 Hello, everyone. Welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 p.m. Eastern Time. Excuse me. Before I get started, I need to go through the disclosures. General disclosure, all bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk disclosure, treating futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. Here's my contact information. The best way to get in touch with me is through Discord. And my name on Discord is Doug P. And also in Bookmap Discord, there's an options-doug-chat channel. That's a great place to post questions, comments, and content related to the topics of the channel, which I'll go over in just a moment. I'm also on X, formally known as Twitter. My name there is at Doug Plus. The focus of my presentation today in the focus of the options-doug-chat channel 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 at 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 of 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 when I talk about setups today, I will be talking about setups in an underlying asset, like the S&B 500 futures or Apple or Nvidia shares or stock. And setups can be taken any number of ways. For example, with the S&B 500 setups can be taken with ES futures, SPY shares, SPY options, SPX options, or even ES options. Questions and comments are welcome, and I will be watching both the options-dog chat channel and Discord, as well as the chat and YouTube for your questions and comments. So please feel free to post. All right, my agenda for today, what I want to cover go over news items, economic data, events. For the rest of the week, then I'll go through my positional analysis, then I'll review setups from this morning, and then we'll take a look at the live market. And when I get to the live market, if anyone has any stocks they want me to take a look at, please let me know, and I'll be glad to do that. All right, so news items, I don't believe there were any key news items today, maybe a Fed speaker. Tomorrow, Wednesday, there's services PMI that comes out at 9.45 a.m. and 10 a.m. Eastern time. And then on Friday, the big event of the week is the employment report that is out at 8.30 a.m. Eastern time. That's the employment report that comes out at the first Friday of every month. Excuse me. All right, let's get started with positional analysis. I'm going to start with the ESB 500. And before this is the ES futures in book map. And before I take a closer look at this chart, I'm going to take a look at a larger time frame. I'm going to go to SPX. This is a 30 day one hour chart for SPX showing price and key levels. So first of all, here is the, by the way, am I streaming on on Discord? Looks like I may have lost that. Hold on just a second. Okay, so it looks like my stream on Discord, the video is up again. All right, Truman says today there was a jobs number that came in hot, market reacted. Okay, I'll take a look at that. It was a busy morning, still trying to solve my computer problems. I think I may have something. Anyway, spent the morning doing that. All right, so here's the SMB 500 SPX index. 30 day one hour chart. This is the September 15 monthly expiration, big expiration, call dominated. And the downtrend, that's when the downtrend began and price after a brief, brief up move last week continues lower down toward the put wall. I'll go over that in just a moment. All right, so let's take a look at some levels now. First of all, the dash purple lines are showing the lower and upper weekly expected move. And SPX is just above that lower weekly expected move level. And then this is the lower and upper daily expected move shown by the dash blue lines SPX trading well below that level, the lower trading well below the lower daily expected move. All right, both those levels are based on the options market showing a one standard deviation move up or down 68% of the time SPX or whatever you're looking at should trade within those levels. All right, there are also spot gamma levels on this chart shown by the dark red lines. Let me point out the key daily levels. First of all, 4200 is the put wall. That's a strike with largest net negative gamma that can be expected to act as support. And above that is the 4300 absolute gamma strike. That's a strike with the largest absolute negative and positive gamma. Above that is the volatility trigger at 4350 that a spot gamma is proprietary gamma flip level. Below that level, market makers position on the gamma curve is negative. In a negative gamma environment, market makers have to trade with price to hedge their delta exposure and that tends to enhance or increase volatility. On the other hand, above that level, market makers position on the gamma curve is positive. In a positive gamma environment, market makers have to trade against price to hedge their delta exposure. And that tends to subdue or decrease volatility. Note that SPX is trading well below the 4350 volatility trigger level. So definitely a negative gamma environment. And then finally, there's the call wall at 4450. That's the strike with the largest net positive gamma that can be expected to act as resistance. So those are the key daily levels and note they there were no shifts in levels for the SPX. Comparing today versus yesterday, there were no shifts in levels. Hold on just a moment. Okay, so those are the key daily levels SPX trading below the lower daily expected move and the volatility trigger but still above the lower weekly expected move and the put wall. And let's just take a look at the levels and play for today with a one day one minute chart. This is SPX one day one minute showing that SPX is again is trading above the lower weekly expected move but below the lower daily expected move and also again below the volatility trigger at 4350. All right, let's take a look at book map now and book map I have my own cloud notes. Oops, a bit too much. So I have my own cloud notes and book map here shown in this column. I have the labels on this column and I use a price lines add on available in the book map marketplace that draws the lines and places the labels. So I have the SPX levels. There's the 4200 put wall and various support levels. And note there is a difference between the price of ES and SPX. It's about 35 points today. That's what I'm using. Let me just check on that. So yeah, it was right right around 35 so ES minus SPX today is right around 35 points. I also have SPI levels on this chart. So here's the SPI 426 level that did act as more or less as resistance today along with VWAP and also there's a 4276 level. You can't see the both labels, but SPX 4276 level that was noted as resistance today, I believe or no, it was I think noted as support but acted as resistance. And then here's the also you can't see the label, but the white line is showing the SPI 425 put wall. So the SMB500 training below the SPI put wall but above the SPX put wall. All right, so those are the levels in play for today. Again, no shifts in levels for SPX. For SPI, there were minor shifts in levels actually for the volatility trigger the shift lower was was minor from 431 to 430. However, the call wall shifted pretty significantly lower from 450 to 432. So in the last three days, the SPI call wall has shifted from 460 that was on Friday to 450 yesterday to 432 today. All right, so pretty significant move lower for the SPI call wall. And that level not 432 is closer to being in play, but the the put wall is more important. And again, the SMB500 training below that SPI 425 put wall. All right, so again, those are the levels in play for today. So I talked about shifts in levels and also the the levels in play. Let's take a look at NASDAQ now. So this is the NQ futures and book map. And before I take a closer look at this chart, I want to isolate first of all QQQ levels that are in play for today. So here's QQQ and a one day one minute chart. Note that 360 is the absolute gamma strike and also the volatility trigger. So QQQ trading below that level above that there the 361 level did act to support resistance a few minutes after the open. And then this 355 or level combo level just above 355 did act more less as support. And now the QQQ trading below that level. All right, so those are the levels in play for QQQ. Let's take a look at NDX. And there's that same same combo level acted to support and now NDX trading below that level. Let's go back to NQ. So again, I have my own cloud notes showing QQQ levels. There's the 360 level, the 361 that acted as resistance. There's that combo level NDX QQQ combined, gamma weighted open interest at that level. So this morning this 361 as well as the lower daily expected move for NASDAQ did act as resistance. And there was a great, great divergent setup this morning. We'll go over that in a few minutes. All right, so I guess support really for both the SMB500 and NASDAQ yet to be determined for today. All right, shifts in levels, there were no shifts in levels for NDX or QQQ today. All right, let's take a look at gamma notional now to see how market makers were positioned on the gamma curve at the beginning of the day. And this will give us a sense of how market makers may be expected to react to changes in price and applied volatility. So this is gamma notional, I look at SPX, SPI and QQQ. Note all these numbers are negative, still quite negative for SPI minus 2.146 billion. These numbers did shift higher than yesterday, so less negative, but still quite negative. So this means that traders are long puts, market makers are short puts. This is typical in negative gamma environment, and market makers have to trade with price to hedge their delta exposure, and that tends to enhance or increase volatility leading to wider trading ranges and larger moves. A less stable market than a positive gamma market. All right, let's take a look at a graphical representation of what that means. I'm going to take a look at the Vana model. This is for SPX. What this chart is showing is market makers delta notional on the vertical axis and price for SPX on the horizontal axis. There are two curves on this chart. The first the light gray curve shows how market makers delta notional changes with changes in price only. And what this is showing is as price decreases, market makers delta notional will increase. They always would remain delta neutral, so they have to sell futures to hedge their delta exposure. And then the purple curve adds implied volatility to the equation. So that's showing as price decreases and implied volatility increases, market makers have to sell futures to hedge their delta exposure. So when traders trade options in SPX and SPY, market makers hedge those trades. They take the opposite side and they hedge those trades with ES futures. And again, they want to remain delta neutral. So if traders are buying puts, for example, market makers are selling puts, that's a positive delta position, and they have to sell futures to hedge that those trades to hedge their delta exposure. And that does work the other way around. If price increases, implied volatility drops, those puts start to lose value and market makers can buy back their short hedges. All right, let's take a look and see where SPX is trading right now. So I've got SPX right around 42.26. So that's pretty far down this curve. There's 42.25. That's pretty close. So what this is showing is as price has decreased today. Let's take a look at implied volatility. So let's take a look at VIX. So we know that price has decreased. Go back and check the chart. Yep, price has decreased for SPX. Let's take a look at VIX. Implied volatility has increased today, looking at VIX as a proxy for implied volatility. So this means that market makers have had to sell futures to hedge their delta exposure. So this is the effect of being in a negative gamma environment tending to enhance or increase volatility when market makers are trading in the direction of price. Let's take a look at SPI. Very similar curve by the way this curve with a steep skew to the left is very typical of a very negative gamma environment. SPI trading right around 421 today. So that's right around here also in this very steep portion of the curve 421 indicating if price continues to drop, implied volatility intends to increase, market makers will have to continue to sell futures. And then finally let's check on QQQ trading just above 354. So also on this very steep portion of the VANA curve. Let's take a look at one other thing. I'm going to go back. I want to take a look at this gamma model. So this is for SPX. And when I talk about the gamma curve, this is what I'm talking about this curve right here. And the key levels are shown on this chart. So here's the football for example. And the important thing to note here is this big kink in the in the gamma curve here indicating that at this certain point right around let's say 4150 market makers are fully hedged and they will have will not have to continue to sell futures as price drops. And in fact they may be able to buy futures slightly but will this steep VANA effect that I just talked about will will cease if price reaches down here and the gamma model remains like this. Alright so my thesis for the day, first of all looking for higher volatility. There were not enough shifts in levels to make any determination about a directional bias but really what is driving price is is treasury yields. So let's take a look at give me just a moment here. So notice the you know there's this steady increase. This is the 10 year treasury yield futures slash 10 y. And this is what is spooking investors and traders is this increase in yield. So based on this as long as this continues to increase this is going to really be a headwind for for equities for markets. Alright let's take a look at some setups down. I'm going to start with the ESP 500 and I'm going to start by looking at what options traders have been doing today. This is the hero signal hedging impact real time options. This is from Spot Gamma available to Spot Gamma subscribers. What this chart is showing is first of all price with a white line for SPX and the hero signal with a purple line for a combined signal of SPX, SPY, XSP and ES futures. So this is taking options trades and market maker hedging activity for all those four symbols combining in one symbol and showing a signal again showing how traders are buying or selling puts and calls and market makers are reacting. So just looking at the big picture here you can see that traders were taking positive delta positions from the open and for about a half an hour they were going in the direction of price then price reversed lower and options traders really were no longer in charge. This is for the ESP 500 not necessarily the case for other instruments that we will look today and it looks like around just after 12 noon options traders got on board with the move lower. Let's see what they were doing today. So they um let's zoom in on this tool about 12 30 so up until about 12 12 30 I don't know why I did that sorry about that let's zoom in hope we don't all right so traders from the cash open that shown right here cash open 9 30 a.m eastern time traders were pretty aggressively buying calls this is a pretty high number 4.7 billion that's notional value pretty high number traders traders aggressively buying calls not doing much with puts the blue line is essentially flat notional value minus 250 million versus 4.7 billion for call buyers versus put buyers all right so that's the ESP 500 so we know that options traders for the ESP 500 were not really driving price today and then maybe at least in the morning it looks like they are uh got on board now right around uh maybe somewhere between 12 and 12 30 so they started buying puts more aggressively and they stopped buying calls and started selling a few calls but so far net for the day the total signal is still still positive that's based on the the activity in the morning all right let's go take a look at book map take a look at the ESP 500 so in this case we are really relying on order flow to determine who and who's driving the market today so here's that first move up after the cash open up to just above this 426 level as well as the 4276 SPX 4276 and then this must have been the the number that Truman was talking about right at 10 a.m sharp drop aggressive sellers that shown by the magenta volume dots let me tone down the the heat map so we can see that a little bit more easier so the volume dots are showing by minus cell market orders so it's a delta uh green dot indicates the more buyers than sellers a magenta dot indicates more sellers than buyers and note the aggressive sellers come in at that level right at 10 a.m and take price lower down to this 4 42 25 level it's about a 50 point drop from 4276 to 4225 those are SPX numbers and note that that large traders were selling the move lower with iceberg orders that shown by this light blue line in the sub chart also sell stop orders were helping to fuel the move lower that shown by the following yellow line and then also cumulative volume delta is moving lower as well as price reverses from that level so it's aggressive sellers large traders with iceberg orders and sell stop orders fueling the move lower all right so that's the sb 500 let's take a look at nasdaq now so just like the sb 500 the first 30 minutes were pretty bullish a lot of aggressive buyers there moving price up to the 361 level as well as the nq lower daily expected move shown over here then aggressive sellers come in shown by the very clear shift from green volume dots to magenta volume dots let's see what options traders were doing we'll go back to hero and i'm going to go to this is a combined signal for ndx and qqq qqq is driving the most of the action here but we can look at that this combined signal for completeness going to zoom in on the morning a bit and here's a great divergent short pretty similar to yesterday is options traders start moving first they start taking negative delta positions so initially up until about 955 they were taking positive delta positions the hero signal shifts lower they stop taking positive delta positions start taking negative delta positions and then price reverses lower oh maybe five minutes five to ten minutes later right at the level that we just looked at the qqq 361 and the nq lower daily expected move all right let's go back to book map so we know that just as price was approaching that level options traders started taking negative delta positions looking at any qqq round over level or any of these levels as persistent potential supported resistance so we know that again that traders are taking negative delta positions order flow shifts buyers are exhausted sellers come in also note the falling light blue line large traders selling with iceberg orders and then finally sell stop orders helped to fuel the move lower down from 361 qqq 361 so far to just above qqq 354 so much better setup much cleaner uh easier to read setup in nasdaq than the sub 500 today and aggressive sellers large traders with iceberg orders as well as sell sell stop orders and options traders all helping to fuel the move lower in nasdaq all right let's take a look at some stocks now i'm going to start with nvidia and by the way the theme for the day was reversals at key levels start with nasdaq nvidia let's take a look at what options traders are doing and note 450 is the call wall and we'll talk about the reversal at that level first of all let's go take a look and see what options traders were doing and nvidia and note i have ranked my watch list by weakest to strongest again and just uh if someone didn't see that yesterday this is the hero signal and kind of a meter indicating the or an indicator indicating the strength of the hero signal comparing it to the last 30 days that's shown by the extent of the slider it's pretty difficult to see in dark mode here but the there's the left edge the right edge and the dot the the location of the dot within that range compare is showing the strength first of all compared to the last 30 days so this is showing for nvidia the current signal is the weakest that it has been in the last 30 days that's shown by the dot then the colored portion is comparing the current hero signal to the last five days so for nvidia the hero signal is weaker as weak as it has been to the last 30 days and weaker than it has been in the last five days all right so let's take a look at nvidia first zoom in on this chart note here's the 450 level that is the call wall and the key gamma strike the did its job today acted as resistance let's zoom in on this just a little bit in the morning so nvidia makes a double top there and looking closely you can see that options traders start taking negative delta positions just oh maybe a minute or two at most as price follows we'll see what traders are doing separate outputs and calls so initially the call sellers were were more aggressive let's just zoom in on that call sellers more aggressive not sure what the cause is that sorry about that all right call sellers more aggressive then maybe five minutes later put buyers come in so market makers taking the opposite side of these trades so they are buying calls and selling puts those are both positive delta so they have to sell stock to hedge their delta exposure that's the most efficient way for that for them to hedge so when traders take negative delta positions market makers take the opposite side of those trades and have to sell futures to hedge sell stock to hedge their delta exposure all right let's put back the total signal go take a look at book map again remember 450 is the call wall key gamma strike price makes a double top actually goes just above that level but on this second test let me zoom in on this down just a bit oops so on the second test here it looks like more aggressive sellers come in so there would have been a good entry right around 10 a.m at the 450 call wall key gamma strike water flow definitely shifts bearish as options traders were taking negative delta positions and market makers have to sell stock to hedge their delta exposure all right so that's Nvidia great short setup at a level that you anticipate that should act as resistance the 450 call wall and it did its job and now Nvidia trading down below 435 all right the next one I want to take a look at is tesla right tesla 250 is the key gamma strike so again remember the theme of the day was uh is reversals at key levels so there's the 250 level that was definitely the high of the day let's go take a look and see what options traders are doing in tesla so there's the 250 key gamma strike and there's price approaches that level let's zoom in so there's price approaches that level market traders start taking negative delta positions so they're buying taking positive delta positions on the way up price approaches that level the key gamma strike the options trades consolidate then price moves lower so again another reversal at a key uh key gamma level all right let's take a look at Microsoft now so again keeping the uh keeping up with the theme of reversals at key levels there's the 320 key gamma strike for Microsoft and price did overshoot that level a little bit but eventually as price started moving lower options traders started taking negative delta positions moving Microsoft much lower so let's go take a look at book ma'am and give me just a moment I need to um give me just a moment I need to do something here okay I'm back sorry about that all right Microsoft oh tesla I'm sorry tesla taking tesla now back to hero oh did I sorry I got a lot going on let's go back to Microsoft Microsoft 320 key gamma strike back to Microsoft so Microsoft overshot that level a little bit a lot of aggressive buyers right at the open this big volume dot a lot of aggressive buyers the opening print and then price moves lower reversing at one one round number level above the 320 level but there's the 320 level price moves lower right around 10 am with everything else and Microsoft still continues lower let's take a look at hero let's zoom in on this so really up until about 10 am looking at this chart price was essentially uh flat moving up and down around the 320 level and then just after 10 am price dropped as traders were taking negative delta positions let's see what they were doing so from the open not really doing much with puts maybe buying a few puts that shifts sharply lower and they start selling calls as well so buying puts and selling calls all right now let's uh let's take a look at tesla there's the 250 key gamma strike and price reverse lower just um just below that level as options traders started taking negative delta positions around the same time as everything else looks like tesla is trying to recover back up to that level can't make it above the 250 key gamma strike very strong correlation between options trades market maker hedging activity and tesla let's go to book map all right so tesla still couldn't make it up to the 250 level before reversing lower didn't find some support of the 245 level and now heading back toward 10 down toward that level as traders started taking negative delta positions again right around 1220 just below that 250 level all right i've got one other let's take a look at amazon and notice i'm still at the top portion of this list uh with the weak hero signals so amazon was actually the second one on the list zoom in here's the 128 hedge wall and then options traders started aggressively more aggressively taking negative delta positions just before 10 a.m let's go take a look at book map so on amazon here's the 128 hedge wall and price versus lower already already starting to make move down before the 10 a.m move down everything else with everything else does a test of vwap that's shown by the light blue line vwap light blue line and price moves lower sharply lower as traders were taking negative delta positions options positions and aggressive sellers came in let's just darken up these uh make these volume dots a little bit bigger it'd be easier to see so here's the reversal at vwap aggressive buyers shown by the green volume dots up to vwap then aggressive sellers start to come in price moves lower down to the liquidity this is showing a history of the orders in the order book these orders below are uh limit by orders below price limit by orders the darker the red the darker the band there more indicates more orders looks like they did pull some let's just zoom in on that so it looks like the orders at 125 were pulled they was were acting as a magnet for price traders pulled those orders decided they did not want to buy after all then it looks like they came back in right around 130 at 125 125 90 looks like those orders were filled and they've also added orders below now down to 125 50 124 50 all right so that's amazon so all the stocks that i've talked about weak hero signal reversal near the open at key gamma levels all right let's take a look let's go back to a hero now and let's see if we can first of all let's check on the sb 500 so after reversing right around 12 10 auctions traders continue to take negative delta positions and the sb 500 looks like spx making a new low for the day heading toward the 4200 put wall that's the next likely target if price continues lower let's take a look at nasdaq so now traders and nasdaq starting to take positive delta positions and let's see what see if there are any levels in play where they're taking taking positive delta positions so let's go to book map take a look at nasdaq so not really maybe around the 354 level that is not a that's not a spot gamma level but around number 11 qqq so options traders started to take positive delta positions and some aggressive buyers are coming in shown by the the green volume dots certainly not significant let's take a look at qqq right so some aggressive buyers coming in to qqq as well right around that 354 level back to hero and let's just do a quick scan of some stocks here so apple overall like everything else negative notional value on hero amd as well continues to move lower amazon looks like in google now some options traders are starting to take positive delta positions shown by the the uptick in the hero line there so some buyers coming in starting to sell puts that shown by the rising rising blue line also positive notional value there still smaller than the call number but it is has shifted positive let's go take a look at at book map go to google so some put sellers coming in taking advantage of the drop in price higher implied volatility selling puts make sense good options traders being contrarians all right let's go back to hero the total signal go to meta looks like overall the hero signal has shifted shifted slightly higher still negative notional value for the day now it started around 1115 note the hero signal at that time often a reversion to the mean type signal let's take a closer look and see what traders are doing so right around 1115 they started buying calls and selling puts shown by the rising orange line rising blue line let's take a look at book bam go to meta all right so meta definitely found support at 300 level options traders started taking positive delta positions right around 1115 at this 300 level let's go to hero and for meta 300 is the key gamma strike right so meta finding support at the 300 gamma strike as traders start to sell puts and buy calls at that level let's take a look at see a microsoft see if there's any change no traders the only thing you can say for this is the options traders have kind of taken their foot off the gas netflix still overall negative for the day Nvidia looks like traders have taken their foot off the gas options traders finally for tesla looks like they may be starting to take positive delta positions maybe this may be a little bit of divergence here setting up in tesla zoom in on this so potential divergence set up in tesla as traders are taking positive delta positions let's go take a look at book map all right so if you're looking for a looking for a potential long and in tesla i would definitely look for a wait for a a trend break and a higher low so look for and potentially for tesla to trade above vwap or definitely some aggressive buyers coming in as well as a trend break all right let's go back to the sp500 and nasdaq and then we'll wrap it up all right so the spb 500 may be finding support around the 420 level spy 420 level that's still above the spb 500 the spx 4200 put wall note the the buyers at this level first of all in the order book the stark red band showing a large number of limit buy orders right around the right around the spy 420 level that's also es 4250 some large traders coming in with iceberg orders that's 1346 executed 12 different transactions consolidated into one number there there's 400 contracts executed those are buy orders all right so maybe indices may be trying to find a bottom today all right that's all i have my time is up i want to thank everyone for watching thank you for your questions and comments and i will see you tomorrow thanks again bye