 Hello everyone welcome to options with Doug streaming live daily on book map discord and the book map YouTube channel at 1 30 p.m. Eastern time before I go any further I need to go through the disclosures general disclosure all book map limited materials information and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations risk disclosure trading futures equities and options involve substantial risk of loss and is not suitable for all investors past performance is not necessarily indicative of future results and hold on just a moment I need to adjust my my stream on on YouTube okay that's better I had to manual set it to 720p okay as a reminder the focus of my presentation and the focus of the options with Doug chat channel and 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 have a two-step process for trading versus planning and I use positional analysis I look to see how traders and market makers are positioned in the options market and how those positions changed from day to day to help develop a thesis regarding volatility and expected trading range for the day as well as directional bias and the second step of my process is real-time order flow I look at real-time order flow in book map and real-time market maker hedging flow and spot gamma hero to confirm my thesis and for setups both entries and exits and I think this two-step process with positional analysis and real-time order flow and market maker hedging flow is a new way of looking at the market and I think it provides significant edge and questions and comments are welcome and I will be watching both discord and YouTube for questions and comments and in discord please post your questions and comments in the options dash with dash Doug chat channel okay let's get started and what I want to cover today is first of all go over some news items economic data reports events and earnings and then I'll go through our positional analysis and then we'll take a look at setups and there were a lot of great setups today a lot of reversal higher setups this morning so first of all the news economic data tomorrow there are a couple of items the durable goods orders and GDP coming out at 8 30 a.m. Eastern time and then on Friday at 8 30 a.m. there's the PCE and a 10 a.m. Michigan consumer sentiment and earnings of course I think the big news today is the Microsoft earnings and let's just take a look at let's go take a quick look at book map and let's go take a look at Microsoft so Microsoft reported earnings after the close yesterday so I'm looking at yesterday and today so Microsoft reported right after the close yesterday zoomed way up and then I think well when their conference started conference call there was I guess Saatchi Nadella gave weak guidance and Microsoft drop lower gap down this morning moved all the way down to this 231 level and as Raleigh'd ever since and we'll take a look at hero and see what what traders are doing with options and that that is certainly helping to drive order flow and what again we'll take a look at hero so there is there's Microsoft big jump after the open conference call starts weak guidance and Microsoft drops lower and then it looks looks like it's just trading back up to around the 240 key gamma strike level and that was the primary target for along this morning right so that's Microsoft that was the big really the big event for today until Tesla reports earnings this afternoon so that should be certainly that will move Tesla and could be a market mover as well although Tesla does not have the same influence on the market as Microsoft and then as far as events go the next big event is the FOMC meeting next week on Tuesday and Wednesday with the announcement and press conference on Wednesday and that will be during my session next week on Wednesday okay let's let's take a look at our positional analysis now and first of all let's take a look at the spot gamma levels on some charts we bring up book map will go to the S&P 500 and while we're waiting on that I'm gonna take a look at a couple thinkorswim charts and this is a thinkorswim 20-day one-hour chart for SPX and it may be a little bit difficult to see here it's on the the far right and we'll take a look at a zoomed in level and in just a moment so this is showing all of the key levels and here's the put wall and that is actually jumped up from 3,800 yesterday here's the call wall and that is increased also and the put wall is the strike with the largest net negative gamma and can be expected to act as support and then the call wall is the strike with the largest net positive gamma and can be expected to act as resistance so what we can see here is SPX gap down lower trade it right down to the 3950 level and we'll look at that in a zoom zoomed in view in just a moment and then is traded higher okay let me take a look at questions so yes we will look at Tesla there's a question about see traders buying calls on Tesla that's one of the setups that we will look at and there's a question about be able to share this thinkorswim script and there's really no point in it it changes every day and I'm not going to share it every day this is this is available to spot gamma subscribers every day and I talked about this yesterday where to find it and and how to add it to thinkorswim so it changes every day you have to manually update it and thinkorswim every day so this is not my script this is from spot gamma so again it's available to spot gamma subscribers okay great all right so let's take a look now at a a closer view and the reason I do this this shows this is just the clean SPX levels and showing how SPX price action reacts at these levels and also how these levels have changed so that is the longer time frame view and let's go take a look now at a shorter time frame this is the two-day one-minute chart and the thing to note here is again the gap down in SPX and that 3950 and that was noted as support and the spot gamma AM founders note and it was it traded just a little bit lower but that 3950 level held as support as expected and price once it gap down went down and tested that level just after 1030 has rallied since then and this just shows the importance of these SPX levels the SPX round numbers the gamma levels and if you trade ES futures you really need to track these levels all right so let's go look at book map and what this is showing I have two columns with levels and these are the spot gamma cloud notes and these are also available to spot gamma subscribers and this is updated automatically there I don't have to do anything manually and this is showing the key SPX levels converted to an equivalent ES number right now spot gamma is still using 20 point a 20 point difference between ES and SPX and it's about 15 points now so these numbers are wrong they should be should be five points lower so I have this is my own cloud notes excuse me these are my own cloud notes and I note the support and resistance levels that were uh in the AM founders note this morning and I have shifted mine down to the correct 15 point difference so this is showing the support at the 3950 level which is equivalent to ES 3965 so there's the reversal at the just after 1030 reversal at the again the 3950 level break of this trend a lot of aggressive buyers coming in and you can see that by the green dots and also the rising cumulative volume delta line that's the dark blue so a lot of aggressive buyers coming in at that level and we'll take a look at a hero in a minute and see what options traders were doing so those are the levels in play and we've looked at a larger time frame and then zoom down and then finally looking at book map and combining those levels with the water flow so there were some shifts in levels all higher yesterday first of all the spx and spy volatility triggers both shifted higher spx is now at 4010 and spy at 40401 401 and that uh volatility trigger is the spot gamma proprietary gamma flip level with positive gamma above and negative gamma below and negative gamma means that market makers will be trading with price action to hedge their delta exposure and above the volatility trigger that would be in a positive gamma or a call gamma dominated environment and market makers would be trading against price action to hedge their delta exposure so that indicates below the volatility trigger there's going to be more volatility uh because market makers are trading with price action and above the volatility trigger less volatility because market makers will be trading against price action so there's the volatility trigger both shifted higher and also the spx put wall shifted higher from 3800 to 3900 and also the spx call shifted higher from 4050 to 4100 and for the for the nasdaq i just tracked qqq and the volatility trigger shifted higher also the put wall shifted higher as well from 260 to 280 so given that that is that's bullish the shifts in levels higher uh are bullish so let's take a look now at we'll take a look at the absolute gamma charts for uh first of all for the s and b 500 and these are the levels of of high gamma and what we're looking at here's the zero line and above that line the black lines are call gamma or positive gamma below that line the teal lines are put gamma or negative gamma so for spx here's the put wall now and remember this was uh 3800 was the put wall yesterday and that was really out of play not not in range so now the put wall again that's the strike with the largest net negative gamma uh has shifted up to 3900 and the key gamma strike or the absolute gamma strike remains at 4000 and that is the strike with the largest absolute gamma and that's pretty obvious visually obvious and now again the call wall has shifted up to the 4100 level so again the put wall call wall had both shifted higher for spx and that's bullish and spy no shifts higher in the uh levels other than the volatility trigger so the put wall remains at 390 and call wall or the key gamma strike remains at 400 and the call wall at 410 and that's pretty obvious not much put gamma at that level and a lot of call gamma and one thing to note here is the build in and call positions above the 400 level now there's still spy is still put dominated there's still plenty of put positions below 400 and we'll take a look at gamma notional in just a moment and see that that actually shifted more negative so the put down even though there were there's a build in call positions the put dominance increased in and spy so that's spx and spy let's take a look at the qqq charts so again for nasdaq all i look at is qqq and dx is is not significant so for qqq here's the put wall at 280 and that's pretty obvious the strike with the largest net negative gamma and then that is also the key gamma strike so that's also the strike with the largest absolute gamma and then the call wall up here at 295 and you can see there's a large difference a lot more call gamma than put gamma at that level so let's take a look at data now i'm going to look at gamma notional as usual so this is showing market makers position on the gamma curve for spx in the left column spy here and then qqq on the far right and gamma notional has shifted more negative uh or lower for all of these instruments so first of all yesterday spx gamma notional was 268 and it shifted down to 75 so still slightly positive but shifted down from yesterday and then spy yesterday shifted down more negative from minus 708 yesterday to minus 1254 today and then qqq was slightly positive yesterday at 45 and they shifted down now to minus 273 all right so this question and discord what is the significance with a diversion on gamma notional for spx versus spy does one dominate over the other and how do you read the difference and that's been pretty typical lately and i think the spy gamma notional dominates it's so much larger it's it's almost always look much larger than spx so again that's that's pretty typical and i i give a greater weighting to spy to the spy gamma notional let's take a look at vana models and this is a just a quick visual representation of what i was talking about so remember the gamma notional for spx is 75 and that's pretty neutral and that's what this vana model is showing so this is showing market makers delta notional on the vertical axis and how that changes with price that's on the horizontal axis and how it also changes with implied volatility and that's shown by the green line and that's the current expiration and that's the vana effect the change of delta with the change in applied volatility and then the black line shows the change in delta notional with at the next expiration or as time passes and that is the delta charm effect the change in delta with a change in time so pretty neutral for spx spy still sloping up from right to left typical in a negative gamma environment again showing market makers delta notional increases as price drops and they have to sell futures to hedge their delta exposure and they can buy back futures as price increases since their delta notional is dropping and then we'll take a look at quick quick look at qqq okay so keep that in mind then let's take one final look this is my key gamma strike spreadsheet and i track this every day and this shows in the far right column previous key gamma strike and that was for yesterday and then the current key gamma strike is for today and i color code these green indicates that the price increased from the previous day and red indicates that the price key gamma strike decreased so the thing to note here is on monday there was a lot of green so recall the big rally on friday and i think every every stock of my list almost had there was no red they're all all green all rising key gamma strikes and then that excuse me so then yesterday there were still several stocks with rising key gamma strikes and then that is slowed down today so showing more of a i guess a neutral stance so a couple stocks red with lower key gamma strikes and a couple green so all in all based on this data data alone i was looking for a higher volatility day wider trading range due to the drop in gamma notional and so looking for again a wider trading range higher volatility than yesterday and also bullish based on the rising volatility triggers for spx and spy and qqq the rising put wall and call wall for spx and then the rising volatility trigger and put wall for qqq all that is bullish so the only the only wrench in there the only thing that threw a wrench in there was the microsoft earnings which again led to a i i think led to a gap down this morning that uh you know as we'll see did not last long okay so let's take a look at some setups now and before i get into the usual uh day trading setups one thing that i want to take a look at is take a look at a longer term position that i was trying to actually trying to fill and never never got till but i'll i'll talk about my reasoning for doing that and plan to talk more uh more about that as time goes on so what i'm going to do i have um the stock that i want to look at on my other computer okay so the stock is mera and what i was looking at so i was i started looking at uh tasty works that is a that's an options trading platform that i used and looking at my universe of stocks the stocks that i look at are uh the spot gamma and the spot gamma hero list i think they're about 200 stocks and in tasty works i rank those by the uh i v rank implied volatility rank and that shows how uh the current implied volatility uh how high or low it is in relation to uh how i think in the past year maybe or maybe longer time period so in a high i v rank means that that the i v rank for that stock the i v is higher than it has been in the uh in the time period there look back time period so mera uh marathon digital holdings was at the top of that list so that was the first step i was looking to uh looking actually looking to sell a put or some sort of um longer term position like that and what i was i'll talk about the the position that i was actually trying to fill so that was my first step so i was interested in mera and let me just reset this let's take a look at mera now i'm going to this uh going to equity hub here so let me switch over and hold on just a second okay so here's mera in equity hub and this is showing the call dominance so let's take a look at the composite view call dominance above nine showing here so the the call gamma the orange line much greater than put line put gamma line that indicates that traders have been buying calls they're bullish been buying calls let's take a look at the skew chart and this what this is showing is the implied volatility for calls versus puts so this line here this is the at the money delta 50 and that is showing and what what spike gamma is showing here is the implied volatility for puts to the left of this line and implied volatility for calls above this line and the dash lines are showing the next expiration and what this line was showing yesterday or the prior day and then yesterday so this green dash line is showing there's actually increased interest in calls and then the so that's the next expiration that's the friday expiration and then this is showing the the solid lines are showing the next uh expiration about 30 days for now so there's a interest in calls traders are bullish and there's a question how does it show that calls are dominating so let's go back to the put call impact line so this orange line is showing call gamma and remember this is the market makers position so mark for stocks spot gamma assumes that traders are long puts long calls market makers are short calls short puts so this is the market makers gamma position and this indicates you know notice the the wide difference the call gamma is almost twice as we go down here almost twice the put gamma and still it dominates from pretty much this line is showing the crossover at about eight and notice also the call gamma at these strikes the orange bars much greater than the blue lines the the uh negative gamma the put gamma so call gamma a lot greater than put gamma so call dominated traders are interested in buying calls so again first of all see that the ivy is high ivy rank is high and also given this call domination the call skew traders are bullish on the stock so i was looking for a uh a dip to buy just like a lot of other people were doing today and uh you know to enter a bullish position so what i was looking to do was let me go to thinkorswim and that's for that's for microsoft let's go to mera that's an earnings play on microsoft we'll go to mera and what i was trying to do is fill this and this is a this is a tasty trade or tasty live they call themselves now uh position called a jade lizard and it's a short put and a short call spread and i was trying to get this filled and i never could get it filled this the bid ash spreads in mera were just too wide this morning and i was not able not willing to to give in more than a penny or two and i never could get filled but this is this is what i was trying to get filled so let me go back and let's take a look at book map and i'm going to go back to so here is let me just get rid of this go back to book map so i was watching it this morning and saw that that mera found support around the eight dollar level so that's where i i should have probably just tried to sell a put but anyway i was trying to fill that jade lizard never got it filled so anyway that was my reasoning and that's how i was looking to to buy the dip all right so let's uh and again i'm going to uh spend more time talking about these longer term positions so this morning i did have a a long put spread and video a longer term position and i use the drop down to it was not a very good position but i lose uh use the the dip this morning to uh we'll go out of that with a small profit so um all right so let's take a look at some setups now and let's go take a look at hero and there were a lot of good setups this morning so i'm going to go through these pretty quickly and just go in in alphabetical order and this is the the first one amd and there was a call divergent short this morning so traders were selling calls price increased a little bit higher and then moved lower as they started buying puts all right let's go take a look at book map amd so that's what i was looking at first thing in the morning and and i did post my um hero watch list and discord ranked from weakest to strongest so here was the short setup this morning absorption just below the 74 level with the 72 liquidity price target then let's go back and take a look at hero again and not really uh a lot of confirmation for the long but a good divergent setup for the short first thing in the morning all right the next amazon looks like puts are driving here so focus on the blue line so the put buyers become put sellers and that appears to be driving price action let's take a look at book map so nice reversal here oops try again get a rectangle notice all the big green dots in coming in here a retest of the 92 level and price is heading up or is headed up to the 96 hedge wall so microsoft threw a very short term uh wrench into the bull parade which continues so there's amazon let's go take a look at hero again coinbase that's on my other computer another long setup or short setup in the morning then long there's hero there it is in book map quick drop lower just like everything else and a reversal higher disney disney is on my other computer pretty much straight up from the open let's go back go back and take a look at hero there's disney so traders are buying calls from the open that's shown by the rising orange line initially they were buying puts then started selling puts there's there's a uh looks like a block trade comes in here large oops large institutional trader selling puts then both trader uh both call call and put lines rising indicating traders are buying calls and selling puts and here it is on on book map and by the way this computer that i'm looking at now on this remote screen cheer is a it's a mac it's an m1 mac mini one of the the first uh first first of the mac minis with the apple silicon and it is fast and book map works great on it i'm running the the 7.4 alpha version of book map that uh that is native m1 native and i think this is the future of computing my i my main computer is a pc i think my next main computer is going to be uh be a mac as well so this book map is faster on this 16 uh this m1 mac mini with 16 gigs of ram than it is on my pc with an amd processor and 64 gigs of ram okay so that is that's disney let's go back to hero nice strong uptrend and i'm just going through these in alphabetical order all right here's es so this is the s and p 500 futures and this combines what this is showing is a combined signal for spx and spy all right so there's some discussion and discord let me let me just take a look at youtube i haven't checked for questions either let me go see if there are any questions okay so um trader hg is asking what the heck did you just say mac mini yes it is the um m1 the original mac mini with apple apple silicon and i like it a lot and it is tiny it is about the size of a a pie and it it's fast it's stable uh it works great and apple recently introduced the m2 versions of the mac mini excuse me so and they already have the the mac uh studio as well and um that is running i think the higher higher end versions of the m1 processor so again i think this is the future of computing and my next main computer is most likely going to be a uh a mac mac mini so again they've introduced the m2 versions now so it works great again this is the uh this is a native version of bookmap native for the m1 processor and i've been running that for um so at least a month probably longer okay so this is the es this is the combined signal of spx and spy let's zoom in so initially this morning traders were buying calls shown by the rising orange line now that is leveled off some they were buying puts as well let's take a look at the total line and i think this is somewhat of a divergent setup here for the morning the recall the reversal at spx 3900 it's kind of choppy but notice hero rising price continues to drop then reverses higher at the spx 3900 level so given this rising hero and i'm sorry the 3950 level and that what again noted as support in the in the founders note so this is a kind of a classic hero divergent setup see hero rising price continuing to fall down to a an expected or anticipated support level and then price increases and recall we looked at the order flow in the bookmap chart and saw all the green dots coming in all the aggressive buyers coming in at that level so there's es let's take a look at at spy it'll look a lot like that and one thing to note is i'm going to rank these by the strongest to weakest signal and notice here what's at the top es spy and qqq the indices and these hero signals here showing that hero for these indices is the strongest that it has been in the last 30 days and that's shown by the entire range of this slider and also in the last five days and that is shown by these dots all being outside of this colored range so that is definitely a a bullish signal as well right so let's take a look at spy and it'll look a lot like es same divergence so there's a question earlier about spx versus spy gamma notional and this is the the same same idea same thing hero spy options trades dominating es so market makers are are hedging spy and spx trades with es with futures let's go back to alphabetical order let's take a look at adirna now very strong correlation between price action and hedging flow it looks like putz dominating here let's go take a look at book map so nice drop lower down to the 190 liquidity level prices reversed higher up to the 192 put wall and pretty much stalled there and you can see the volume concentrated just below 191 and then at at 192 there that's shown in the session volume profile all right let's go back so again it looks like puts dominating traders were buying puts they have stopped and prices risen just a little bit as traders are buying calls and we've already looked at microsoft let's take a look at netflix and in youtube rumba ask if you had a choice of a strike with a high iv around the same strike as a price as one with a low iv i don't i really with a high iv higher iv strike be better and i'm not sure i understand your question be better for what if i'm going to sell volatility i i definitely want a uh to sell high volatility but i'm not sure your scenario uh makes sense there's uh in the same expiration probably all of the strikes are going to either have a uh a higher iv or lower iv similar similar iv netflix as usual very strong correlation between price action and hedging flow puts driving in the morning and it looks like there's a put divergence and i'll sell a call divergence let's take a look at the total line again zoom in a little bit more so hero was creeping lower while price was making slightly higher highs and then price falls and then starts to rise again as traders start taking bullish options positions okay and then rumba says sorry i meant to say open interest and yes i would definitely want to trade uh strikes with higher open interest and it depends on the instrument too so i know that that spy is going to be uh very liquid and i can trade any strike i want and spy within reason and get a great fill and that may not be the case for other stocks that are that are not as liquid so yes i'm definitely looking for a uh a strike with higher uh higher open interest for trading all right so there's netflix and vidya and the trade here was long and notice the divergence here and puts driving so this put divergence traders are selling puts all right let's go take a look at book map so we need to take a look at netflix and then let's take a look at nvidia so there is the there's a long setup in nvidia notice the order flow this quick drop down to the 187 level that liquidity there then notice all the green dots coming in aggressive buyers coming in and move price higher to the 190 key gamma strike and now liquidity next liquidity target at 192 and then 194 above right so there's a question in so questions about tesla well let's let's go ahead and take a look at tesla and we'll wrap up with that all right so let's go back to hero now oh i do let's look at qqq first then we'll wrap it up with with tesla all right let's go take a look at hero so that's nvidia put divergence long setup confirmed by order flow take a look at qqq and here i thought this was a call divergence long so traders start start buying calls shown by the rising orange line then price slowly responds as traders start selling puts as well let's take a look at the total signal this divergence is a little bit more clear hero rising the price moves higher about 10 30 10 10 40 something like that let's go take a look at book map again so there's the chopper around the 282 level right let me take a look at questions i do the hero charts plot other levels they do plot hero charts plot some of the levels i they may not put may not show the call wall but typically do show i think put wall key gamma strike for sure okay we will show i i'll uh we'll take one last we'll take a look at tesla and then we'll take a last look at yes all right so there are a couple questions um first about tesla then yes so let's go to tesla so tesla and nvidia we're about the best setups today reversals long trend break first entry here at the 139 level looks like there's absorption just above the 138 hedgewall level and price continues to move higher so let's go take a look at hero now for tesla then we'll go back and revisit yes so as usual there's a very strong correlation between options trade hedging flow and price action so there are call buyers again traders buying calls price chops around just a bit watching order flow then price reverses higher just above the 138 hedge wall level all right so if there's a question about traders buying calls on tesla yes so traders were buying calls let's see what they're doing now continue to buy calls so if you're interested in in chasing tesla uh traders are still buying calls all right and let's uh revisit es and again this is a combined signal spx and spy and traders are uh fading this move so they're buying puts and they have stopped buying calls so notice the call line is pretty much flattened out whereas they continue to to buy puts and this is pretty typical as price increases uh sab 500 traders will take negative delta positions and as price uh decreases they'll often uh by the dip they will take positive delta positions so that's es right now and let me look for questions so um so i think i answered the questions hopefully about tesla and es questions and discord um so rumba his question about open interest referring to spy in spy again i'm not that concerned because it's so liquid and there's going to be open interested almost any strike that i'm um that i'm considering trading and on a another stock that's less liquid i would definitely look for a strike with higher open interest and i think i answered the questions for um regarding the spot gamma levels on the hero charts and let's just we can do a quick scan through and see you see what we see so let's nothing on apple so amd there's the there's the key gamma strike it also shows the last closing all right so we we looked at the put divergence in es in the afternoon and rtrt ask is it necessary to have book map to trade your method i my method the way i trade yes uh i i find there is so much more information uh that i that i use on book map rather than a candlestick chart it's just um a world of difference for me so yes book map you know you could certainly trade without it but i can't i trade with book map and ba today i i'm sorry i didn't look at um bowing we can take a quick look at hero i don't have it on my book map charts it's too too late to load it but we can take a look in and hero very strong correlation between price action and hedging flow and bowing so initially traders were taking negative delta positions and then around between 1045 and 11 they started taking bullish positions looks like mainly calls driving and prices moving higher on bowing okay rtrt asked i you know it's up to you i i think book map adds uh you know as i i talked about my process at the beginning of my presentation uh book map is a key part of my process there are things that you see in book map that you're just not going to see in a candlestick chart you're not going to see the the heat map you know see where liquidity is you know they're just there's a lot of information that book map charts liquidity the volume dots i i can't trade without it and uh daryl asked can you use book map with options yes so the trades you know i i gave an example this morning of of mera and how i was using um all the information and the spot gamma equity hub and uh as well as book map as well as tasty works to try and uh enter a uh try and sell volatility try and sell a put tried sell a jade lizard and i just couldn't get filled the the bid ask spreads were too wide and i i was not able to or was not willing to give up uh that much in price but yes you can use book map with options and any trade that i talked about today you can certainly uh trade with shares or futures or calls and puts okay and calling in discord and slada zari i hope i answered your questions and that is all that i have for today so thank you on youtube for your kind words and daryl asked just discover this channel a book map will the session be available to rewatch yes so these sessions are recorded and they are available on the book map youtube channel uh in the archives and i think this recording is available uh soon after the session ends so that's all i have very interesting day microsoft just threw a small wrench in the bull bull parade which is now continuing so again that's all i have for today watch out for the data tomorrow again gdp and let's see tomorrow gdp and durable goods at 8 30 a.m eastern time and then that's it so again i will see you tomorrow afternoon at 1 30 thanks everyone bye