 And hello Hector and JEC good afternoon for me and just waiting on YouTube to get started Hello, everyone. Welcome to options with Doug streaming live daily on Bookmap discord and the book map YouTube channel at 1 30 p.m. Eastern time Before I get started 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 The focus of my presentation Is options order flow the impact of options markets on stocks and futures and the influence of market maker hedging flow on price action? I have a two-step process for trading and the first is planning and I use positional analysis I look at how traders and market makers are positioned to 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 our process is execution and I look at real-time order flow and book map and Real-time market maker hedging flow and spot gamma hero to confirm my thesis And just to be clear. I am talking about but I will be talking about setups And I will be talking about setups and underlines, but they can be taken any number of ways with future shares or options and Again, my planning process is based on the options market and Questions and comments are welcome and I will be watching the option stash dug chat channel and Discord and the chat and YouTube for your questions to comment So please post it'll make it more interesting for me and hopefully for everyone else as well all right, let's get started and JEC says the morning was fairly boring. I mean honestly And that that's good, I'm not looking for excitement and trading I'm looking for Just to make money and no stress All right, let's get started What I want to cover today News items then I'll go through my positional analysis and then I'll look for setups talk about setups So first of all news economic data yesterday Amazon reported earnings after the market closed and I believe Amazon is trading down a Little bit. Let's see Yeah, Amazon is down around three and a half four percent so far today. So unlike some of the other large cap tech earnings Amazon was Initially moved higher, but then moved lower All right, so that is that was yesterday and then today today the PCE and Consumer sentiment came out PCE data at 8 30 a.m. Mr. Eastern time Consumer sentiment at 10 a.m. And there wasn't much of a reaction for PCE, but I don't know if it was consumer sentiment or not But the the market did rally Around 10 a.m. And we'll take a look at that in just a minute And both of these numbers were in line with expectations and also previous reports. So nothing Nothing new there really and then next week of Course the FOMC meeting is on Wednesday or Tuesday and Wednesday the announcement of news conference on Wednesday and Then the employment report comes out on Friday at 8 30 a.m. Mr. Time So I'll talk more about that next week and then also next week AMD and Apple both report earnings. So again, I'll talk about All of that in more detail on Monday All right, let's start with a positional analysis now. Let's take a look at charts. So this is book map the ES futures and a very bullish day and The levels that are in place shown on this chart and I actually I'll talk about that in just a minute Let me go take a look at a larger time frame first. So this is SPX This is a thinkorswim Chart just showing SPX price and key levels for the day So the purple lines are showing the lower and upper edge the expected move for the week That's the purple dash lines there and then this Blue dash line is showing the lower and upper expected move for the week for the day And note that SPX is trading above the lower of the upper edge of the daily expected move for the week All right, so That's SPX. Those are the expected moves again for the day and the week And now let's take a look at some of the key gamma levels. These are shown on the chart These are provided to spot gamma subscribers For a variety of trading platforms here We're looking at thinkorswim and this is the put wall. I'm going to go over some of the key levels today so here's the put wall and That is also the key gamma strike at 4,000 and the put wall is the strike with the largest net negative gamma that can be expected to act as support and the Absolute gamma strike or the key gamma strike is the strike with largest absolute gamma And here's the volatility trigger and this is spot gamma's proprietary gamma flip level below that level Market makers position on the gamma curve is negative and they have to trade With price to hedge their delta exposure in a negative gamma environment and then on the other hand Like the current environment market makers position market makers position Above the volatility trigger that is positive gamma So market makers position above the volatility trigger is positive gamma and that means they have to trade against price to hedge their delta exposure So above the volatility trigger Market makers trading tends to subdue volatility and below the volatility trigger it tends to enhance or increase volatility and RJ asked did you set the expected daily move from the open data or the previous day close and this is from the open today? so I took the Expected move for the day At the open at 20 plus or minus 22.5 points and the opening print For spx. I believe it was about 41 29 So those are the numbers that I used for the these blue lines here light blue lines All right, so there's the put wall the volatility trigger. That's very important to understand how market makers Are positioned on the gamma curve and how they may may react and Then here's the call wall at 4200 and That's the strike with the largest net positive gamma and that can be expected to act as resistance So those are the primary daily levels that I follow the put wall the absolute gamma strike the volatility trigger and the call wall Shown on that chart Now let's see what levels are in play for today with a another think or swim chart This is a one-day one-minute chart showing the key levels so here Below is the volatility trigger and note the 41 50 and 41 60 level We're both noted as resistance levels and the spot gamma am founders note and the 41 60 Did act as resistance earlier today and that actually set up a very good short there And in an otherwise bullish day and Then here's the call wall up at 4200 So those are the levels that are in play for today and primarily In focus is the 41 50 and the 41 60 level All right, let's go to book map now and we'll see the same levels I've got two columns of notes here First of all these are the spot gamma cloud notes again These levels are provided to spot gamma subscribers for a variety of platforms And here they are for book map. These are again cloud notes that are updated automatically and sometimes there's a slight difference in the Well, first of all, there is a difference in the price between ES and SPX that varies from day to day and right now it looks like spot gamma is using a 19-point difference and I calculated that as just slightly lower at 18.75 so here is this Resistance level that did act as resistance earlier today and I'm showing it just One tick lower and here's the 41 50 levels. So I'm showing Levels in my cloud notes column here the C levels I'm also showing big ground numbers in ES. There's the ES 41 50 and then finally There's the spy volatility trigger at 411 So those are the levels that are in play for today and note that this spy 41 11 was Support more or less this morning before the market opened and Price has taken off from there All right, so that's the S&P 500 now. Let's take a look at the NASDAQ and Again, one of the key takeaways from this chart is both the ES SPX and spy are both all trading above the volatility triggers SPX above the 41 10 volatility trigger and spy above the 411 volatility trigger All right, let's take a look at NASDAQ now I'm going to take a look at a similar chart for QQQ here. This is again thinkorswim showing the level so to earn play for today and This is the QQQ volatility trigger at 321 and Note now QQQ is trading above that level and NDX the the volatility trigger is Way further down at 1277 75 12775 So in both NDX and QQQ right now are above their volatility triggers All right, so that is QQQ and there's also An NDX level that was in play today and we'll see that on the NASDAQ chart that's this 13,200 that's an large gamma 2 and 2 indicates that it is The the scale of significance for the gamma levels 1 through 5 being the high 1 being the highest 5 being the lowest So it's a fairly important level and it did act as resistance earlier today plus a price target for the setup that I posted in discord this morning this reversal off of the QQQ 319 level that was a hero divergence and There was a second entry point pullback to the 13,000 NQ 13,200 level So the QQQ levels that are in play for today. There's the 320 That is the key gamma strike and again. There's the 321 volatility trigger in the NDX level that 13,200 level and just to note spot gamma is using their same difference between ESPX which is about 18 and a half to 19 points and the NQ NDX difference and that difference is much larger for NQ and NDX right now I have NQ minus NDX at 75 points So that is why Spot gamma is showing this 13,200 level down here and I'm showing it up here, which is the close to the correct level So if we just check Check the price for NDX right now, and it's just right at 13,200 as shown on this chart here So this is the correct level with about a 75 point difference so those are the levels that are in play today the QQQ 319 on The low end and it looks like QQQ 322 on the upper end And then the 320 key gamma strike and the 321 volatility trigger in between All right, so that is the S&P 500 and the NASDAQ Now let's talk about shifts in levels and there were quite a few all bullish So first of all for SPX The volatility trigger did shift higher from 49 yesterday to 4110 today and one thing in note is The volatility trigger for SPX has hovered around 4100 ever since the April April monthly options expiration last week on the 21st so for this week the SPX volatility trigger has really hovered just around 4100 above and below All right, so that's SPX that was the only level that shifted higher and for spy the volatility trigger also shifted higher The call wall shifted higher and then the key gamma strike shifted higher so again all bullish and then finally For QQQ every key daily level that I follow all shifted higher Volatility trigger put wall call wall and key gamma strike all shifted higher So that's very bullish for QQQ All right, let's take a look at The gamma levels now and we'll see where those levels Come from So let's go to and we'll start with SPX What this chart is showing is the absolute gamma levels for SPX 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 And this is market showing market makers position at these strikes So for SPX here Excuse me. Here's the key gamma strike Or absolute gamma strike And that's pretty obvious and that's also the put wall strike with the largest net negative gamma expected to act as support and then Here is the call wall the strike with the largest net positive gamma that can be expected to act as resistance And then those note also the significant significant amount of gamma at the 4100 and the 40 150 level Alright, so that's SPX Let's take a look at spy. I'm gonna zoom in on this so for spy 410 is the key gamma strike And there it is right there that strike with the largest absolute gamma 400 is the put wall Strike with the largest net negative gamma and then the call wall is at 420 Strike with the largest net positive gamma So the floor at 400 and the ceiling at 420 at least for right now and Again, remember the call wall and the key gamma strike all moved up from yesterday All right, I usually have to do a refresh before I look at the Ndx and qqq so I'll go ahead and do that So go to Ndx now All right, so for Ndx there is the 12 975 strike and that's the call wall and the key gamma strike And it's really the only strike that is seriously in play for Ndx Note also there is somewhat of a build of gamma at the 13,000 level And also at the 13,200 and again, this is where Ndx is trading currently around that level Well, let's take a look at qqq going to zoom in on this chart So first of all for qqq now the put wall is at 318 Strike with the largest net negative gamma and here's the key gamma strike at 320 and Then the call wall oops Up at 330 so that was a pretty significant move higher In the put wall from 310 to 318 as well as the call wall from 320 to 330 And one other thing to point out See if I can find it Spot gamma made a note of this this morning in the AM founders note Noting the see if I can zoom in on this So what this chart is showing is volume traded. This is from yesterday in the with the white bars and then the open interest change with the blue bars and what they were pointing out is the small amount of Open interest Versus volume at the 320 level and then a little bit of a build an open interest at the 330 level Shown by the blue bar and they were indicating that there was this was indicating a roll From the 320 level to the 330 level Which is bullish longer term bullish All right, let's take a look at one other thing now and I'm gonna go back to SPX Take a look at the Vanna model and this is for today and this chart looks has shifted back to the way it looked in Past days or last week, you know the last but really all the month of April where The spot gamma gamma index has been positive Market makers position on the gamma curve has been positive for most of the month of April So what this chart is showing is? How market makers delta notional and I'm talking about the light gray curve here delta notional Changes with changes in price that shown on the horizontal axis and delta notional shown on the vertical axis So this is showing me that as price increases Market makers delta notional increases and they have to sell futures as price increases to hedge their delta exposure And that's typical of a positive gamma environment and then the Pink purple line is showing how market makers delta notional changes With changes in price and implied volatility and that's the Vanna effect All right, let's let's compare how this has changed From the last couple of days. So remember yesterday and the day before on The 26th and the 27th at the beginning of the day Market makers Position on the gamma curve was negative the SGI Spot gamma gamma index was negative So I'm going to look at yesterday now and note the shift in curve in the curve this is really indicating more that as price increased and Implied volatility increased Market makers would have to sell futures to hedge their delta exposure So that's the 27th and there's the 26 So from the 26 negative gamma position 27th negative gamma position and today Their gamma position shifts back to positive and The Banna model shifts back to the way it has been For again most of the month of April Well, let's take a quick look at the data And as I mentioned before I'm going to focus on The spot gamma gamma index since it's been consistent for quite a amount of some time This is a proprietary and index and it's a measurement of the total gamma total amount of market gamma and a positive number indicates market makers position is positive and That tends to subdue volatility as I've mentioned before since they're trading against price to hedge their delta exposure All right, so given all this my thesis for the day was bullish based on the increase in the Key daily levels primarily for spy and qqq and then also looking for Lower volatility and a smaller trading range today All right, let's take a look at some setups now and first I'm going to go to spot gamma hero and This is the for those of you who may not be familiar with this chart This is hero hedging impact of real-time options and RJ. I'm going to have to take a look at Your question later. I'm trying to watch two chats and talk about a lot of stuff at the same time All right, so this is the hero indicator from spot gamma What I'm looking at here is the total signal for S the SB 500. This is showing the combined signal for SPX spy Xsp and ES futures and Xsp is not significant. So this is showing Just SPX spy and ES futures The purple line or the white line is showing price and this looks like it's in terms of SPX and Then the purple line is showing options trades for all of those instruments combined into one signal and the market maker hedging activity so that is the combined signal and let's just take a look at the Individual components of this and then we'll focus on this chart So first we'll start with SPX and let's we'll note right now This notional value is minus 240 million is shifting pretty quickly minus 220 million so shifting Less negative. All right, so that's the total signal And let's take a look at First of all SPX at minus 396 million Then we'll take a look at spy minus 1.5 billion and then ES futures and this is a Recent addition to this signal and it looks like it's providing pretty significant value To that total signal. So there for ES futures This is a positive value market traders are Selling puts and or buying calls. So the total signal Is what we'll look at So I'm going to zoom in on this chart and we'll look at a couple of setups So first of all in the morning This hero signal was confirming along from the open Looks like there was a dip in the hero signal but overall Heading up and I just usually look at the general trend of hero so heading up Confirming the long as price approached that 4160 SPX 4160 level Let's just see what traders were doing. I'm going to separate outputs and calls So they were buying calls from the open this provides more clarity So from the open Traders were buying calls Net and it looks like that was mostly ES futures. All right, let's go back and take a look at book map now Start at the open here I'm going to go till about 11 o'clock So there's the bullish setup. There were a couple of pullbacks the first one to the 4150 level again as traders net net were buying calls Another pullback just right after the 10 a.m. Consumer sentiment data Right back to the point of control. That is the purple line That increases with that large volume dot there And note the bullish order flow shown by this rising dark blue line and also the green volume dots showing market buy orders and note how as price approaches this 4160 level cumulative volume Delta levels off and actually drops a bit here even as price was making what appears to be in close to an equal high in this setup a great Short actually wrong tool. Let me get the rectangle Setting up the short right here This double top at the 4160 level. So first of all, we have a long confirmed by traders buying calls in the SMB 500 Kimla to volume Delta rising market buy orders and Also, note the rising yellow line there the move higher was fueled by buy-stop orders And that usually takes a little while to Get going and then one thing to note for the next setup which which was a short is that larger traders Were fading the move Shown by this falling light blue line. That's iceberg orders orders that larger traders used to hide their size And that's pretty typical. They were larger traders will Sell strength and buy weakness All right, so the first set up along that I just talked about confirmed by Kimla to volume Delta confirmed by hedging flow order flow and also Buy stop orders fueling the move higher. All right, let's take a look. Let's go back to hero now And I'm just going to scroll a little bit But I got rid of that Scroll a little bit. So again, remember that CVD made a divergence lower even as price made just about an equal high larger traders have been selling and then finally We'll go take a look at hero come back to the total signal and note the divergence and Hero here so hero starts making lower highs and then Makes a significantly lower high and Then price follows so even though I was bullish for the day. This was too much to resist. I Really like these divergent setups So there was a short a Long confirmation short divergent setup Then a confirmation long around 11 a.m. Eastern time and Hero provided good signals for the first long the divergent short and this confirmation long All right, let's see where let's go back to ES now. Take a look the whole day, right? So now price again, here's this Reversal higher Again right at point of control at about 11 a.m. As traders were taking positive Delta positions and This continues to be fueled higher By buy-stop orders and then order note that the cumulative volume Delta Shifts higher again around 11 a.m. And you can see for this reversal lower The pink volume dots aggressive sellers coming in and Then as price reverses higher the green volume dots aggressive buyers coming in So confirmation long divergent short and then confirmation long again All right, so that's the S&P 500 and let's take a look at Nasdaq now All right, so let me take a look at look at discord and Jec says really interesting shift in S&P spy the last few minutes as we shift to a total negative signal For first time this morning. So let's take a look We'll go back and take a look at this At hero and again remember we're on the total signal here So and now it has shifted back to positive for the day So I think Jec was talking about the negative signal maybe down You know down around here. So the shift. Let's see if we can find this. So here's the zero line right here's the zero line for For a hero for the combined signal so right yeah right around Just before between 13 150 and 2 p.m. Eastern time so right now the signal is hovering around zero All right, let's take a look now RJ wants to take a look at SPX So we'll go back and take a look at SPX So SPX was more bearish remember we saw that ES ES futures was very positive last time we looked at was positive 1.6 billion the notion of value. So SPX Negative and note the divergence short At 41 60 was even more clear just looking at SPX so total is negative for SPX Well, let's take a look at the NASDAQ now And if we have time at the end we'll come back and take a closer look at the SMB 500 and see what the zero DTE traders are doing So first I want to look at qqq and I'm going to zoom in on this So this is what I was looking at in the morning And let me just see what I so this is This is about what I posted in And discord this morning that set up this nice long from 319 so here is the qqq 319 and the reversal long at that level as He-roller is rising so there's the Divergence long For either in Q or qqq So I'll talk about Set-ups that you could have taken for both So first of all, let's take a look at book map and we'll go to in Q So here's the setup and in Q And it takes a little while for order flow to catch up and this actually moved a bit higher than I thought it would So there's the reversal higher at 319 No, there is a shift in order flow Sometimes not quite as clear as the shift in the ES But note the pink dots Pink volume dots on the way down And then aggressive buyers start to come in with the green volume dots and then there was a Pull back another alternate entry second entry at around the 13,200 level in Q 13,200 level And at that point the buy-stop orders Help to feel the move higher up to the 321 level Here's the This is the qqq volatility trigger at 321 and then the 13,000 NDX 13,200 level and then also almost to the qqq 322 and the NQ 3 13,300 So there was a again. This is the setup that I posted in Discord and this was a really good level to lean against Always like to see a level in play and it was the these qqq levels were definitely in play And note also this the qqq 320 initially acted as resistance All right, so that was one way to take that trade and that was the first trade in And The Nasdaq and let's take a look at one other thing. I'm gonna go to think or swim so another way to Enter this trade was just to buy a qqq call And it was pretty cheap 72 cents there's the long call You just zoom in on this a little bit more and just kind of an easy set it and forget it Set up so right now If I'd held on to it The profit would be a hundred and seventy nine dollars so more than double your money And there it is taking profits at the the top of the range And the profit one seventy two again double More than doubling your Investment there your trade All right, so that was a couple ways to trade that With futures or you could trade qqq shares or this qqq call and This is a zero DTE call that expires today All right, let's take a look now at The next setup of the Nasdaq go back to hero and there's a divergent short At around ten thirty Let's go back to NQ now and that was the time to take Take profits and you're in the call All right, let's go back to book map now so here's the The short setup note the shift in order flow here note both the Cumulative volume Delta starts falling and also sell stop orders shown by the yellow line Start firing off moving helping to feel the move higher as traders were taking negative Delta positions And if you miss this first entry right here at this 13200 level in DX a secondary entry at the QQQ 321 level and let's see what we See if there was any confirmation for a long setup This is as much as I wrote down. So let's take a look at at hero for the day and not really much so those are the two setups if you're just using hero as a Confirmation or a divergence so the confirmation to actually diverge it's long in the morning and diverge it short After that and that was enough for me to get data along with the short and the S&P 500 that I showed All right, I've got a few minutes left and as you can tell I have I'm really focusing more on futures. So I hope that's okay This is how I'm kind of managing my time In the morning is just really focusing on the futures plus I'm seeing great signals both in book map the order flow as well as hedging flow That provide great setups So let's do take it we'll take a few minutes and look at stocks So Apple there was a divergent short not much not as clear as the Indices but Divergent short maybe more of a confirmation short Actually, if we we zoom in a little bit we can see that Hero started making lower highs before price did so let's go take a look at book map for Apple and Note that 170 is the call wall and the key gamma strike and And price did not quite make it up there and note the high liquidity at that level for those of you who may not be familiar with Book map. This is resting liquidity. These are Cell limit orders Often act as a magnet for price, but in this case price reverse lower before As traders were taking negative delta positions. All right, the next is Google and for Google I noted a confirmation short And this was from this morning and that was just First thing in the morning, then a pretty choppy signal after that so up until about 10 10 15 Confirming the short took a quick look at book map So there's Google and the next Metta and let's go take a look at Hero again here's meta and And strong confirmation for short in the morning then long in the afternoon so this set up a good this was a good short set up in the morning and Note the I've separated out the puts and calls and note both traders were selling calls and buying puts shown by the falling the falling orange line shows Shows that traders were selling calls the falling blue line shows that they were buying puts and Keep in mind that meta was up significantly this week Traders are buying calls. Let's take a look at something else. I'm gonna go to meta So this is every Friday. I look at this Look for potential call gamma unwinds and note that I have sorted this list by next expiry gamma percent and Note, this is today So this is showing for meta and I really I have snow on my watch list I don't really don't trade it or follow it. So met us the second on the list with 35 percent of gamma expiring today and let's take a look at the Composite view chart for meta and notice it is call dominated So in the region of the price that's trading now this green color indicates call domination and These calls 35% and that's a lot of gamma expiring today and those calls will quickly lose value During the week when traders buy calls market makers sell the calls they have to buy They have to buy stock to hedge their delta exposure Then due to charm the change in delta as time passes Those calls start to lose value quickly especially on expiration today, which is today and market makers can Can sell their long stock edges and especially if traders are selling their calls. They're taking profits as well Which was what was happening this morning? Let's go back and take a look at hero. So in the morning, this was pretty expected This price drop And let's just see the 240 level The 240 level it was the call is the call wall and the key gamma strike So the call wall acted as resistance as expected So for meta That was a pretty predictable short Call gamma unwind As traders were selling calls and price reverses At the 240 call wall level And now it's headed back up price traders started buying calls again. They couldn't Couldn't get enough. So they started buying calls again And price is now heading back up to that 240 call wall key gamma strike All right. So hector ask What factors do you consider to operate on an options market versus futures? I'm not sure I understand your question. Are you asking about Whether you would trade that and did the nasdaq set up that I showed whether It's better or whether you could trade QQQ options or nasdaq futures So not necessarily. So here's Here's the way I think about it And this is kind of personal for me. I tend to Um Maybe over manage futures trades. I want to I want to get in and Get to auto break even very quickly take profits on on one One contract get to break even and then hit a profit target pretty quickly. So I tend to Often take profits a little bit too quickly on futures But with an options trade you can just like I said set it and forget it the there's no No stop order It's a defined risk trade And you have to be willing to Let price move around So that that was based on my decision. So And you could trade both Seeing the setup go take the Um You know take take both of them, you know true trading platforms and your trading platform get long Get to auto break even then then buy a call and you're you're Taking advantage of that Initial setup in futures and maybe you can take profits get back in As as well as hold your long call for a longer period of time So it's more a personal trade management kind of thing Right. So that's meta And let's take a look at Nvidia We'll go take a look at hero Actually, we'll take a look at microsoft microsoft confirmation long and short Let's take a quick look here at microsoft also call diamond Combinated dot call dominated Above the 305 level not as much gamma expiring today about 25 percent Let's go actually let's go back to hero and see what traders are doing So they're selling calls And buying puts Notion of value negative for both So another called Call gamma unwind Here's Nvidia And confirmation long Right around 10 a.m Go take a look at book map. So there's Nvidia Confirmation long took a while to get going. This is pretty typical of Nvidia is that it does chop around Often for the first 30 45 minutes And let's take a look at tesla Long setup today in tesla Go take a look at hero for tesla And not quite a stronger correlation between hero and Price action after Maybe around 10 30 as usual in in tesla. Let's just see what traders are doing So net they are Selling puts and buying calls All right, let's do a quick check on the Indices So here's the smp 500 And net notional value here for all the spx spy and es futures Is slightly positive 72 million And quickly moving around now 95 million And note how price is leveled off As hero has Also leveled off and starts Starting to move lower price as Leveled off Let's take a look at book map and then we'll we'll call it a go back to the sp 500 All right, so now price is trading below just below the 41 60 uh resistance level As heroes started to move down Take a look at nasdaq And price is chopping just right around the 13200 level in dx All right, that's all I have I want to thank you for watching. Thanks for your questions and comments Everybody have a great weekend and I will see you on monday. Thanks again. Bye