 Hello everyone, welcome to Options with Doug. Streaming Dive 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. Creating 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, water 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 in the first is planning and I use positional analysis. I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding 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 on Bookmap and real-time market maker hedging flow in Spot Gama Hero to confirm my thesis and for setups for entries and exits. And just to be clear, I will be talking about setups today and I will be talking about setups in an underlying asset. For example, the NASDAQ and that can be taken with QQQ shares, QQQ options, or NASDAQ futures. The last thing is questions and comments are welcome and I will be watching both the option stash dug chat channel and discord and the chat in Bookmap YouTube for your questions and comments. So please post your questions and comments. It will make it more interesting for me as well as hopefully everyone else. All right, let's get started. What I want to talk about today, excuse me, I still have a, I think my cold turned into a sinus infection. All right, so what I want to talk about today, my agenda for today is first of all go over news items, economic data, and events coming up for the week. And then I'll go over my positional analysis and briefly review a few setups and then we'll go to the live market and watch the live market primarily in futures and the S&P 500 and NASDAQ futures. All right, so first of all news, economic data for the week. There are a couple of items to be aware of. First of all, tomorrow retail sales out at 8.30 a.m. Eastern time. And then Wednesday is the VIX expiration. I think that's at 9 a.m. So that's the VIX expiration, monthly expiration. And then on Friday, that is the monthly options expiration. And also apparently, Fed Chair Jerome Powell is speaking. This is showing Powell speaking at 11 a.m. Eastern time on Friday. So those are the key events for the week, not a big week, but the, except for the options expiration, really. And also it appears that there are a number of Fed speakers at all times throughout the week. So something to keep an eye on. All right, let's start with positional analysis, my positional analysis. And this is the S&P 500 futures ES and book map. And before I jump into this chart in more detail, I'm going to take a look at a larger time frame. And this is SPX starting, this is about 30 days, starting at the beginning of April when SPX, Market Makers position on the Gamma Curve, or SPX shifted from negative to positive. And since then, SPX is traded in a fairly narrow range with the lower edge at 4050 and just below the 4200 call wall. So again, this is SPX showing price and some key levels. So first of all, let me point out a couple levels that I track. This is the lower and upper edge the expected move for the week. And this is from the options market. And then that's the, so that's the purple line. And then the light blue line is the lower and upper edge of the expected move for the day. The next levels, these are provided by Spot Gamma to Spot Gamma subscribers for a variety of platforms. And here again, we're looking at thinkorswim and a 30 day one hour chart. And let me point out a couple of key levels here. Here's the 4000 level. And for SPX, that is the put wall, the strike with the largest net negative Gamma that can be expected to act as support. And that is also the absolute Gamma strike, the strike with the largest absolute Gamma. And then the volatility trigger here at 4110. And that did act as support today. And the volatility trigger is Spot Gamma is proprietary Gamma flip level. Below that level, market makers position on the Gamma curve is negative. In a negative Gamma environment, they have to trade with price to hedge their Delta exposure. And that tends to enhance or increase volatility. And then on the other hand, above that level, market makers position on the Gamma curve is positive. In a positive Gamma environment, they have to trade against price to hedge their Delta exposure. And that tends to subdue volatility. And then finally, here's the call wall at 4200. That's the strike with the largest absolute positive Gamma that can be expected to act as resistance. So those are the primary Spot Gamma daily levels that I track. So again, that is a larger time frame, 30 day one hour chart. Now let's take a look at, just take a look at a shorter time frame. This is today just showing SPX price and levels in play. And the thing to point out is this 4110 volatility trigger that did act to support in the morning. So those are the, that's the level that's in play for today, the Spot Gamma level. All right, let's go take a look at book map now. So here's the, here are the levels on the book map chart. So first of all, the Spot Gamma levels provided again to Spot Gamma subscribers, this, in this case for book map in the form of cloud notes. And then I have my own cloud notes. And right now it looks like Spot Gamma is using a 13 point difference between ES and SPX. So what Spot Gamma is showing is a 13 point difference between ES and SPX. And I calculated that difference at about 13 and a half or 13 and a quarter points. So my volatility trigger level is just slightly above. And note again, that level did act as support. Other levels in play, here's the, first of all, the 4130 support level. This was noted as support in the Spot Gamma AM founders note. And it actually initially acted as resistance right at the open. And then this is the Spy 412 Absolute Gamma Strike. And note the volume concentrated around that level. And then here is the upper edge, the expected move for the day for ES. And that's a little bit different than the expected move for SPX. All right, so those are levels in play for the SAP 500. Again, the key takeaway here is the support at the 4110 volatility trigger. Let's take a look at NASDAQ now. And we'll talk about setups in a few minutes. So first of all, here is the NASDAQ. Let's just take a look at QQQ. And this is a one day, one minute chart and thinkorswim for QQQ. And the levels that are in play for today, first of all, the 324 level. And that also corresponds to an NDX level that did act as support today. So I'm chopping around the 325 L1 level, and then resistance at the 327 level. And this was a setup that I pointed out this morning, a hero divergence along at the 324 level. And it took a few minutes to play out. And then you could have held that to the 326 level or the 327. And I'll talk more about that in a few minutes. All right, so let's take a look at the NASDAQ futures now. And I have these levels shown on my cloud notes. So here is the 324 support level that is also the NDX 13,300 large Gamma 1 level, 326, a lot of chop around that level QQQ 326, and then 327 resistance. And note, if you did hold whatever trade you had, a good time to get out was at the upper edge of the expected move for the day for NQ. All right, so that is those are the levels in play for today for the S&P 500 and NASDAQ. And now let's talk about shifts in levels. And there were just a few for spy. And let's, while I'm talking about that, let's actually take a look at the absolute gamma levels. I'm going to start with SPX. And for SPX, there were actually no shifts in gamma levels. So the put wall remains at 4000. And this chart is showing call gamma or positive gamma with the orange bars above the zero line and negative gamma or put gamma below the zero line with the blue bars. So there's the 4000 strike, that is the put wall, strike with the largest net negative gamma. And that's also the absolute gamma strike, the strike with the largest absolute gamma. And then note the concentration of put and call gamma at 4100 and at 4150. And then finally the call wall at 4200, the strike with the largest net positive gamma. Right, that's SPX. Take a look at spy. Right, for spy, there were shifts in levels. The volatility trigger shifted slightly lower from 411 on Friday to 410 today. And then the call wall shifted lower from 420 to 415. And the, so the call wall has shifted lower from 420 to 415. And I interpret that as bearish. And then the absolute gamma strike remains at 412. So call wall at 415, absolute gamma strike at 412. And then the put wall remains at 4000. Alright, I'm going to do a refresh. I normally have to do that. So I'll just do that preemptively. Before I can take a look at NDX. So here's NDX. Remember that support level at 13,300, that large gamma one. And there it is. That's the level that acted as support for the NASDAQ today that is NDX 13,300. And note I calculated the point difference between NQ and NDX at 57 points today. And then finally let's take a look at QQQ. So for QQQ, 320 is the absolute gamma strike. And then the put wall actually shifted higher to 315. And the call wall remains at 330. So ceiling at 330. Floor at 315 for QQQ. Let's take a look at one other thing while we're on this chart on this page. That's the VANA model. This is for SPX. And what this chart is showing is how market makers delta notional changes with changes in price only. That's the gray curve that's shown. So horizontal axis is showing delta notional. The vertical axis showing delta notional horizontal axis showing price. Gray curve is showing how market based delta notional changes with changes in price only. And then the purple curve is showing how market makers delta notional changes with changes in price and changes in implied volatility. And that's really what we want to be looking at. So this is showing as price increases. Market makers will have less delta notional to hedge than predicted just by the gray curve when you add implied volatility into the equation. On the other hand, as price decreases and implied volatility increases, market makers will have more delta notional to hedge. So they'll have to sell futures to hedge their delta exposure as price begins to drop and implied volatility increases. Let's just take a look and see where SPX is trading right now. I've got SPX at $41.24. So that's right here. Actually right where these cross over. So this is showing as price increases. Market makers may be able to buy back short hedges up to a certain point. And then below that level as price decreases, they will have to sell futures to hedge their delta exposure. I just want to take a quick look at QQQ and show how that provided a little bit of assistance this morning in that long trade. So remember the long trade was the reversal at $3.24 shown right there. And what the purple curve is showing is that market makers can buy back short hedges as price increases. And that provides a little bit of a tailwind. Alright so we've talked about the levels and play for today, the shifts in levels. We've looked at the Vana model and then finally let's take a look at the spot gamma gamma index to get a sense of how market makers are positioned on the gamma curve. And this is for SPX, SPY, NDX, and QQQ. So fairly neutral here. Note that for SPX the number is slightly positive. For SPY, slightly negative. And then pretty much neutral for NDX and QQQ. So SPX for example, this is showing that market makers position on the gamma curve is slightly positive. And for SPY, slightly negative. And RJ asked the spot gamma talk about the time of the month day that Vana effects are more pronounced and not recently but but yes. So what was happening a lot last year in a negative gamma environment is that puts would expire monthly. So when larger traders are hedging their portfolio, they sell calls and buy puts. And they're buying puts that expire at the monthly expirations. And so after that Friday expiration, when those puts expire on Monday, market makers could buy back their short hedges. And that tended to lead to rallies on the Monday after the monthly expirations. And that's last year in a negative gamma environment. All right, let's take a look at some setups now. And then we'll go to the live market. So first of all, this is the S&P 500. This is a combined signal, combined hero signal for SPX, SPY, XSP and ES futures. XSP is not significant. So for those of you who may not be familiar with this chart, this is spot gamma hero. It's showing price with a white line and options trades for again SPX, SPY and ES futures into one combined signal in the market maker hedging activity. So right now this combined signal, the delta notional is about minus 400. And let before I expand this chart, I want to take a look at how the individual components are contributing. So first of all, let's take a look at SPX. And that is overall notion of values negative minus 147 million. Let's take a look at SPY. And that is showing minus 284 million. Take a look at ES futures. And that's actually positive 94 million positive. And that is showing what appears to be a much stronger correlation between price action and ES futures. All right, let's take a look at the combined signal. Zoom in on this. So this is showing a couple of setups. First of all, in the morning, supporting a short right at the open. Let's go take a look at that in book map. Let's go back to the ES. So there's ES. And again, this 41 30 level active as resistance right at the open. And order flow definitely supported a short cell stops and aggressive sellers fueled the move lower to the 41 10 volatility trigger level. So there's the 41 10. So nice short setup from the open in ES. And let's go back and take a look at hero. And then let's just zoom in. At the 41 10 level, trader started taking positive delta positions. And it was a little bit light, not much of a lead like, like the NASDAQ. So let's go take a look at book map now, scroll over to the right and note the shift in order flow. You can see all the aggressive buyers coming in here, the green volume dots, rising cumulative volume delta. Also by stop orders fueling the move higher. And let's go take a look at one other thing. Another confirmation of along here. These this large iceberg orders, 3200 contracts, two executions. And you can see that there with the on chart indicator, as well as the sharp rise in the light blue line there, iceberg orders buying as price moves down to a key support level. And then price begins to move higher. And it's price moves higher, aggressive buyers coming on, as well as buy stop orders help to fuel the move higher. And good afternoon, Hector. Glad you're here. All right, so that is the SAP 500 short set up, short set up and long. A lot of lunchtime shop begins early. Looks like around 1115 shops until 1245, about 90 minutes. All right, let's take a look at the afternoon now. Go back to hero. And it looks like options traders get back in sync. And this helps looks like there's a large block order here. Let's just see what traders were doing. So it looks like call buyers. They're a call by large institutional call buyers. And that helps to move the SAP 500 higher. So pretty strong correlation between hedging flow and price action. Now it looks like this could be a divergence long setting up. And Hector asked, could you tell me the name of the levels you analyze on SAP 500 in order to study them? I'm showing those levels on my chart. The primary spot gamma levels that I follow, there are other secondary levels, the primary levels are the put wall, absolute gamma strike, volatility trigger and the call wall. And those are all provided by spot gamma. There's no nothing that I need to do other than calculate the difference between ES and SPX and show them on my chart. I do the same thing for spy. So that is the SPX levels, as well as the spy levels. And I show those on my chart every day. And the expected move is no, not provided by spot gamma, although they do provide a level. I just use what is shown in and think or swim. And I've talked about that before. Just look at an options chain. And you can see the expected move for every day for SPX or ES. They both those instruments have options that expire every day. All right, so that is that's the SP 500. And let's take a look at NASDAQ now. And this is a combined signal for NDX and QQQ. And this is what I posted and did in discord this morning. Just I think about 10.05 a.m. And this is what I'm talking about. This divergence long led to a very nice setup. Note the rising hero line that starts to rise a little bit before 10 a.m. And then this reversal comes about 10, 10, 15 minutes later. All right, let's go take a look at book map. And RJ says expected move is based on the IV and the daily option. So it's what IV expects with the range 68% of the time. That's correct. So I just use the input. I use the expected move provided in the option chain. There are a number of ways that you can calculate that price times IV times square root of the price divided by the actually days to expiration provided divided by the 252 typically for the daily. All right, so strong correlation between hedging flow and price action here in NASDAQ. Let's go take a look at take a look at the NQ now. So there's the reversal. So when you see in a divergence like that, the way I treat that, so I see hero going one way price going another. And then I look at book map for signal confirmation of a reversal setup. So the first thing that I look for is potential support level. And there it is right there in Q 13 350 Q Q Q 3 24 and in DX 13,300 large gamma one level. So I have a support level. I know that options traders are taking positive delta positions. And then I just watch order flow for a shift. Here I can see the aggressive buyers coming in note that shift from pink dots to green dots volume dots rising cumulative volume delta. Also the yellow line is rising by stop orders fueling the move higher. And the target the I'd say the upper target expected daily move here or 327, which was the actual resistance level. Alright, so there were a number of ways to take that. And one way is with a QQQ option. And here is a an options trade shown for just one contract purchase price 92 cents or $92 for risk. And then so far the profit daily profit is about $150. So more than 100% gain on that on that call option. That's the 324 that expires today. So that is one way to take that another you could have traded any kind of spreads either by call spread, sell a put spread or QQQ shares or Nasdaq options. So this is just showing an alternative. Something that's simple. You really don't have to worry about stop loss. Just, you know, just simple buy a zero DTE option. So Hector last week you were asking about zero DTE options. So there you go. Alright, so it looks like Nasdaq is trying to make it back up to the upper edge of the expected move for the day. Alright, let me highlight a couple of quick stock setups. And then we'll go back and watch the live market. And which yes and then Q both appear to be moving higher again. Alright, so let's take a look at hero. I'm gonna go and I'm just gonna highlight a few stock setups. So the first is AMD and note the rising orange line. So this is AMD being driven by call buyers. Rising orange line means traders are buying calls. And when traders buy calls, market makers sell the calls and they have to buy stock to hedge their delta exposure. Look at AMD. Nice uptrend after the reversal at 1030. Traders buying calls. We'll go back and take a look at hero. And it looks like now that activity has leveled off. So if I were long here I would be looking to exit to take a profit. And that appears to be what the call buyers are doing. Alright, the next that I want to highlight is Amazon. And note the weak hero signal here. This is showing it comparing the hero signal to the range of the last 30 days. That's shown by the entire length of the slider here. And then the color portion shows the hero signal for the last five days. And notice the hero signal for today is about as weak as it's been in last five days and the last 30 days. Zoom in on this. Zoom in on the morning. And I thought this was a nice divergent short. Note the large drop in hero here. Looks like a large block order. And price moves down past the 110 call wall key gamma strike. And note for Amazon that call wall did drop lower. I think it was one. Well, we can take a quick look at equity hub. So that is a. So there's Amazon. Yeah, it was 115 on Friday. So note the drop lower from 115 to 110 in Amazon. So that is a bearish signal. Alright, so that's Amazon. Let's take a look at meta. And this is a large block order kind of obscuring price action of the morning. But when you zoom into the morning, you can see the hero signal without that large block order. It makes it easier to look at. And you can see that traders are buying calls. Let's go take a look at book BAM meta and note all the aggressive buyers coming in here as traders started taking started buying calls. Again, market makers are selling the calls and they have to buy stock to hedge their delta exposure. And 240 I believe is let's go back and take a look at hero. So 240 is the call wall also the key gamma strike. Primary target for the move higher in meta today. And that large block order is calls. So some large institution bought a large block of calls. And then finally Nvidia and then we'll get back to live market strong correlation between hedging flow and price action traders buying calls again shown by the rising orange line. Let's go take a look at book map. So there's the long setup in Nvidia. Note the shift in order flow is price reverses at the 282 level. Pink volume dots down to that level. And then a lot of aggressive buyers start to come in as well as call buyers and price moves higher. Let's go back to hero. And I don't see any any spot gamma levels in play for today. Alright, let's get back to the market now. We'll go to the S&P 500. And traders are continuing to take positive delta positions. Although that activity does appear to be loving leveling off a bit. Excuse me. Alright, so let's go back to the S&P 500 and a new to Dario ask hi in the 77 day trial version of spot gamma I assume. Is it possible to view hero index hero? I believe it is. I'm a spot gamma subscriber. But I believe the seven day trial is for alpha the alpha version, which includes hero. You can confirm that with with spot gamma. Just send them an email info at spot gamma dot com. Alright, so not a lot to see right now. There was a pretty. Alright, so when discord grasshopper says yes, you can see hero on the seven day trial. So the seven day trial is for the alpha subscription. Thank you grasshopper. Alright, so S&P 500 continues to grind higher. Nice shift here in order flow pretty visible. aggressive sellers pink dots on the way down. Price consolidates for a few minutes and then aggressive buyers start to come in. Now moving price back up potentially to the ES 4150 level and the spy 413 level. We'll go back and take a look at hero. So heroes leveled off at this point. Maybe we can see what zero DTE options traders are doing. And that is all leveled off. So this light green line is showing options trades that expire today again for SPX spy and ES. And then the purple line is showing all expirations. Let's take a look at NASDAQ. It looks like options trades are leveling off. It's like moving slightly lower. And grasshopper asked when hero levels off as that signaling consolidation, signaling consolidation or a potential reversal. You know, anytime you see that you want to go take a look at take a look at book map. So let's go take a look at book map. Let's go to NASDAQ and they may be going for the upper edge of the expected move for the day. And RJ asked for options expiration week. Would you expect barring any major news or events? General chopping, grinding, burning IV until Friday. I would expect yes for this week narrow trading range. And that's what I was looking for today. A range day today, not a trend day. And that's what helped contribute to that long setup that again that I posted in Discord, the reversal higher in NASDAQ at the QQQ 324 level and also the NDX 13300. And let's just see what spot gamma had to say about that. Let's take a look at the QQQ chart. That may be a little bit smoother. So that was the combined signal for NASDAQ that included NDX and the price line looked pretty choppy. So the bulk of the signal is coming from QQQ anyway. So now it looks like options traders are fading that move higher. So what spot gamma was saying this morning, this is the amp founders note. And to anticipate today's price action to mirror that a last several sessions, tight trading range inside of large gamma strikes and they're looking for a chance of range expansion after the Wednesday AM VIX expiration and then also after the options expiration on Friday. So trading range the next couple of days, potential expansion after VIX expiration and then more likely expansion after the monthly options expiration on Friday. And that's pretty typical as the a lot of the call gamma that has been supporting the market expires. A lot of the positive gamma recall gamma that supports the market expires. Let's go back. We'll take a look at SB 500 QQQ. I'm just going to see how much NASDAQ. So NASDAQ is contributing 113.4 million 97.4 million. So we do need to look at the total signal, even though the price is a little bit choppy. That's odd. Oh, I know what I did. Let's, you know, there's NDX 16 million and then 97 million for QQQ. So we'll stick with the total signal. Let's go take a look at book map. And does anyone have a another stock that you want me to take a look at? So there's not a lot to see here right now in the in the indices. You know, the big moves were reversal lower at the open than the reversal higher around 1015 reversal lower at the upper edge of the expected move the day. And then this reversal higher pretty well signal with order flow, you know, price trying to make it back up to the 13465 level upper edge of the expected move for the day. Let's take a look at the SB 500. So Grasshopper ask I get confused on the total versus separating the hero signal. Is it more helpful to look at total put versus call volume? Well, you look at either total or call and put. So let's go take a look at back to hero. We'll go to the SB 500. This is generally what I look at the total signal for all expirations in a one day rolling window period. And also again, total signal all expirations, one day rolling period. This is the default. And then if you want additional clarity, especially for stocks, if a stock is rising, I want to see if traders are buying calls. So I tend to separate the signal more for individual stocks, single stocks than I do for the, for the broad market. So let's just take a look at puts and costs. This really this does not provide any additional clarity. And other than being being a little unusual today, typically traders are buying puts and buying calls. In this case, they are selling puts and selling calls shown by the negative numbers there. So they're they're selling volatility today is what traders are doing. All right, let's go back and take a look at total. But then on the other hand, for something like, well, let's go to what do we look at AMD separating out the signal? To me provides much more clarity. Traders are buying calls and they're buying puts call buyers are winning. And that was definitely driving price in the morning. So for the indices, I typically will look at just again, the total signal, all expirations and the one day rolling period. Now there are times when separating out puts and calls will provide some clarity, some additional clarity. And that you know, that's the beauty of a hero here, you can slice it and dice it any number of ways. And it, you know, it updates quickly. All right, so there's a request in YouTube to look at coin. We'll take a look at that. And I do not have coin in book map. So we'll just have to look at it here and hero. So it looks like a nice rally today in coin. And traders are buying calls and they're buying puts, but call buyers are winning. Let's just check that again. They're actually bought the selling puts, I'm sorry. So they're buying calls and selling puts, giving us this total signal rising, confirming the price higher. And in gangsta asked you book map for these book map for understanding the direction of a volatility breakout. I look at book map for understanding order flow. So in book map, I have order flow and levels. That's that's primarily what I'm looking at in book map. So in book map, I'm you looking at the order flow. Again, I'm looking at the volume dots pink versus green. That's confirmed by cumulative volume delta. This pink to dark blue line. I'm looking at stop orders. Shella line also buy stop orders there. And I'm also looking at iceberg orders that I pointed out before looking at what large traders are doing. So with all that, I'm looking at how different players are positioning themselves, how they're trading today, large traders with iceberg orders, typically smaller traders with stop orders. And then I have the levels all set in book map. So I have SPX levels, spy levels, and ES levels, all on one chart. And I can see how prices reacting at those different levels. So this is how I'm using book map. All right, so let's take one final look at at NASDAQ. So in gangsta, I'm not sure exactly what you mean by a volatility breakout. So he asked in gangsta asked, What about in terms of entry exit? Do you play the ranges? As you marked your thinkorswim charts with a potential potential high and low of the day, it depends on the what I expect for the day. So again, I expected a range day today. The spot spot gamma gamma index was positive for the SPX. Also, this is expiration week, a couple of events coming up later on in the week, the VIX expiration and the options expiration on Friday. I read the note in the spot gamma AM founders note. Given all that, I was expecting a trading range today. So I was looking at buying lows and selling highs today. And typically, the NASDAQ is more likely to reach either the lower or upper edge of the expected move for the day. And that, you know, that was shown here. So the way that I would treat this is, you know, just looking at it as that a potential target or, you know, that looking for a NASDAQ, I would be looking for more of a buying volatility with the expectation that those trading ranges may be touched. And then on the other hand, for the SAP 500 potentially selling volatility, since typically SPX does not reach those upper and lower ranges of the day. So when expected, when actual volatility is less than or when when the actual volatility is less than the expected volatility, that's a good time to sell volatility. And then on the other hand, when when expected volatility is about the same as actual volatility may be a better time to buy. So anyway, the way I traded this I showed with the the long call. So again, finally, just the bottom line to your question is it depends on the type of day that I'm expecting and also what I'm looking at to trade. But again, for today, I was expecting trading range buy the lows and sell the highs. And I think any time that these these levels, these upper and lower, upper and lower expected move the day is, you know, good time to consider a reversal trade. Right. That's all the time that I have. I want to thank you for your questions and comments. Thanks for watching. And I will see you tomorrow. Thanks again. Bye