 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. Let me go through the risk disclosures. General disclosure, all Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. First disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. And as a reminder, my presentation and the Options with Doug channel and Bookmap Discord is very focused and the focus 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. And I look at how traders and market makers are positioned in the options market and how those positions shift from day to day to help develop a thesis regarding volatility, expected range for the day, as well as directional bias. And the second step in my process is execution. And I look at real-time order flow in Bookmap and real-time market maker hedging flow with Spot Yamahiro to confirm my thesis and to find and enter trades. And finally, on-topic questions and comments are very welcome. And please post your questions in Options with Doug and Bookmap Discord as well as the chat in YouTube, the Bookmap YouTube channel. And I will watch both during the day, although I do watch Discord a little bit more closely. All right, let's get started. And let me know, I have changed the size of my cursor here, the size of the pointer for my mouse just to make it easier to see. And if that helps, there was a request yesterday. If that helps, let me know. Right now my mouse pointer is in the lower right corner of the screen. So hopefully that will help with visibility to see what I'm pointing at. Okay, so my agenda for today, yesterday I talked about news and I just pointed out some new items this week that were fairly minor. So I'm not going to go over that today. There's not much significant economic data coming out this week. So I'm going to talk about position analysis regarding the S&P 500 primarily. And then I want to focus a little bit on the 3835 SPX, 3835 strike. And that is the strike that's the SPX call wall, as well as the short strike in the JP Morgan collar. And I posted a, I guess a somewhat detailed post in Bookmap Discord about that yesterday. There were some questions. So I want to go over that today and just make sure everybody understands. And I have answered your questions. And then finally, I want to go over some setups. So to get started, let's talk about position analysis. And this is the S&P 500 futures, ES futures. And support and resistance levels are shown on the chart. And I have two columns of notes of cloud notes. This is the spot gamma cloud notes columns column. And this comes directly from spot gamma every day. It's updated automatically. And it's showing the key gamma levels both for SPX alone, like this call wall at 3835, as well as combo levels that combine SPX and spy levels. And I draw the lines for these levels manually on my chart every day. And then this column is my cloud notes. And I use an add on in Bookmap to, so I fill out a spreadsheet. It shows the level in the column. And then it draws the lines automatically. So I'm showing the support and resistance levels that were noted in the spot gamma AM founders note, as well as key spy levels, and then big round number levels in ES. So the support and resistance levels that are in play today are shown on the chart. And sometimes the levels that are noted as support actually end up becoming resistance. Like this level right here, the SPX 3850 acted as resistance this morning and price trended down past the SPX 3800 put wall and now has gone above it back to the spy 380 key gamma strike. And then now it looks like it's trending lower. And we'll look at spot gamma hero in a few minutes to see what options traders are doing and how they might be driving price action. And notice this reversal here at this high liquidity. And then all of the all these green dots as aggressive buyers start to move price higher. So those are the the key levels for the S&P 500 that are in play today. And regarding shifts and levels, I look at SPX spy NDX and QQQ every day and note the shifts and the key levels. And there weren't very many actually no shifts in the SPX and spy levels. And we'll look at the S&P 500 gamma charts in just a moment to see where those levels are. And there were a couple shifts in QQQ. Actually the QQQ volatility trigger increased slightly from 276 to 280. And the put wall dropped from 265 to 260. And that is I view that as bearish and recall yesterday the QQQ key gamma strike dropped as well. So overall big gap technology has been pretty weak the last couple of days. All right, so let's go take a look at the S&P 500 charts now. Take a look at those where those gamma levels are. So we'll start with SPX and 3800 is the put wall. And that is held steady for for a while now. And then this is the call wall. So the put wall is the strike with the largest net negative gamma. And the call wall is the strike with the largest net positive gamma. And this is simply because of the because of the that is the short strike of the JP Morgan collar. And then here's the 3850 level that acted as resistance this morning. And then the 4000 level remains the key gamma strike or the absolute gamma strike. And that is the strike with the highest absolute gamma. So that is the that's kind of the playing field for today for this week really. And spot gamma is actually looking for a range. And I talked about this a little bit yesterday. A range within 3800 to 3900. And this 3835 being somewhat of a magnet. And and they're actually looking for a pin. And here's the note pinning of the 3835 area. So that's what they're looking for. And now so that's SPX. Let's take a look at spy. And the key levels are the 375 put wall. And there's quite a bit of put gamma at that level. And then the 380 level. And this is actually the key gamma strike. 390 is the call wall. So again for spy that's the that's the playing field. All right, let's take a look at some data now. And this is the spot gamma AM founders note. Let me check for questions. Okay. And Mike asked the call wall was 3835 today. And why didn't ES capitulate there? I assume that means pin there. And I'll talk about that in a minute. And you know just because it's there doesn't necessarily mean that that what you expect to happen is is going to happen. And I'll talk about a couple of reasons why in in just a minute. So let's get back to the data now. The thing that I point out. Yeah, Trader HE NQ. Yeah, we can take a look at that in just a second. Let's look at gamma notional. And I point this out every day. And this is showing the market makers position on the gamma curve. And I look at shifts in these levels every day as well as the overall level. So gamma notional decreased from yesterday or became more negative. Yesterday SPX gamma notional was minus 339. And today it dropped down to minus 408. And yesterday spy gamma notional was minus 1552. And now it dropped and became more negative to minus 1776. And so market makers position has shifted further down the gamma curve. And I guess really ignoring that 3835 strike just looking at this, this indicates that traders are long puts, market makers are short puts, and they have to sell futures as price drops to hedge their delta exposure. And just the opposite as price rises, they can buy back their short futures as price increases. So they're trading in the direction of price, and that tends to increase volatility in a negative gamma environment. And so that's why I think it's so important to look at this every day and understand how market makers might react. And this is illustrated with the Vana charts. And what this is showing is how market makers delta notional or delta exposure changes with changes in price. And that's shown on the horizontal axis here and changes in volatility. And that's shown by the green line. And also, and that's the Vana effect. And then also changes in time or as time passes. And that's the charm effect. And that's shown by the black line. And I always draw a line through this chart. And you can just do that in your mind. I'm using a pen tool right now. And again, this is showing that in a negative gamma environment, market makers delta exposure increases as price falls. And they have to sell futures to hedge their delta exposure as price decreases and vice versa as price increases. And we can quickly step through the last couple of days to see how that has changed. And we can also look at spy and see that it's a little bit more pronounced. Okay. And I'm going to get to Trader HE's question. And then we will then I'll talk a little bit about the 3835 strike. So Trader HE wants to see NQ. And I will tell you I don't have I'm not using book map hero anymore. So I don't have that on my chart. Let's take a look at instead let's go to I'm going to go take a look at spot gamma hero. And we'll look at QQQ. So this is the this is really the the options trades that are driving NQ. NDX this I guess in theory is NQ is being influenced by options trades in NDX and QQQ. But I pretty much discount NDX. It's not the options trades in NDX are insignificant compared to QQQ. And we can go back to this founder's note and see here that the gamma notional this is for NDX versus QQQ is insignificant for NDX. So we're essentially if we're looking at hero for QQQ we're looking at hero for NQ. So let's go back to hero now. This is QQQ. And traders have been in QQQ been taking positive delta or bullish positions since around 945 950 something like that. And let's see what they're doing. So they're selling puts so they're taking advantage of the weakness in the in the NASDAQ to sell QQQ puts which makes sense. Let's see trader each he was asking asking about just after 1300 and we can take a look at that. Let's zoom in on that. And I'm going to change. Well let's take a look at we'll keep the one day look back period for the time being and then we can we can zoom in and let's take a look at the total signal. And what I'm seeing here is pretty much a confirmation of the increase. So hero remains pretty flat here as price is decreasing. And then I don't know I don't really see any lead effect here with hero. But there is a strong correlation as traders are entering positive delta positions. And let's just go back and see if there if we can get any more clues if we shift to put some calls go back to total. Let's go back to a 30 minute look back period. And then there's a stronger correlation if we go back to a shorter look back period or shorter rolling window. So trader he I hope that answered your question and need to know is asking about Vanna charts. You know I just look at the shape of the curve. So let me that's kind of a lengthy question. Let me let me take a closer look at that at your question later on. And I'll I'll try to answer it. So I did want to talk about the the 3835 strike. So let's go back and take a look at at ES. And so we're talking about the strike right here that's SBX 3835 which is equivalent to ES 3860. So spot gamma is still adding 25 points to ES to to get the equivalent equivalent to SBX 3835. So that strike again is the short strike of the JP Morgan collar. So if JP Morgan is short, that means that market makers along that call and that's positive gamma. So as price increases, they have to sell futures to hedge their delta exposure. And as price drops, they have to buy futures to hedge their delta exposure. So that could potentially lead to a a pinning effect of that strike. And I have taken a couple of screenshots and think or swim. And this is the showing and I posted this in bookmap discord. And this is showing the call gamma at in this range from about 3,300 to 4,300 for the next four Friday expirations. So the pink line is the this Friday expiration December 30th. And that's when this JP Morgan collar expires. That's the again this Friday expiration 12 30 and then the next four lines are just in there for comparison. And they're showing January 16th, January 13th, and January 20th. And this illustrates the strength of the gamma at that level at the 3835 level. And keep in mind, gamma, you know, simply is the rate of change of delta. So at expiration, and well, first in gamma is highest at the money at expiration. And think about it this way at expiration, any strike that is out of the money, the delta is zero and any strike that is in the money, the delta is one. So gamma and the rate of change of delta is gamma. So that gamma will increase as as time as expiration approaches. And to illustrate that, this is from yesterday, I took this last night. And this is from today. So you see there's a slight narrowing of that effect. So that, you know, that tells us a couple of things. The the influence of the strike is becoming more narrow. So the the stickiness of of what market makers have to hedge will decrease as price moves above that level or below it as time as the 30th Friday expiration approaches. And let's just go back and take a look at that. So none of us here, the peak of the line is just below 0.006. And in the curve today, now that gamma has increased from just below 0.006 to 0.007. And also the the area of influence has decreased a little bit. It's becoming more more narrow. So this this curve will get higher and more narrow as Friday expiration approaches. So that again, that is showing the influence of this strike will, you know, potentially be less further away from the 3835 strike as expiration approaches. And there was also a let me go back to the questions in YouTube. And so the the the question about today and you know, that's kind of one explanation for why and it's not the end of the day yet. And why price is not sticking to that level is first of all, as price moves away from that strike for whatever reason, the influence of that strike decreases. And one of the reasons today is the weakness in technology stocks. So anything can happen. And you know, again, sometimes what you expect to happen won't necessarily happen. And also a question from David to simplify is price attracted to the JP Morgan price because of the gamma created. And that's because of the market makers position. And market makers are positive gamma. And they are trading against price as price increases. And also as price decreases because of the positive gamma. So they're trading against price. So that again, could potentially lead to the to the pinning effect of that strike. Okay, let's take a look at some setups now, unless there are any more questions about that. So this is just something to something to keep in mind. And yesterday, a mean reverting trade to 3835 was the way to go. That's that's what worked in any yesterday. Okay, so let's take a look at some setups. Let's go back to hero now. And the first is, yes, and there's a strong correlation between price action and hero and ESN and spy today, mainly with puts. So traders are buying puts. Let's just zoom in morning session. I'm going to leave that. So the oops. So the morning session traders were not doing a lot. They were, they were mildly buying calls and mildly or slightly buying puts. And that is price again, reversed at the at the 3850 level, SPX 3850. So not a that's not a clear divergent signal. But the options trades certainly did not support the rise higher. You know, they were actually let me redraw that. I'm going to go go back to the total signal. And actually, if you look at the total signal, there is a divergence there up until about 10 o'clock or nine, nine 55 maybe. So a divergence in the hero signal and price action as it hit that 3850 level. So there was a good, good short set up there watching hero. And all right, let's take a look at spy. It should look about the same. And there's the same divergence. And notice that traders are, as usual, they are buying dips. So as price drops down a little bit, they take positive delta positions. And then as price increases, more negative delta moving back and forth like that until finally price continues to drop. And they they're taking her entering negative delta or bearish positions as price drops. And then as price got down to this below the 3800 level, briefly took positive delta positions. And as price increased back to negative delta. So that is pretty typical behavior of the S&P 500 and can also lead to some very nice divergent setups. So you look for the divergence in hero and the look for a reversal level and plan your trade and then look at book map to look at order flow for the level and for the the sign of a reversal to enter a trade. So let's go back and take a look at book map again. So here was the reversal this morning. Notice the pink dots coming in, aggressive sellers coming in. And just the opposite at this reversal point, green dots, aggressive buyers start to take it higher as traders are taking positive delta positions. Take a look at spy. Not as much clarity here, but the levels do help. A reversal at the C1, that's a combo one level. So that's a high high gamma level. And then the reversal higher along with the ES at the C2 level. All right, the next next stock is apple. And this is pretty consistent again with the the weakness in big cap tech. And let's go back to hero now. Take a look at apple. And there's a very strong correlation between options trades and price action. And it looks like mostly put. So traders are buying puts. Let's zoom in on the morning action here. And you can see this divergent setup. Traders start buying puts as price makes a slightly higher high. And traders initially were buying calls and also selling puts helping to drive price higher. But then they started buying puts and stopped buying calls and price started to decrease. And let's go back and take a look at book map. And here's the there's the reversal. Notice all the pink dots coming in the cell sweep. And then price starts to move lower. And there are several high liquidity targets below. The first at 129 then 128 127. And this is what's so great about trading stocks is the targets are just so clear with a high liquidity at the round number levels. And it looks like the 130 put wall was the only gamma strike that was in play today. So price is trading now well below the put wall. And let's go back and take a look at a hero. Change that back to total update. Zoom out. And price continues to be strongly correlated with options trades in apple. And now it's actually one thing I forgot to do. Let me take a look at my key gamma list today. And this is the this is my watch list. And I know the key gamma strike every day. And I compare that with the key gamma strike from the previous day. And I color code the the numbers red if the price decreased and green if the price increased from the previous day. So there are a couple of several decreases today to I'm going to look at Microsoft and Moderna and then also Tesla. And Tesla has been extremely weak for quite a while now. And we can also take a look at Nvidia. And so also note for Moderna and Tesla that the key gamma strike has dropped for at least the second day in a row with two red numbers there. So that that got my attention and maybe want to do further research in the equity hub. This is the spot gamma equity hub. So let's go to Moderna. Notice the slight put domination. The blue line being lower than the the put blue put line lower than the orange call line. And what is notable here is primarily the drop in the key gamma strike from the 23rd to the 26th to the 28th from 210 down to 180. And also today the drop in the pole wall. So that indicates continuing bearish sentiment that traders are looking for and expecting lower prices in Moderna. All right. Let's go take a look at hero now. Let's go to Moderna. And there's again a very strong correlation between price action and options trades. And it looks like the main driver are calls. So traders are selling calls. And they're taking advantage of a higher volatility, higher beta stock and selling calls. And that's stock as price get ups gets up to a certain level. And notice as price continues to drop, they stop aggressively selling calls. So as price got up to this 180 to 50 level, we'll take a look at book map in just a moment. They start aggressively selling calls. And then as price gets down to around 175, they stop. And then they start selling puts. And that is now driving price higher. So again, traders are taking advantage of a high IV stock and selling selling premium, selling calls at high prices and selling puts at low prices. And let's go take a look at book map now. Go to Moderna. So there is a very sharp drop this morning as traders were selling calls. So they started selling calls as price was increasing and then continued to sell calls as price dropped down to the 175 liquidity there. And that was the primary price target along with 174 that came into the order book at the open. So looking at the watch list today, again, I noted the consecutive drop in the key gamma strike for Moderna did additional research by looking in equity hub and saw that the put wall decreased also. And those were both bearish signals. So watching watching Moderna at the open, I see that traders start selling calls as price reached up to this level. And you had to be pretty fast catch that there or I guess a slight slight hesitation there at the 180 key gamma strike. And then there were a couple of short entries here as price was making lower highs. And again, with this 175 big ground number liquidity target level, let me check YouTube for questions. And let's ask about Tesla. And yes, I will I'll get to Tesla. So let's take a quick look at and I'm going a little bit slow here today. So let's take a look at Microsoft quickly. Another good week big cap tech stock. Notice all the pink dots here. Microsoft makes lower highs, then a breakdown below the 238 with a 235 price target was a good trade. Let's go take a look at hero and recall that Microsoft was another stock with a falling key gamma strike. And this morning there was a stronger correlation with price action and hero but not so much this afternoon. So here was the here was the morning setup. Alright, let's go ahead and look at take a quick look at Netflix and as usual, very strong correlation between price action and hero at least in the morning session. Go to Nvidia and Nvidia has been pretty choppy recently. Let's take a quick look at equity hub and video. Notice the very large put domination here from about 100 and above. Traders are definitely long puts and there were a couple of signs here in equity hub. First, the pretty sharp drop in key gamma strike for 160 to 140. So a 20 point drop in the key gamma strike. Also a drop in hedge wall and then the put wall. So altogether very bearish signal looking at all those three key daily levels dropping. And now let's take a look at here's Nvidia again in equity hub and let's take a look at book map. So the the stocks that I looked at earlier especially Apple and Moderna were a little bit more clear than Nvidia. We'll just take a quick look in book map and again here's the chop that I mentioned and then a drop lower after this last test of 142. Okay and let's go let's move on to QQQ now. So this is a unfortunately there wasn't much of a correlation between price action and hero today. You know as we saw before that traders were taking positive delta positions most of the day but this was a as far as spot gamma levels go a great downtrend. What I'm looking at first of all is these lower highs here and price test the 265 key gamma strike. Rejects every time finally makes a lower high and then breaks below this 264 c2 level. And the clear price target is the 260 put wall and the liquidity there. So from an order flow point of view this was a very nice very nice setup but options trades were not not really confirming that. Let's go back and take a look at hero again and we can see again that traders starting around 955 started taking bullish options trades and then price finally responded as it reached reached that put wall the 260 put wall and finally let's take a take a quick look at spy again and see what's going on and then we'll look at Tesla. So compared to QQQ QQQ again a much stronger correlation today and spy between options trades and price action and then finally let's get to Tesla and let's go back to equity hub here and take a look at Tesla and again this is the put call impact chart showing the clear domination of puts from around 50 above so traders are long puts they have been buying puts and traders are selling the puts and selling stock to hedge their delta exposure and the key gamma strike list that I showed a moment ago shows the key gamma strike dropping from 130 yesterday to 120 to 110 and I may have had that wrong let's see no I've got it right so 110 today 120 yesterday let's go back to equity hub so this shows the last five days the key gamma strike dropping from 140 to 130 to 120 to 110 that's very bearish hedge wall also dropping traders are their sentiment is bearish and they're looking for lower prices and also the drop in the put wall so all this is very bearish and at some point that will that will slow down and that's what this chart shows as price approaches you know let's say around 100 these lines you know the notice the steepness here of these lines start to level off and that indicates that market makers delta exposure will cease to change that much as price drops down to that level and they don't need to to hedge as much so look at you know the lines from you know let's say 90 below or 90 95 below the steepness of these lines really tapers off so market makers will have less of a need to hedge as price approaches this level and let's take a look at a hero now for Tesla and as usual there's a very strong correlation between price action and options trades let's see what traders are doing so they are buying puts and initially in the morning they were looks like aggressively buying calls right in the morning then that leveled off and price started to fall and traders are also buying buying puts let's go take a look at book map Tesla alright so it looks like the reversal setup was here at the 116 liquidity and price target primary price target at the 110 key gamma strike let's go back and take a look at a hero with those levels in mind I'm assuming a bit let's look at the total signal so this is at that 116 level traders start to first of all they were entering positive delta positions and when price got to that level they started taking negative delta positions all the way down and below the the 110 key gamma strike and then as price reached that level and below they started taking positive delta positions this is this is pretty typical of behavior that we've seen today is traders are selling the highs and buying lows let's go back to book map so Tesla is a pretty volatile stock they overshot the 110 key gamma strike a bit went down below the 109 and then as traders started taking positive delta positions Tesla finally reversed higher at the 110 gamma strike so there were multiple opportunities for a short on pullbacks all the way down to 110 and below and then also this reverse higher reversal higher right let me do a final check for questions right so Mitz I hope that answered your question about Tesla and Mike asked can I address all the puts expiring in Tesla in January and how that will affect how that will affect the stock and Brent at spot gamma has talked about that and I think he might have even made a video on YouTube about that talking about the the large put position and Tesla and also the indices and that could potentially lead to a rally after the January 20th expiration and keep in mind that the January expiration is often a very large expiration expiration for long-term positions so traders will buy long-term positions both calls and puts in the in the January expiration and so Brent has been talking about the large put positions in Tesla and how that could potentially lead to a rally as those puts expire and market makers who are short stock or so market traders long puts market makers are short puts and their short stock to hedge their delta exposure as those puts expire they can buy back their short hedges so that is a potential scenario and one yes ideas that will bounce after the at or after the January 20th expiration and think about it what happened at the beginning of this year the opposite happened traders were and in the S&P 500 traders were long calls in the January expiration and as those calls expired traders market makers could sell their their long hedges and price dropped so spot gamma is looking for a potential opposite effect there since traders and just you know looking at Tesla as an example traders are long puts market makers are short puts those long puts expire market makers can buy back their short hedges so that is the idea okay that is all that I have for today thank you for your questions and comments thank you for watching and I will see you tomorrow thanks again bye