current target rate 525 to 550 basis points that shown right here there's almost a 99% chance of no rate change earlier today there was a slight maybe less than 1% chance of a rate increase that has changed right now so we can know we can refresh this to get the one last look so now it has changed again so again the current rate 525 to 550 basis points a little over a 99% chance of no change and then just less than 1% chance of a 25 basis point increase alright so that's what the market is expecting and they will be clued in on or they will be focusing on the announcement and the press conference what Jerome Powell has to say alright so for the rest of the week very quickly Apple reports earnings after the market closes Friday 8 30 a.m. jobs report that's the SIP October jobs report 8 30 a.m. Easter time and then there's more PMI data at 10 a.m. alright so that wraps up the news for the week now let's take a look at positional analysis and we can see the first take a look at the levels in play for today so again this is the ES futures and book map and I'm gonna take a look at a larger time frame before I take a closer look at that chart so this is the SIP 500 SPX index in a 30-day one-hour chart let me point out the key turning points this is the jobs report for September that was October 6 gamma squeeze that eventually rolled over due to Treasury yields and geopolitical events this was the October 20th very negative gamma put dominated put dominated expiration the expectation was for a put Vanna rally and that really did not play out again due to the Treasury yields and geopolitical events and then this is the rally that began on Monday and that was really that's where the put Vanna rally came in with a let's go back and take a look at the VIX chart now so this is Friday and then the rally began with a gap up on Monday so let's go take a look at VIX now back to our VIX chart let's zoom in so this is Friday traders were buying puts loading up on puts concerned about weekend risk and then that drop in VIX began and has really continued until about 11 a.m. this morning and then traders could be positioning that doing final positioning before the FOMC announcement so that was what was driving the rally starting on Monday put Vanna rally as price increases implied volatility drops when market makers are when traders along puts market makers are short puts those puts start to lose value their delta notional decreases and they can buy back short futures and that that drop in VIX is definitely a head tailwind for equities helping to drive price higher since Monday alright so the let me point out some levels on this chart first of all the dash purple lines and you really can't see it here it's right at 4200 the upper that weekly expected move right at 4200 and the lower weekly expected move down below at 4037 so that is the weekly expected move that's based on the options market right now SBX is trading above the upper weekly expected move then the dash blue lines are showing the lower and upper daily expected move that happened to be the resistance for today so far that's where the rally stopped as VIX started to rise the treasury yields started to rise again and price found resistance at that level what will take a little closer look in just a moment let me point out the spot gamma levels on this chart these are proprietary spot gamma levels based on gamma weighted open interest available to spot gamma subscribers very important in my analysis I'm going to point out the key daily levels first of all here's the 4000 level that's the absolute gamma strike that's a strike with the largest absolute positive and negative gamma so that's where the most gamma weighted open interest is concentrated the next level up is 4200 that's the volatility trigger that a spot gamma's proprietary gamma flip level below that level market makers position on the gamma curve is negative in a negative gamma environment they have to trade with price to hedge their delta exposure and that tends to enhance or increase volatility on the other hand above that level like SBX is trading now market makers position on the gamma curve is positive in a positive gamma environment market makers have to trade against price to hedge their delta exposure and that tends to decrease or subdue volatility and note that volatility trigger has been dropping lower for the last couple of days and it did drop lower from yesterday to today all right the next level up when I forgot to mention the put wall a very important level at 4100 that's the strike with the largest net negative gamma that can be expected to act as support and it definitely acted as support last Friday SPX closed just above the put wall on Friday last Friday very important level definitely has been in play and then finally the call wall oops I should have done that let me so absolute gamma strike put wall at 4100 volatility trigger at 4200 and then the call wall at 4400 the call wall to strike with the largest net positive gamma that can be expected to act as resistance and note that level did drop from yesterday so the call wall has been steadily dropping for the last three days from 4800 to 4600 to 4500 to today 4400 still out of play but that call wall the potential ceiling for price has been moving lower and the put wall has held steady at 4100 all right so those are the key daily levels let's take a closer look at the SPX for today to see the levels in play so here's SPX for today in this right portion of the curve the chart in the dark dark area just to the right I wanted to show this is the rally that began on Monday this is Tuesday and this is today so far resistance today at the upper daily expected move just below it the upper daily expected move is forty two thirty point eight and SPX reverse lower just about one and a half points below that level all right let's take a look at book map now all right book map I have my own cloud notes so I'm showing SPX levels there's the 4200 volatility trigger I'm also showing spy levels so spy here's that 417 volatility trigger that I pointed out before that was again a key key level yesterday acting as resistance then support and today is kind of a launching point for the rally higher after the 8 30 a.m. news the rally continued up until we up until the it reached the upper daily expected move for SPX and at that point we'll see in just a moment when we take a look at options trades that options traders started taking negative delta positions as price was approaching that level and we can also see the shift in order flow a lot of aggressive sellers coming in as well as the all this liquidity in the heat map limits sell orders up at that level from spy 422 below so again I have SPX levels on this chart spy levels spot gamma levels are with white background red text white lines this is the upper daily expected move for ES it's a little bit different then SPX I put more weight on SPX all right so let's take a look at NASDAQ now got about 10 minutes left before the announcement give me just a moment here I'm gonna open up CN CNBC on another computer so I can watch the news all right so NASDAQ let's talk about levels again the launching point for the move higher the 350 level volatility trigger that's also the absolute gamma strike for QQQ all right so speaking of QQQ let's take a look at a QQQ chart there's that 350 level volatility trigger absolute gamma strike launching point for the move higher and then resistance around the 355 level now the QQQ consolidating waiting for the announcement traders waiting for the announcement all right let's take a look at NDX then we'll go to the QQQ chart so really the only NDX level in play for today is the volatility trigger 14 525 all right shifts in levels I let me cover the SB 500 I forgot to wrap that up so for SPX 4200 is the volatility trigger that did shift lower the call wall also shifted lower and for spy the call wall also shifted lower to kind of an odd number at 423 and the absolute gamma strike shifted higher to 420 so that shift higher in the absolute gamma strike for spy is bullish right for the NASDAQ there were no shifts in levels for QQQ or NDX all stayed the same from yesterday all right so again in Q futures launching point 350 finding resistance just below the QQQ 355 level and the NQ 650 level and note that earlier today the NQ did trade above its upper daily expected move so just like the SMB 500 ES I have my own cloud notes so I can show in the X levels there's the 14,525 volatility trigger there's the 350 QQQ 350 volatility trigger absolute gamma strike then I also have the big round numbers the zeros and fifties for NQ so right now NQ trading just below its upper daily expected move and above its upper weekly expected move let's take a look at gamma notional to see how market makers were positioned on the gamma curve at the beginning of the day this is gamma notional for SPX spy NDX QQQ rut and IWM right note all of these numbers are negative the numbers that I look at I really don't look at NDX it's not significant so focus on SPX and spy for the SMB 500 both negative but less negative than yesterday so this means that in a negative gamma environment traders along puts market makers are short puts and they have to trade with price to hedge their delta exposure QQQ also negative less negative than yesterday and then also for the Russell 2000 both still negative but less negative than yesterday so let's take a quick look and see what that means this is the Vana model for SPX what this chart is showing is market makers delta notional delta exposure on the vertical axis and price on the horizontal axis there are two curves on this chart the first the light gray curve that shows how market makers delta notional changes with changes in price only and the purple curve adds implied volatility to the equation that shows how market makers delta notional changes with changes in price and implied volatility and that change in delta with a change in applied volatility is the Vana effect all right let's take a look at some prices now so first of all SPX low of the day right around 41.98 so pretty close to the bottom of the curve here so but there was a slight van a tailwind this morning we know that VIX was dropping and also as VIX was dropping price increasing market makers delta notional is decreasing so price increasing delta notional decreasing market makers could buy back short futures so that helps to somewhat fuel the rally higher alright let's take a look and see what I'm gonna go ahead and and skip over spy and QQQ similar charts let's see what options traders have been doing today so I'm gonna go to the hero signal this is hedging impact real-time options it's available from spot gamma more spot gamma subscribers what this chart is showing is the hero signal hedging impact real-time options and price for SPX this is showing the hero signal is showing options trades and hedging impact for a combined signal for SPX spy XSP and ES futures let's zoom in on this chart so we know in the morning that that news came out at 8 30 a.m. Eastern time VIX was dropping Treasury yields dropping price launched at 8 30 a.m. Eastern time took a while for the options traders to start participating started around 945 950 something like that right the more clear setup really was the short at as price moved up toward the SPX upper daily expected move as price was moving higher options traders started taking negative delta positions all right let's just see what they and then they started to turn that around around 12 30 so far price not responding so let's just see take a closer look slice and dice this see what traders are doing the rising orange line shows that traders are buying calls today that notional value is 3.2 billion they're also buying puts this very typical of a of an index it looks like that activity pretty much stopped right around 12 20 leveled off notional value minus 1.86 billion so they have stopped buying puts continue to buy calls and separate this let's go back alright so net for the day this notional value is positive alright let's take a quick look at NASDAQ so much much stronger correlation to price today traders taking positive delta positions this is a combined signal for NDX QQQ all right let's go back let's go to book map now we've got got about 30 seconds before the announcement go back to ES again remember the expectation is for the FOMC to hold rate steady no increase no decrease okay 2 p.m. the announcement is out usually there are multiple reactions up and down often the the first reaction is not the not the correct reaction not the final reaction so so far slightly bullish let me just check something here all right so the interest rate decision unchanged unchanged as expected so now the algos will be parsing the announcement for any changes zoom in on this a bit let's see what options traders are doing go back to hero I'm going to change the look back period so let's go to a shorter look back period so we're just looking at the last 30 minutes of data so so far a bullish reaction from options traders price moving the opposite direction back to book map all right so rates unchanged algos parsing the statement let's go back and check on options traders still taking positive delta positions buying calls continuing to buy calls let's take a quick look at VIX all right VIX starting to drop let's just change the time frame on this take a closer look at what VIX is doing go back to a one-minute chart all right so it looks so like so far that this 4210 level this is spx 4210 note is resistance in the spot gamma am founders note acted as resistance for the initial move now this could go on for for quite a while up and down until the the final move is resolved so right now yes trading right around this spy 420 absolute gamma strike that is the new absolute gamma strike and Zula sorry I missed your good afternoon before so good afternoon do you welcome glad you're here let's go back and check in here with heroes see what options traders are doing so since about 145 hero continues to trend higher let's check a couple of other symbols let's check Nasdaq somewhat flat let's see what they're doing in the magnificent seven so this is a combined signal combining the hero signals for these seven stocks Apple Amazon Google Meta Microsoft Nvidia Tesla great new hero indicator from spot gamma so it looks like traders are taking positive delta positions that started a few minutes before the announcement back to the SB 500 also continues to move higher let's go back to book map let's take a look at Nasdaq alright so I'm reading some of the headlines on CNBC tighter financial and credit conditions may weigh on economy of course the rates unchanged pretty subdued or muted reaction so far Nasdaq starting to move lower SB 500 stuck around the 420 absolute gamma strike the Fed decision was unanimous Fed still determining the extent of additional policy firming so still data dependent committee remains highly attentive to inflation risk all right you guys let me know what you want to do do you want to continue to watch this this is pretty muted reaction or we can take a look at some stocks I'm inclined to take a look at some stocks so that's what I'm gonna do unless anyone objects all right so let's take a look at what I wanted to do from this morning was let's go back to hero yeah of course gray I'll come back to the ES so let's take a look at some stocks and what I did this morning is I ranked bullish day I ranked my hero watch list by hero signal from strongest to weakest so that's this right here and here is these are ES futures for example this is the hero signal the slider that show it the extent of the slider that's showing the strength of the hero signal by the dot the dot is the strength of the hero signal today comparing it with the last 30 days that's the entire length of the slider and then the colored portion showing the last five days so this is showing just for example for ES futures that the hero signal at the time I ranked this was the strongest that has been in the last five days and last 30 days so what I did I ranked that by hero signal then I started with stocks the first one on the list Nvidia zoom in on Nvidia very strong correlation between hedging flow and price action today let's just separate I'm gonna go back to the one-day signal so Nvidia traders were buying calls and selling puts shown by the rising orange line rising blue line taking positive delta positions note the flow alert no gamma levels no spot gamma levels in play and this is pretty typical pattern in fact a very typical pattern is in the morning up until somewhere between 11 and maybe 1 1 p.m. options traders put their foot on the gas again in this case buying calls selling puts and activity stops and price consolidates or moves lower very typical pattern strong options activity in the morning then levels off and price responds let's go take a look at book map go to Nvidia and no movement there in the SMB 500 so there's the the move higher and Nvidia this morning finally finds resistance buyer exhaustion at the 420 level that liquidity at that level the heat map is showing rest at limit orders in the order book we toned down the heat map just a little bit I mean the volume dots just a little bit and then the aggressive sellers start to come in you can see by the magenta volume dots sorry about that magenta volume dots volume dots are showing market buy minus sell green dot showing more buyers than sellers magenta dot showing more sellers than buyers so nice strong rally for Nvidia this morning traders again selling puts and buying calls let's go to Microsoft it was and then let's go back to the hero list and actually AMD is higher up on the list now I just go to Microsoft very similar pattern in this case here's the call wall 345 call wall and that Act options activity leveled off right around that level Microsoft did overshoot that level here's the call worldwide here that line may be difficult to see that light blue line but options traders started to take started to take their foot off the gas there's still slightly taking positive delta positions but as price moved up to that 345 call wall they eased off let's see what they're doing so mainly buying calls today call buyers driving price higher and Microsoft when traders buy calls market makers sell the calls and they have to buy stock to hedge their delta exposure remember more market makers always want to remain delta neutral right so that's Microsoft another bullish setup with the typical pattern of the consolidation leveling off between 11 and 1 something like that right the next was AMD that was actually now on the list ahead of Microsoft remember AMD reported earnings after the close yesterday the initial reaction was bearish but then today Microsoft AMD started to rally note the spike gamma levels here's the 100 key gamma strike acting as support 105 call wall and right now AMD trading above that level let's see what traders are doing so in AMD they are selling puts and buying calls shown by the rising blue line rising orange line let's go take a look book map AMD here's the 105 call wall the 105 call wall in the 100 key gamma strike and AMD continues to grind higher alright those are the stocks that I wanted to take a look at this morning if anyone has any other stocks they want me to take a look at I'll be glad to do that let's go back and check on the SB 500 now trading slightly below that 420 absolute gamma strike very muted reaction so far to the announcement so really not much new information let's take a look at NASDAQ right now NASDAQ making a series of lower highs let's check on options traders and remember I'll work on the full one-day look back period traders continue to take positive delta positions take a look at the NASDAQ signal let's take a look at QQQ pretty similar to the total signal for NASDAQ really the the hero signal for the NASDAQ has leveled off since about 1030 let's take a look in the magnificent seven similar picture leveled off around 11 a.m. we'll see what traders are doing in Apple options remember Apple reports earnings after the market closes and they're taking negative delta positions in Apple today but pretty small notion of value they're selling calls and also selling puts the orange line notional value negative and net for the day the blue line is positive so they are selling puts selling calls so selling premium ahead of the earnings tomorrow earnings report tomorrow all right so options traders right now have leveled off let's go back to book map there's NASDAQ let's go to the ES back to the 420 level looks like some larger traders are coming in now with iceberg orders that shown by this icon here also the rising light blue line iceberg orders are what large traders use to hide their size I think this is the most muted reaction that I have seen after an FOMC announcement in quite a while so it looks like everything came in according to expectations certainly the Fed leaving rates unchanged so the move going forward will be dependent on the press conference at 2 30 p.m. Easter time and that's what I that's when I will stop my webinar at 2 30 back to NASDAQ more the same let's take a look at Tesla Tesla's really been beat up lately so Tesla consolidating right around the just above the 200 level let's see what options traders have been doing in Tesla pretty choppy in Tesla up and down 200 is the key gamma strike in the hedgewall for Tesla right RT RT ask our spot gamma level set after market close or doesn't get updated for the days active activity first thing in the morning before market open alright so the spot gamma levels are based on gamma-weighted open interest and spot gamma provides provide applies their own algorithms to that information so that is based on open interest that comes out once once a day sometime during the night so spot gamma subscribers need to wait until the morning to see the new spot gamma levels but they do not change during the day so the spot gamma levels by the time I sit down on my computer and I'm ready to start my preparation for the day they're available and in a couple of different points and you know certainly I look at this this is the AM founders note with often always a very good narrative want to expect what has changed what was important what happened yesterday as well as the levels so these levels are available in the morning let's see when this AM founders note came out 740 a.m. so typically again when I sit down anywhere from 8 to 8 30 a.m. Eastern time to begin my preparation that information is available it does not change during the day certainly open interest does change during the day but it is only updated once daily and spot gamma uses that information overnight to show these levels in the morning alright RT RT ask is call wall put wall hedge walls for today will they be different at market open for for stocks well the each instrument has its own level so this is showing form in the spot game spot gamma AM founders note the SB 500 NASDAQ and Russell 2000 it's showing those spot gamma levels and all this other information the information for stocks that's also available here in equity hub oops so if I wanted to see the spot gamma levels for Tesla for example here they are those are the key daily levels for Tesla for today I can also see the history of the levels how they've changed for the last 10 days so what this is showing is the levels have held steady for at least the last couple days he gamma strike at 200 so those are all the key daily levels that have held steady for Tesla and these may or may not change until tomorrow they may or may not change alright so Tesla the put wall is at 195 and will know tomorrow where the put wall is alright traders contain continue to take your welcome RT RT you're welcome OB says thanks Doug for the stream over your welcome as well traders continue to take positive delta positions in the SB 500 let's go back to book map alright so just a reminder for RT RT RT and everyone else the data that I look at in my preparation all that spot gamma data is static it changes once a day it's updated early in the warning available for for your preparation of the warning and then the information I'm looking at a book map and in spot gamma hero is real-time data real-time motor flow and book map and real-time market maker hedging flow and spot gamma hero so that's exactly what I talk about in my introduction two parts to my analysis positional analysis based on static data and then the execution part based on real-time data alright I'm going to wrap it up I want to thank everyone for watching thank you for your questions and comments and I'll let everyone get ready for the for the press conference that begins in in about 30 seconds so thank you very much for watching thanks for your questions and comments and I will see you tomorrow we'll take a look at the aftermath of the press conference tomorrow thanks again bye