 Hello everyone, welcome to Options with Doug. Streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern Time. Before I 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 to develop a thesis regarding the expected trading range and volatility for the day as well as a directional bias. And the second step in my process is execution. And I look at real-time order flow in Bookmap and real-time market maker hedging flow and spot gamma hero to confirm my thesis and for setups for entries and exits. And just to be clear, when I talk about setups, I'm going to be talking about an underlying, whether it's futures, ES futures, or stock, Tesla, or Nvidia. I'm talking about the underlying, but you can trade shares or futures or options with these setups that I'm talking about. And also, just to differentiate this from other forms of analysis, this is something new. I think it provides a significant edge compared with, and you might pair it with, technical analysis or fundamental analysis. But this is what I use, positional analysis. And questions and comments are welcome. And I'll be watching the options-dug chat channel and discord as well as the chat and YouTube for your questions and comments. All right, let's get started. JEC says, discord, YouTube, audio, check, good. Thank you very much. Thanks for the confirmation. All right, let's get started. Welcome to the Calm Before the Storm. Today, what I want to talk about, I go over news items, economic data and events coming out for the rest of the week. And you'll see why I'm calling it the Calm Before the Storm. And then I'll go through my positional analysis and then finally look at some setups. All right, let's start with the news items. And I went over this yesterday. The news items tomorrow again. The news items, first of all, the CPI comes out at 8.30 a.m. Eastern time tomorrow. And that's typically been a very important economic data release. The market has moved pretty significantly in the past, recently, not as much. And there certainly is not the put-van-a-fuel that was available on the market last year to really fuel a rally. Right now, the markets in disease, SPI or on a positive gammon firm, and I'll talk more about that. And then at 2 p.m. tomorrow, the FOMC announced minutes are released. And these are typically released three weeks after the FOMC meeting. So tomorrow, big day CPI report at 8.30 a.m. Eastern time, and then the FOMC minutes at 2 p.m. Eastern time. And then Thursday, the PPI comes out at 8.30 a.m. Eastern time. And then finally on Friday, retail sales at 8.30 a.m. Eastern time and Michigan consumer sentiment at 10 a.m. Okay, so that's the news items coming up for the rest of the week. So tomorrow should be an interesting day. And I will be, the FOMC meeting minutes will be released at 2 p.m. And that is a half an hour after the start of my webinar. All right, let's take a look at charts. Start with the positional analysis. And this is the S&P 500 futures, ES. And before I go into this chart in more detail, I want to take a look at a larger time frame. I'm going to start with SPX on a 20-day one-hour chart. And this is just showing price and key spot gamma levels, gamma levels, that are provided to spot gamma subscribers for a variety of platforms. And here they're shown on Thinkorswim. And let me just point out several of the key daily levels. Here's the put wall at SPX 3800. And that is the strike with the largest net negative gamma that can be expected to act as support. Here's the 4000 level. And that is the key gamma strike or the absolute gamma strike. That's the strike with the largest absolute gamma. And then here's the volatility trigger at 4070. And the zero gamma level just above that at 4081. And the volatility trigger is spot gamma's proprietary gamma flip level. Below that level, that indicates that market makers position on the gamma curve is negative. And they have to trade with price to hedge their delta exposure. And that tends to increase volatility in a negative gamma environment. And then above that level, like SPX is trading now, that is a positive market makers positive gamma environment. Market makers position on the gamma curve is positive. And that indicates that they have to trade futures against price to hedge their delta exposure. And that tends to subdue volatility. And that's typical of a positive gamma environment. And then finally, here's the 4200 level. That's the call wall. And that can be expected to act as resistance. That's a strike with a largest net positive gamma. So the ceiling is at 4200. And the floor is down at 3800. And then the other levels, again, the key levels are the volatility trigger and the absolute gamma strike or the key gamma strike. So those are the primary key daily levels for SPX. And let's see what's in play for today. We can look at a shorter time frame chart again in thinkorswim showing this is a one day, one hour chart, one minute chart for SPX just showing price and again the levels. And you can see what a narrow range SPX is trading in today. And this is to be expected ahead of such a big day tomorrow with the CPI release and the FOMC minutes. General uptrend. No key SPX levels are in play. We'll see that the SPI 410 key gamma strike has been in play when we look at book map here. So the same levels are shown on this chart. And spot gamma provides notes for book map as well in the form of cloud notes. These are shown in this column and you can see there are no SPX levels that are in play in the range trading range for today or none that they're noting in the in the cloud notes. I did note this 410 level that was noted as a pivot. And what spike gamma was used looking for today was mean reversion back to this level between the 410 level and the SPI 410 key gamma strike. And this again is the SPI 410 key gamma strike. And that has been a pivotal or key level today. And you can see that it is acted as resistance multiple times earlier today, making for good short setups. And now as prices moved up above that level, acting as support. And here both VWAP and the SPI 410 level have acted as support. And it looks like the next target up in play is the ES 4150 level. And these are all noted in my cloud notes. So again, very narrow trading range. The levels that are in play is the SPX 410 level, especially the SPI, the SPX 4110 level, the SPI 410 key gamma strike level, and then up above the target at ES 4150. There were very, very few shifts in levels from yesterday to today. First of all, the volatility trigger for SPX did move up slightly from 40.55 yesterday to 40.70. And the QQQ volatility trigger also moved up slightly from 315 to 317. So for the indices SPX, SPI and QQQ, that was it. No shifts in the put wall, call wall or key gamma strike levels for those indices. All right, let's take a look now at the gamma levels. And we'll see where these levels come from. And there's a question in discord this morning about these levels. And let me just point out that the levels are provided to SPOT gamma subscribers in a variety of locations on the website. And here, for example, for SPX, SPI, NDX, QQQ, RUT, and IWM, they're the these key daily levels that I mentioned before. And they're spelled out, or, you know, the values are provided here. What I'm going to do now is look at the source of that information. And this is the absolute gamma levels. I'm going to start with SPX. So there's the 4000 key gamma strike or absolute gamma strike. That's a strike with the largest absolute gamma. That's pretty obvious. Above the zero line, positive gamma or call gamma is shown with the orange bars. And below the zero line, that is negative gamma or put gamma shown with the blue bars. So there's the 4000 absolute gamma strike. That strike can be expected to act as support, resistance or a magnet for price. Here's the 3800 put wall over on the far left edge of the screen, the strike with the largest net negative gamma. And then the here's the 4200 level, 4200 level, the call wall, the strike with the largest net positive gamma that could be expected to act as resistance. So again, the floor is at 3800 and the ceiling right now is at 4200 for SPX. And note, there is significant gamma at both 4100 and 4150. All right, so that's SPX. Let's take a look at SPI. I'm going to zoom in on this a little bit. All right, for SPI, again, these key daily levels did not change from yesterday. Here's the 410 key gamma strike. And then the 400 put wall, that's pretty obvious. The strike with the largest net negative gamma. And then the 420 call wall. And there's also significant gamma at the 415 level. Right, usually I have to do a refresh before I look at QQQ. So let's go ahead and do that. Go to QQQ. So this is what I look at for the NASDAQ. The NDX options in NDX are not significant. So I just look at QQQ for the NASDAQ. And then here is the 320 key gamma strike. And that is also the call wall. And then here's the put wall at 300. So that is those are the major index products that I look at SPX, SPI and QQQ. And while I'm on this page, I want to take a look at one other thing. And this is the Vana model. And this will illustrate how market makers are expected to react in a positive gamma environment and a negative gamma environment. And what this is showing is market makers delta notional or delta exposure on this vertical axis and strike price on the horizontal axis. There are two curves shown here. And the first is the slight gray. And this is showing how market makers delta changes with changes in price only, not considering any changes that applied volatility. And what this is showing is as price increases, their delta exposure increases, and they have to sell futures to hedge their delta exposure. And again, remember, this is for SPX. And then this pink curve is showing the effect of changes in implied volatility. And that's the Vana effect, the change in delta with the change in implied volatility. And what this is showing is there's not much difference in the delta exposure as price increases with accounting for implied volatility or not. And so that's indicating, again, what I mentioned before, there's not going to be much of a put Vana effect or change in implied volatility is not really going to help a rally move higher. And then a negative gamma environment it would. And then just on the other hand, this pink curve is showing as price decreases and implied volatility increases. Market makers delta notional will increase and they'll have to sell futures to hedge their delta exposure. And that is as the market shifts to a negative gamma environment. But right now, all the indices are in a positive gamma environment, indicating that market makers have to sell futures as price increases to hedge their delta exposure. And then they will have can buy futures as price decreases to hedge their delta exposure. So that's the the environment that the market is in right now. We can just take a quick look at spy. It's going to be similar. Just a little bit steeper on the downside. And then QQQ, pretty similar to SPX. And let's just take a look at the numbers behind that. And this is showing market makers gamma notional. This is from the spot gamma am founders note. And note all these numbers for SPX, SPI and NDX try that didn't help. So for SPX, SPI, NDX and QQQ, all the numbers are positive. Market makers position on the gamma curve is positive. And again, indicating they have to trade against price to hedge their delta exposure, tending to subdue volatility in a positive gamma environment. And these levels did shift slightly from yesterday. Spy, SPX became more positive. Spy remain the same. And then QQQ became slightly more positive. Alright, so that is most of the planning preparation that I do for the index products, SPX by QQQ. And now let's take a look at a starting point for planning for equities. This is my key gamma strike list. These are all the stocks in my watch list. And I tracked the key gamma strike from the previous day and the current day. The key gamma strike from yesterday is shown in the E column, the far right column. And the current key gamma strike is shown in the D column. That's for today. And I compare the numbers and I color coded for just a quick visual reference. And here this is showing that the key gamma strike for AMD increased from the previous day. I interpret that as bullish. Traders are positioning themselves in the options market for higher prices. They're accepting higher prices. And then on the other hand, for Microsoft, this is showing a drop in the key gamma strike from the previous day. And I interpret that as bearish. But overall, somewhat of a slightly bullish picture. Alright, let's take a look at some setups now. And let's start with the S&P 500. And just as a note here, this is just a starting point for research for these individual equities. So let's say this AMD, you wanted to do further research on AMD and see how the other daily levels changed. I usually just go into equity hub here. And you can see in this history, the key gamma strike did increase. But there were no changes in the other levels. So the floor remains the same at 90. The put wall ceiling remains the same at 100. And again, the only level that changed was the key gamma strike. Alright, let's take a look at setups now. And I'm going to start with the S&P 500. So now this is the I've gone over the planning process. And now I'm starting with the execution process. And my expectation for today was was limited because of the data coming out tomorrow. My expectations for today for trading range were pretty low. So here I'm starting with the hero signal for the S&P 500. And this is showing a combined signal of SPX and spy options trades. For those of you may not be familiar with this chart, price is shown with a white line here. And this is from the cash open at around 930. That's price for the S&P 500. And then the hero signal is shown with this blue line. And that's showing options trades again for SPX and spy calls and puts and market maker hedging activity. That's the hero signal hedging impact of real time options. So this morning I mentioned let's I'm going to zoom in just on the morning session here. And there really wasn't much of a divergent signal, more of a confirmation in the morning. And remember, I mentioned the shorts at the 410 level. So really just looking at and hero to confirm the signal, the reversal and watching order flow and in book map. And just realizing that 410 level was acting as resistance led to those setups. So let's go take a look at look at book map now. I'm going to zoom in just on the morning session and order flow was not really bullish or bearish, just trading at a range. But you know, the key was to notice that this 410 level was acting as resistance. Price made a series of lower highs and then tested the 410 level again. And note, there was some some bearish order flow. You can see the these following lines in the sub chart. The light blue line is iceberg orders. So large traders were selling with their iceberg orders. They used to hide their size, sell stops, helping to fuel the move lower. And then also CVD, this pink line was falling. And here's an indication of the iceberg orders selling sell stops. And then a target down here at the 4130 liquidity level. So that was the first short set up. And here was the second at 410. And note the shift in order flow. Green dots, market buy orders moving up to the 410 level. And then order flow shifts bearish. Note the pink dots, these are market buy orders moving up. And the reversal market sell orders moving down for four or five points in ES. And in YouTube, Truman says Tesla is really very hard to trade today. I agree completely. We'll look at Tesla in a minute. A very choppy in the morning flat VWAP. Not much to see there in the morning. Let's now want to focus on the afternoon here. Let's go back to hero. And this was a confirmation of a long set up starting about 1230 1240. Usually there are more divergence setups in the S&P 500. This was hero falling down price moves down and around 1235 1240. Hero starts to tick up and price moves up. And if you miss that initial entry, here was a this was a divergence long set up. Notice hero makes a higher high right here. Price moves down as hero continues to move up, setting up along. So let's take a look at 1235 and 115. Go back to book map. And so here's the long I mentioned this one before the long entry the long set up 1235 1240. Test of VWAP. And then now this 410 key gamma strike spy 410 key gamma strike becomes support. Price is heading up to the 4150 ES 4150 level. And here's that pullback. And notice the notice the buy iceberg order there. And these are small numbers. This is again calm before the storm pretty low volume, pretty low number. But that is a buy our iceberg order for two 200 contracts. Right at 115. Let's go back. Take a look at hero again. And here's the long set up right here. There was the first one the reversal at VWAP and the spy 410 key gamma strike. And then the divergence reversal. And again, what I'm looking at wrong tool hero makes a higher high. And then price follows. So good short kind of scalping setups in ES today. Watching order flow and hedging flow and spot gamma hero. All right, let's take a look at since Truman mentioned Tesla, we can take a look at that next. And SPX just like yesterday was very strong confirmation for price action. All right, let's take a look at Tesla. So SPX is opposed to spy. So here's Tesla. Really choppy price action in the morning. Yeah, this was difficult to trade. Let's take a look at book map and note the note the flat VWAP that blue line price just moving almost randomly up and down up and down around VWAP and notice how flat it is. Finally price breaks out around 11 o'clock. So I thought this was difficult to trade today. SPX spy ES S and P 500 much better so far. All right, let's take a look at some other stocks. There's Apple. Let's go take a look at hero. And for Apple, there was a strong confirmation for the short setup this morning, not a lot of range. And then confirmation long. And let's see what Apple traders were doing options traders looks like, especially in the morning, primarily call sellers that show him by this orange line here. Falling orange line indicates that traders were selling calls in the morning. And here they started buying calls and price moves higher. So that was Apple. Let's go take a look at book map again. Again, not a lot of range about a point and a half. Trending below VWAP price chops around and now starting to move higher is options traders taking positive delta positions. Here's AMD. Little bit more range in AMD today. Note the 94 hedge wall in play. Also interesting as all the liquidity above. There are a lot of sellers up above. This could attract price. Let's go see what options traders are doing. So here's AMD. So initially traders were selling calls. Not doing much with puts. Moving price lower. And now they have started selling puts that show them by the rising blue line here, positive delta selling puts and have stopped selling calls. So now the put sellers are winning. Price is starting to move higher back to the total signal. So a confirmation of the short in the morning. Let's just zoom in on that. And you can see when we zoom in the strong correlation between hedging flow and price action. Alright, that's AMD. Let's take a look at Amazon. And zooming in on the morning session here. I interpreted this as a divergent short. So this is a series of large block orders, institutional orders, taking negative delta positions. Let's just see what they were doing. So here they were buying puts. And then they started selling puts. And then they were selling calls, continued to sell calls. And price continues down until they start buying calls around 1015, 1020. Let's go take a look at book map. And there was a very a couple of obvious price targets. First of all, at the 100 level, that's the key gamma strike. And then also at the 99 hedgewall, both are high liquidity levels, acting as magnets for price. So a good short setup there in Amazon. Let's go back and take a look at hero. Go back to the total signal. So the combination of falling hero line with the key gamma strike down below in the hedgewall and all the liquidity at those two levels made for a good short set up in Amazon. Right. The next is Google. And note I have switched from the symbol Google, G O O G to Google, G O G G L. It seems to be there's a little bit more volume now trading in Google L, Google versus Google. And also there's it seems to be a stronger correlation between hedging flow and Google versus hedging flow and Google. So maybe JC can confirm that I think he trades Google on a regular basis. Let's just take a closer look at this. Now I have Google on my other computer. And if we have time at the end, I'll go take a look at that. So right now we'll just take a look at hero. And I thought this made for a nice divergent setup. In the morning, falling hero and price reverses all around the one just below the 107 level 10675. So that was a divergent short in the morning and divergence long as price reached down just below the 105 level hero starts to rise price follows not a lot of range today. So that's Google. Here's I W M I've got this on my other computer as well. And I saw it bought this set up a short in the morning hero making a series of lower highs and then price fun finally follows and then not much in the afternoon not not a lot of impact from options trades or around 1050 1045 1050 as price increases and hero stays flat. So more of an influence of options trades in the morning. Nothing yet in the afternoon. I didn't see much in meta choppy day a little bit hard to read Microsoft a good good downtrend of Microsoft in the morning. Not much help from options trades with hero here. And let's take a look at Nvidia. Alright and YouTube JEC says Google he looks for divergence setups and Google with an L looks for convergence setups. Alright he had no insight in meta either just all over the place. So I'm looking I'm looking for the easiest setups possible something that's very clear a lot of a lot of confirmation like here and Nvidia. Let's zoom in on the morning session and it took a while for options traders to to get going here. Let's take a take a look at calls and puts and note they started started selling calls just after the open price was already dropping continued selling calls. So here was a good short setup. Oh just after 10 let's take a look at book map. Go to Nvidia and there's that short setup. Quick drop. Pretty hard to read not a not a strong confirmation with hero and told us about a two-point pullback up to VWAP and the 275 liquidity level. That was good for a three-point drop down to the 272 272 hedgewall level and now price has can is just consolidating really and you can see the volume concentrated for today between the 272 and 274 level as price consolidates in that level. So this was the what I thought was the primary setup for Nvidia today the short at 275 and the VWAP down to 272. Alright let's take a look at snowflake now and it took a little while for this to to play out. Let's go take a look at hero look at snowflake and note the chop in the morning this is pretty similar to what Nvidia normally does in the morning for the first 30 45 minutes chops around then finally starts to resolve lower as traders take negative delta oops wrong tool traders take negative delta positions and let's just see what they were doing primarily calls driving here so you can see as they start to sell calls right around 1010 price starts to move lower let's go back and take a look at book map so there's that reversal lower price finally breaks below VWAP water flow shifts bearish note all the pink dots market sell orders coming in CVD was already bearish and starts to slope down even more no gamma levels and play for today but that was good for a four point move more lower in a hundred and forty dollar stock so good move lower there in snowflake right let's take a look at we'll take a look at spy let's just see what the S&P 500 is doing and this is essentially the same thing as the ES just the ETF version showing again here's the 410 key gamma strike acting as resistance in the morning and then support and price is moving up toward the spy 411 level and also the ES 4150 let's see what Tesla is doing now see if there any setups in Tesla and no heroes ticking lower looks like prices following see if there any key levels that are in play so just a trend break here and absorption there at the 18850 level I usually point this out every day I am presenting on one screen but I don't have to jump back and forth I have two screens that I'm looking at and I'm looking at book map on one screen and hero on another screen so I don't I can look at both at the same time I don't have to jump back and forth like I do for this presentation let's just go take a look at hero again so that's looking like a short setup so traders stopped buying calls price started moving lower and at the same time now they're buying puts let's take a look at the total signal so so far for today this signal is negative this notional value minus not right now 58 58 million is is negative let's see there's one other stock that I want to mention today and I can go to these trending stocks let's see if it's in here I don't see it in here now one one stock that was moving pretty well on the morning coin base and it coin base moved up nice strong uptrend in the morning traders were buying calls that's shown by the rising orange line and when traders buy calls market makers sell the calls they have to buy stock to hedge their delta exposure and then helps to move a stock higher and Bitcoin has been been rallying ethernet crypto has been rallying so coin base often trades in sync with cryptocurrencies as can be expected and notice as the options trades level off so does price so strong rally in the morning so about three four-point rally and coin base this morning let's go back and take a look at Tesla so it looks like that short is not playing out options traders are starting to take positive delta positions again and let's wrap it up let's take a look at the s&p 500 and so far the rally that started about 1240 is continuing let's go take a look at book map back to the s&p 500 and now it looks like prices slowing down struggling as it approaches the 4150 level and I would certainly look for a stop run to carry it up into 4150 right any questions any any questions comments okay I think I'm gonna wrap it up today a pretty quiet day a few good setups and JC my ES SPX difference I got was 27 points same as yesterday it looks like it varied a little bit between 26 and a half and 27 just like yesterday so I just used 27 just keep it a keep it around number so that's what I got this morning and I rechecked my ES spy ratio I updated that this morning so this spy level at f4 10 is pretty close all right that's it I think I'm going to wrap it up again remember data tomorrow 8 30 a.m. Eastern Time and then FOMC minutes during my webinar tomorrow all right thank you everyone there's the stop run up into the 4150 level as expected and again thanks again I will see you tomorrow bye