 Hello, everyone. Welcome to Options with Doug, streaming live daily on Bookmap Discord in the Bookmap YouTube channel at 1.30 p.m. Eastern Time. Before I get started, I need to go through the Disclosures. General Disclosure. All Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. First disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Pass performance is not necessarily indicative of future results. The focus of my presentation and the focus of the Options-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. I have a two-step process for trading, and the first is planning, and I use positional analysis. I look at how market makers and traders 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. 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 in SpotGamma Hero to confirm my thesis and for setups for entries and exits. And questions and comments are welcome, and I will be watching the Options-Doug chat channel and Discord and the chat in YouTube for your questions and comments. So please feel free to post on-topic questions and comments, and it will definitely make it more interesting for me and hopefully for everyone else as well. All right, let's get started. And what I want to cover today, my agenda for today is, first of all, go over news items for the week, economic data, as well as key earnings that will be coming up later on in the week. Then I'll go through my positional analysis for both the S&P 500 and the NASDAQ. And then finally, I'll talk about setups. All right, so first of all, news items, economic data for the week, and there are a few higher impact data releases this week, and first of all, tomorrow, and I don't know how high an impact that's going to be, consumer comments, tomorrow at 10 a.m., change my color here. All right, so that is it, tomorrow at 10 a.m., and then on Wednesday the 26th, this may be a little bit higher impact, durable goods waters, 8.30 a.m. Eastern time, and then on Thursday GDP at 8.30 a.m. Eastern time, and then finally on Friday, and this should be a bigger day for data releases. First of all, there's the PCE at 8.30 a.m. Eastern time, and then another consumer sentiment number, Michigan consumer sentiment at 10 a.m. So that wraps up the key or higher impact data releases for the week, and then there are also some key earnings. So on Tuesday, after the market closes, Google and Microsoft both report, and then on Wednesday after the market closes, meta reports, and then on Thursday after the market close, Amazon reports. So a bigger week this week than last for economic data and earnings. All right, let's take a look at some charts now. Go over my positional analysis, and we'll start with the S&P 500. This is the S&P 500 futures, ES futures, and book map. Before I go any further in this chart, I'm going to take a look at a larger time frame, and this is the SPX showing price. This is a thinkorswim 20-day one-hour chart showing SPX price and key spot gamma levels, and these levels are shown in the red horizontal lines. They're provided to spot gamma subscribers for a variety of platforms, and let me just point out a couple of the key levels. First of all, there's the put wall, the SPX put wall at 4,000, and that's also the key gamma strike. So the put wall is the strike with the largest net negative gamma that can be expected to act as support, and it's also the key gamma strike or absolute gamma strike, and that's the strike with the largest absolute gamma. And note that level did consolidate, so the put wall moved up from 3,900 last week, and remember last Friday was April expiration, so as expected a number of the levels did change from Friday to today, and then the key gamma strike last week was at 4,150, and today it has moved down to 4,000, so emphasizing the importance of that 4,000 level. And then the volatility trigger is at 4,115, that is spot gamma's proprietary gamma flip level. Below that level, market makers position is negative gamma, and they have to trade with price to hedge their delta exposure, and that tends to increase volatility. And above that level, like SPX is trading now, market makers position on the gamma curve is positive, and they have to trade against price to hedge their delta exposure. And then finally the call wall is at 4,200. So those are the key daily levels that I track every day, and there are a few other levels on that chart, and we can look at those right now in another thinkorswim chart, and this is the one day one minute chart, again thinkorswim, showing the key levels that are in play for today, as well as price, and as shown on the chart, the SPX is trading in a very narrow range today, above the volatility trigger, and below the 4,150 level that has frequently been resistance. And that was noted as resistance today in the spot gamma AM founders note, 4,150 load noted as resistance. All right, let's take a look at book about now, and we'll see the same levels. Actually, in this range today, the only level, the SPX level that's in range now is the 4,115 volatility trigger. That's the SPX, 4,115 volatility trigger. I've got two columns of notes here. The first is the spot gamma cloud notes, and as you can see showing the key SPX levels, and it looks like spot gamma is using the same ES-SPX difference that I'm using today, which is 22 points, and it may be a little bit less than that. It looked like it was, when I checked a couple of hours ago, it was between 21.5 and 22, and that's the difference between ES and SPX. So what these levels are showing, and this is my cloud notes, showing this key SPX levels converted to an equivalent ES number, and then shown on the chart. And I'm also showing key SPI levels. There's the SPI 4,11 volatility trigger and the SPI 4,12 key gamma strike. And then notice here this 4,13 level was definitely in play today in this morning acting as resistance. So that is SPI 4,13 acted as resistance today. So I'm showing SPI levels, SPX levels, and then finally also big round numbers in ES. So that is, I show the zeros in the 50s. So that is the ES 4,150 level. All right, so that is the, that's the S&P 500. And let's take a look at the NASDAQ now. So the NASDAQ reversed lower around 945. Then did a retest of the, this yellow line is the QQQ 317. And it's also the NQ 13,100 level. So the NASDAQ found resistance at those two levels. Again the NQ 13,100 and the QQQ 317 and chopped around at the kind of these combined levels. This is the NDX 12,936 that's a C4 level, Combo 4 level. And the rank of importance is one being the most important, the highest level of gamma and five being the lowest. And then that is also the QQQ 315 key gamma strike. And that's probably the more important of the two levels there. So price chopped around that level, found resistance at the 317 level. Chopped around the 315 level and finally move lower to the lower edge, the daily expected move. And this is something that I added to my chart over the weekend. I've been doing this for the last week. And this, these levels for the NQ have been gold. They're working great. So notice first of all, with the reversal lower at around 1030, that that level was a target. And then when price finally reached that level, it reversed higher, very close to that actual level. Just amazing, but those levels are working great. And again that is the lower edge of the daily expected move. All right, so I'm again, I have the same type of levels on my NQ chart. First of all, spot gamma levels. Here's the 12 callwall 12975. And note that spot gamma, I believe, is using the same point difference. Let me just check on that. For NDX, NQ, and ES, SPX, and that is, that's not right. Oops, let me see if I can find that. Yeah, they're using a 22 point difference and I calculated an 87 point difference. So these levels shown here for spot gamma are not, not in the right place. So show, for example, here is the, that combo level, the 12936 shown down here and it's actually up here. Right around the QQQ315 level. So I'm showing my, my cloud notes here probably are more accurate. So key NDX levels, there's the 13,000 level and also 2QQ levels. And then finally this lower edge of the daily expected move. Okay, I'll go over setups in a few minutes. So that is showing the, the levels that are in play for today and Luke comments in YouTube. Luke, I appreciate your kind words. Contact me in Discord if you want to have a longer conversation. I'm in Discord. My name is Doug P. So I'll, I'll be able to interact there. All right, so let's talk about shifts in levels now. And as I mentioned, last Friday was the end of the April expiration cycle, expiration on the third Friday of the month. So a lot of levels are being reset now and there were quite a few shifts in levels. First of all for SPX, volatility trigger lower, put wall higher, call wall higher and key gamma strike lower. And we'll look at these levels in just a minute. We'll look at the absolute gamma levels. So shifts higher and lower for the SPX and for spy, the volatility trigger shifted lower. And then the key gamma strike shifted higher and for NDX, all the levels shifted lower. Volatility trigger, put wall, call wall and key gamma strike. And then finally for QQQ, the volatility trigger shifted higher, put wall shifted lower and the call wall shifted higher. So quite a, quite a bit of reshuffling of the absolute gamma levels. So let's take a look at those now. All right, let's start with SPX and I'll go through SPX by NDX and QQQ. So first of all, here are the absolute gamma levels for SPX and this one's pretty obvious. That's the strike with the largest absolute gamma. That's the absolute gamma strike at 4,000 and that's also the put wall, the strike with the largest net negative gamma and that can be expected to act as support. And then the call wall remains at 4,200 or I'm sorry, moved higher from 4,150 last week to 4,200 today and that's the strike with the largest net positive gamma and that can be expected to act as resistance. All right, so that is the SPX, those are the gamma levels that are really defining the range, the near term range for SPX, 4,000 on the downside to 4,200 on the upside, the put wall to the call wall and your spy, zoom in on this. And for spy, the key gamma strike is now at 412, the strike with the largest absolute gamma. Put wall down at 400, that's pretty obvious, the strike with the largest net negative gamma and just to point out what this chart is showing is absolute gamma, market makers position at these strikes and above the zero line, positive gamma or call gamma is shown with the orange bars and below the zero line, negative gamma or put gamma is shown with the blue bars. So positive gamma or call gamma shown with the orange bars above and negative gamma or put gamma shown with the blue bars below. So there's the put wall, the strike with the largest net negative gamma and we saw the key gamma strike at 412 and then here's the call wall, that's pretty obvious. The strike with the largest net positive gamma and that can be expected to act as resistance and spot gamma was calling for support at the 410 level today and resistance at the 415. Those are the levels for spy. And Hector, good morning, ask a question in discord, I'll take a look at that later. It's kind of beyond the webinar so I'll take a look later. All right, let's see if we can take a look at NDX, probably not, need to do a refresh for some reason. So let's go to NDX now and really no need to zoom in here. So this is the 12,975 strike and that is the key gamma strike and the call wall. Put wall is not in the range of this chart. Now let's take a look at QQQ, going to zoom in on this. So for QQQ, 315 is the key gamma strike, 310 is the put wall and the call wall has moved on up to 330 now. So for QQQ, the call wall moved higher, the put wall moved lower, so there's the range for QQQ. 310 support at the put wall and up to 330 resistance at the call wall. All right, let's take a look now. Go back to SPX, I want to point out a couple of other things. So first of all, I showed this on Friday and again remember Friday was April expiration, pointing out the, and this is again from last Friday, pointing out the change from the current expiration, which would be Friday, that's shown by the green line there and this is the gamma model and then the next expiration, which would be today for SPX showing that dropping lower. And what this was showing on Friday was the drop in gamma and positive gamma there, indicating that a lot of that gamma, positive gamma that was supporting the market, was set to expire on Friday and that would lead to higher volatility and wider trading range today and that was expected again based on the expiration of the strikes with a lot of positive gamma. All right, the next thing to take a look at is the Vana model and I do talk about this every day. This is showing two curves. This is for SPX, this first curve, this light gray line, is showing how market makers delta notional changes with changes in price and price alone, that shown here on the vertical axis and price, the strike price is shown here and what this is showing is that as price increases, market makers delta notional increases and they have to sell futures to hedge their delta exposure as price increases and that is typical of a positive gamma environment with market makers trading against price to hedge their delta exposure and again that tends to subdue volatility and then on the other hand, this pink curve is adding in the impact of changes in implied volatility and that's the Vana effect, the change in implied volatility, the change in delta with the change in implied volatility. So what this is showing is on the upside, there's really not much of a Vana tailwind for a move higher. The gray curve and the pink curve are pretty similar and then on the other hand, if price decreases and implied volatility increases, this is showing that market makers delta notional will increase and they'll have to sell futures to hedge their delta exposure and that's pretty typical as the market shifts from positive gamma to negative gamma. Right, that's the Vana model and we'll just look at it for SPX. Then finally, I want to take a look at some data and first of all, I'm going to look at two things here. First, I'm going to look at gamma notional. This is market makers position on the gamma curve for SPX, SPI, NDX and QQQ and note these numbers are all positive indicating market makers position on the gamma curve for all these NDX products is positive and again in a positive gamma environment, this means that traders are short calls, market makers are long calls and they have to sell futures as price increases to hedge their delta exposure and then as price drops, they can buy back their short futures. So they're trading against price to hedge their delta exposure in a positive gamma environment and these numbers did drop from last week. So for example, just for SPX, gamma notional is 5.3 billion and today it is 4.1 billion and on Friday for SPI, gamma notional was 9.2 billion. Today at 7.9 and for QQQ, on Friday it was 4.2 billion and today it was 3.3 billion. And one other thing I want to point out is this spot gamma, gamma NDX and what that is, you can read this pop up and it's a proprietary measurement of the total amount of market gamma and the reason I'm pointing this out is I posted a chart in Discord and I'll show it here of the last 30 days for SPX and what I wanted to illustrate is the impact and how you can use that number positive or negative gamma to anticipate volatility and trading range and unfortunately the number that I've been following for quite some time, the gamma notional, when spot gamma changed the interface on April 1st apparently changed the algorithm for the gamma notional number but they kept that spot gamma, gamma NDX at the same number so I could compare that number before this date March 30th shown by the number 2 here. So what this is showing is that spot gamma, gamma NDX when it's negative that's indicating market makers position is negative gamma and that indicates and they used to have a scatter plot showed that showed that as the spot gamma, gamma NDX the SGI dropped below zero that the daily range would expand and that's shown here in this uptrend labeled number one. So what this is showing is the SPX moved 260 point higher in 13 trading days and that was when the SGI was less than zero market makers position on the gamma curve was negative and remember they're trading with price to hedge their delta exposure and then the SGI flipped to positive on March 30th and notice then after that SPX settles in a trading range in approximately 100 point trading range that at the time that I put this together over the weekend had been SPX had been trading in that more narrow range for the last 17 days. So that is a clear indication of the power of tracking that number positive or negative gamma and I posted this in discord. Okay so again remember that's also this gamma index all of these numbers SGI dropped from last week and still positive for SPX and this is the number that I for the SGI that I track more more most closely I think it's the most meaningful all right let's take a look at some setups so overall I was expecting and this is what spot gamma noted in the AM founders note and they have been noting this for a while noting that again that positive gamma expired last week looking for higher volatility wider training range and they were favoring actually a move down alright so let's take a look at the S&P 500 we'll start with the S&P 500 whoops I'm showing a combined signal whoops wrong tool a combined signal for the S&P 500 showing SPX spy XSP which is not significant and ES so these are showing options trades and SPX spy and ES and showing the hedging impact of those options trades in real time so this is hero hedging impact of real-time options and this white line is showing price and the purple line is the hero signal and we'll take a closer look at this in a minute and normally this is the signal that I look at for any trading the S&P 500 and let's just take a look at the components so we'll start with SPX and then we'll come back to this signal but I just want to take a look at the individual signals and notice overall the this notional value is about minus 500 million alright so we'll start with SPX and notice this number is positive at 416 417 million and let's take a look at a spy minus 561 million and then ES minus 362 million so ES has been overall just judging by the direction and the the line here the most negative so let's go back to the combined signal zoom in on this and we'll talk about some setups this morning so first of all there was a couple of divergence setups it took a while for this to play out notice that hero drop drops more price it did drop a little bit then made a similar high and that's at the spy I believe that was the spy 413 level and then hero diverges again setting up a short so let's go take a look at book map now go back to SP 500 and yes that was at the 413 level so traders were taking negative delta positions as price approached a level it's the way to approach this once you see the divergence set up in hero is to watch book map here for a a potential level for a reversal and there it was not a not a really significant level but the spy 413 level acted as resistance again and you can see the the shift in order flow here in the S futures trend break and notice the pink volume dots note the clear shift from green moving up to the 413 level to now pink as price breaks this trend line at the 413 level again traders were taking negative delta positions and watching the order flow here these lines in the sub chart were showing that first of all the dark blue to pink line that's cumulative volume delta and also the yellow line that's cell stop orders fueling the move lower right let me check for questions and Hector I ask when you have a consolidation through a lot of days how do you know if it is accumulation or distribution and you wait for a breakout of higher low or lower low and this this is not something that I look at I'm day trading so I'm looking at new day every day and I talk I'm talking about what I look at every day I'm looking at levels and how traders and market makers positioned how those levels change from day to day and then looking at order flow and hedging flows so I'm not looking at consolidation through a number of days well that you know I did look at that SPX chart but that was just in showing the impact of a positive gamma environment so I'm anticipating that some of that positive gamma was released on Friday leading to a you know potentially higher volatility and larger trading ranges for the day so that's how I look at that alright so there's the SPX the short setup let's go back and take a look at hero now so we saw again the divergent setups took a while to play out about an hour so the the short was at spy 413 at 1030 trend break shift in order flow let's go back and take a look at hero so here's the current signal it looks like traders are taking negative delta positions again where they were taking negative delta positions and then they decided to join the party now negative delta again it looks like that you know of course the best move so far was this morning the two divergent setups and the one that finally paid at 1030 right let's take a look at Nasdaq now and for Nasdaq I'll look at QQQ and very nice divergent setups here this morning and QQQ so note the falling hero line and then price reverses lower and this started earlier in the S&P 500 and then there was a move higher reversal higher and hero makes a lower high and price makes a lower high and there was the the best setup just right around 1030 a little bit before just a little bit before the S&P 500 move lower right let's go take a look at we'll take a look at first of all NQ so as I mentioned before here's that the first let's zoom in on this here's the morning session the first reversal lower not really at any discernible level there there may be something as traders were taking negative delta positions then a retest of the 13100 level again as traders were taking negative delta positions and there's the best setup the reversal right before 1030 down to the lower edge the daily expected move and order flow was was bearish no cumulative volume delta pink here indicating it's negative so shifts from dark blue positive to negative and then also the falling yellow line indicates that sell stop orders were helping to fuel the move lower so there's again as the the short setup reversal at the QQQ 317 level the NQ 13100 level and then the NDAX 13000 level as water flow shifts bearish with all the pink dots coming in market sell orders right so that's the setup and the NASDAQ and then let's take a look now at how traders options traders were reacting at this touch of the lower edge of the expected move for the day and let's go back let's check the time so that was right around 12 noon Eastern time let's go back and take a look at hero now and note that as the NASDAQ was heading down toward that level options traders were taking positive delta positions anticipating a reversal at at that level that didn't last long but so far prices continued to move higher as water flow shifts bullish knows note the rising cumulative volume delta CVD and also iceberg orders that helped to initiate the move higher these are shown by this light blue line larger traders buying buying the weakness with iceberg orders they used to hide their size alright so the NASDAQ continues higher let's go back and take a look at at hero and so far this afternoon traders are after this first move higher starting around 1240 taking negative delta positions let's just zoom in on this afternoon session yeah still negative delta let's see what they're doing so net today and this is pretty typical of an index they are traders are buying calls that's a positive number shown by the orange line and they're also buying puts shown by that negative number there and net net the total is negative well let's take a look at some stocks and the first one I want to take a look at is Amazon and this was a good short setup this morning not quite a divergence here but a clear confirmation of a short call wall above at 110 price makes it up to about 109 and then options traders started taking neg negative delta positions and price moves lower let's go take a look at book mount go to an Amazon and there's the reversal at the 109 level I'm going to zoom in on this there's the reversal call wall up up up above about 310 note the shift in order flow green dots to pink dots market buy orders and then aggressive sellers sellers start to come in at 109 shown by the pink dots pink volume dots there then a break below feewap and price moves lower and the primary target was the 105 liquidity level so nice four-point move lower lower and Amazon with a clear signal from hero from options traders and let's take a look at meta go back and take a look at hero and assume in on the on the morning session and I thought this was setting up in the morning a divergence short not not as clear as the S&P 500 and NASDAQ hero falling price falls and one other thing to point out here is this actually a confirmation of a long setup here in the afternoon let's go back and take a look at book map now and note the reversal at the this level should not be there that was from last week I I need to clean that up the reversal higher at the 211 level let's go back I want to take a look at hero again see if so there are no no key gamma levels no gamma levels in play for meta just that 211 level all right let's I want to take a look at one other thing earlier today actually yesterday marty mcspy I doesn't look like he's in here maybe he's in youtube I asked please tell me why you prefer to trade shares instead of options so I set up an example in thinkorswim and this is a simulated trade in meta so I was looking at meta at that around that lower lower strike lower point of the day and again just a simulated trade took a long call this is a call that expires on on friday and that's for stocks single stocks that if you want that's the shortest term available the friday expiration and one thing that I want to point out now the implied volatility is quite high that's because meta reports earnings this week that's noted here implied volatility 107.40 quite high so you're paying a lot for the call and notice it's 925 dollars so from my point of entry so actually let me show them so there's the breakeven at expiration and that is the 212 strike plus 925 comes out to 221.75 that's shown here so by the end of the week to make any money at all meta has to trade above 221.75 what this is showing for those of you who may not be familiar with the risk graph this is showing a profit and loss line for today and then this is showing profit loss at expiration on friday at the end of the day on friday and this is showing as as time passes this purple line will drop down to the blue line so you're paying a pretty stiff penalty for owning this call and that penalty is right now theta is 100 minus 120 almost 121 dollars a day so just to own this call you're paying losing 121 dollars a day so that's why I don't don't like to buy options and especially calls and especially high price calls so marty again it looks like you may not be in here i'll post this in and discord later and urge you to watch this recording all right so right now it's up 85 dollars uh i guess the only advantage of this is you have a built-in stop loss so but you're paying quite a penalty and this theta number will increase every day so you'll pay a higher and higher penalty as price moves on and the purple line drops down to the blue line so that's why i don't like to trade buy options i i prefer to be a seller of options all right the next setup let's take a look at nvidia good short setup in this uh this morning let's take a look at hero go to nvidia and there's a as usual pretty strong confirmation between hedging flow and price action shown here for nvidia let's see what traders are doing so net it is still negative so that means they're buying puts and selling calls i'm looking at this notional value this number purple number over on the right right side of the screen the vertical axis let's take a look at order flow and as traders were taking negative delta positions nvidia made a series of lower highs and 1030 move below vwap and a couple of actually three higher liquidity targets below there at 270 268 and then finally at 267 around noon noon eastern time one other stocks that that was about when the qqq the nq reached that lower edge the expected move for the day and started to move higher let's go back to hero and see if there were any yama levels in play and no the the hedge wall down below it at 265 and that's not in range today and note the shift higher again around noon as traders started taking positive delta positions all right let's take a look at tesla and tesla is another stock with a very strong correlation between hedging flow and price action and note that tesla reverses lower at the 165 hedge wall right here and traders start taking negative delta positions and price moves lower let's go take a look at book mount and again note the sharp drop lower at the 165 hedge wall and no and i'm but not really marking those uh key gamma levels on stocks anymore i'm just trying to save some time in the morning those levels are shown on the hero charts and that's enough it's just a little bit too much work to show these key gamma levels that change from day to day on my stock charts so i'm just marking the gamma levels on nq and es and that's it so here's the short setup in tesla today reversal at the 165 hedge wall lower high break below vwap with a 160 high liquidity target there's tesla let's do a quick check of the indices again so it looks like now that the s of p500 is starting to stall a bit at the 412 key gamma strike the spy 412 key gamma strike let's take a look at nasdaq also consolidating a bit just below the qqq 316 level and the nq 13 0 50 level all right let me take a final look at questions uh hector again i hope i answered your question so i'm when i was showing this this chart here and this may be what you're thinking about or referencing in this consolidation i'm not really thinking about accumulation or distribution and a breakout higher or lower what i'm pointing out in this chart is the change in market structure based on market makers position on the gamma curve and the way i use this in a negative gamma environment shown in the range of this up arrow on the left the one number one i'm looking for a higher trading range every day in a negative gamma environment in higher volatility higher trading range and as market makers position changes from negative gamma to positive gamma shown with this number two here here i'm looking for more range trading range type days that's how i'm using this lower volatility and a more narrow trading range up and down notice there were more more trend days in this range shown by number one and more range days trading up and down that's how i approach this looking at the change the difference in negative gamma and positive gamma and how that might have an impact on trading during the day so i'm not looking at this as any long-term uh long-term impact other than what what i might expect during the trading day okay all right that's all i have for today i want to thank you for watching thanks for your question to comments and i will see you tomorrow thanks again bye