 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. 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, 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. Here's my contact information. The best way to get in touch with me is through Discord. My name on Discord is Doug P. 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 my presentation and the topics of the channel which I'll go through in just a moment. And note that Bookmap Discord is free and available to everyone whether you subscribe to Bookmap or not. There's a lot of great content there. Again, everyone is welcome. I'm also on X, formerly known as Twitter. My name there is at Doug Plus. The focus of my presentation today and the focus of the Options-Doug chat channel in Discord is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading and the first is planning and I use positional analysis. I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as a directional bias. And the second step in my process is execution. I look at real-time order flow in Bookmap and real-time market maker hedging flow in Spot Gama Hero to confirm my thesis and for setups for entries and exits. And when I talk about setups today, I will be focusing on an underlying asset and those setups can be taken any number of ways. For example, the SB500 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-Doug chat channel in Discord as well as the chat in YouTube for your questions and comments. Please feel free to post and I'll do my best to answer your questions. All right, here's my agenda for today, Monday, December 11th. First of all, I want to go over news items, economic data, and events for today and as well as the rest of the week. Then I'll go through my positional analysis for today. Then I'll review some setups from earlier today and then I'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 will be glad to do that. All right, let's start with news. And today was fairly light. There was a 10-year note auction right around 1 p.m. and just a continuation, really. The reaction was just really a continuation of the ES futures the uptrend. So that was all for today. All right, starting tomorrow, the big events and data releases start. First of all, Tuesday, tomorrow again, CPI report released at 8.30 a.m. eastern time and that typically can be a market mover. And note tomorrow I will not be doing a webinar. So I will not be here tomorrow for a webinar. I will be back on Wednesday. And Wednesday, PPI data comes out at 8.30 a.m. eastern time. And then at 2 p.m. the FOMC announcement, the last meeting of the year, the announcement is 2 p.m. that will be in the middle of my webinar. I will be covering that. And then at 2.30 at the end of my webinar, the press conference begins. And then on Thursday at 8.30 a.m. eastern time retail sales data comes out. And then finally on Friday, PMI data at 9.45 and then that is the big monthly options expiration, a very large expiration and a very heavily call dominated expiration. And we'll take a look at that. Let's go ahead and take a look at that now. And I'll keep an eye on this during the week. This is the expiration concentration. And this is for a combined S&B 500 NASDAQ and Russell 2000. And this is showing the December expiration. Orange bars that is called Delta, blue bars put Delta. And you can see the orange bar is much, much larger than the blue bar. This is a very call dominated options expiration. I'll talk more about that as the week goes on. All right, this is the S&B 500. Let me go ahead and start with positional analysis now and note that I am trading the March contract. So I have rolled over today to the March contract. Let's just take a look at something. During the week, the volume will gradually shift all the way from the December, the Z contract to the H contract. And we can just take a look at that and think or swim here and compare the volume. So already this is the volume for the Z contract, the December contract at 1.2 and the H contract already trading at higher volume, 1.6. All right, so again, I have rolled over to the March contract and I have adjusted the index relationships that I posted in Discord to the H contract. All right, let's take a look at some of the levels in play for today. So before I take a closer look at the levels on this chart, I want to take a look at a larger timeframe. I'm going to go to the SPX. So remember, the ES futures are a derivative of the S&B 500, the SPX. This is the main index. First of all, I want to point out key turning points on this chart. This is the October 30th beginning of the rally. On the Friday before, traders were loading up on puts concerned about weekend risk. And then after the weekend on Monday, price started to increase and implied volatility dropped. When traders buy puts, market makers sell the puts and those puts started to lose value and they could buy back their short futures. And that led to an IV collapse, put Vanna rally, and during that time, market makers position on the gamma curve was shifting from very negative to positive and note the rally slowed down as gamma notional shifted from negative to positive and more of a mean reverting type market. This is the November 14th. That's the last CPI report and that sparked continuation of the rally was zoom in on this chart. And for the last couple of weeks or so, SPX has been consolidating in a very narrow range. Somewhere between 40, 45, 40, and 4600 and is now breaking above the 4600 level. Right now, I want to point out the levels on this chart. So first of all, the dash purple lines are showing the lower and upper weekly expected move. This is based on the options market. I update this once a day, once a week, and it does not change during the week. Then the dash blue lines are showing the lower and upper daily expected move. I update that once a day that again, that's based on the options market. And it looks like, well, so far today, SPX is trading within both of those ranges but maybe heading toward the upper daily expected move. The dark red lines are showing SPOT gamma levels. These are proprietary SPOT gamma levels provided to SPOT gamma subscribers for a variety of trading platforms. This is thinkorswim. These levels are based on open interest that's updated once a day. SPOT gamma applies their own proprietary algorithms to come up with these levels. They're basically gamma weighted open interest. I'm going to point out the key daily levels. First of all, the 4400 level, that's the put wall. That's a strike with large net negative gamma that can be expected to act as support. The next level up is 4500. That's the volatility trigger. That is SPOT gamma's proprietary volatility flip level. Below that level, market makers position on the gamma curve is negative. In a negative gamma environment, they have to trade with price to hitch their delta exposure and that tends to enhance or increase volatility. On the other hand, above that level, like SPX is trading now, market makers position on the gamma curve is positive. In a positive gamma environment, they have to trade against price to hitch their delta exposure and that tends to subdue or decrease volatility. And the next level up is 4600. That is the call wall, the strike with the largest net positive gamma that can be expected to act as resistance. That's also the absolute gamma strike. That's the strike with the largest absolute positive and negative gamma. And that is the level where most of the gamma weighted open interest is concentrated and a lot of that should diminish after expiration on Friday. And note that 4600 level SPX has tested that a couple of times and is now moving higher. Let's take a look at a one-day chart just to get a closer look at the levels in play for today. Here's SPX. A little bit more than a day's worth of data. This is a one-minute chart. There's the call wall absolute gamma strike at 4600 and SPX is trading firmly above that level. Still uptrending. Let's go to book map now. So in book map, I have my own cloud notes so I can show a variety of levels in one column here. First of all, SPX levels. There is the 4600 absolute gamma strike call wall acting as support earlier today. And I also have SPI levels on this chart. There's the 460 absolute gamma strike call wall just above the 4600 level. And note the relationships for ES to SPI and ES minus SPX changed substantially from last Friday. For example, ES minus SPX for the Z contract last week was four. ES minus SPX was four. Today it's 56. That's what I'm using. It may be closer to 55 now. This morning when I checked it, it was 56. And also the ES to SPI ratio changed quite a bit as well. All right, so I have SPX levels on my chart. SPI levels also here's the upper daily expected move for ES. So so far today, primarily the levels in play for today have been the the 4600 level and the 460 level. All right, we'll take a look at setups in a few minutes. All right, shifts in levels for the SPX, the only shift in level was the volatility trigger shifting lower to 4500 and for SPI, the volatility trigger actually shifted higher and also the absolute gamma strike shifted higher. So out of those, the shift higher in the absolute gamma strike for SPI, I interpreted that as bullish. All right, let's take a look at NASDAQ now. So these are the NQ futures and book map. Again, I'm looking at the March contract, the H4 and rhythmic. And before I take a closer look at this chart, I want to isolate first of all the QQQ levels in play for today. So for QQQ, this 392 combo L4 level was kind of the lower bound around the cash open. 393 acting as support. 394 initially acting as resistance than support. And now QQQ is trading above the 395 level. And that is a large Gamma 1 level. And note for QQQ, the volatility trigger shifted lower. So QQQ is well above its volatility trigger at 383 and the call wall shifted higher from 395 last week to 400 today, so that's bullish. That potential ceiling for price for QQQ, it has more room to run higher. Let's take a look at NDX. NDX also moving higher. Looks like just a continuation of the uptrend that began last Friday. That's what I'm showing here. This is the open on, oops, wrong tool. The open on Friday pullback to around the 16,000 level. So the 16,000 level for NDX has been in play now. NDX trading firmly above that. Even without the participation of the Magnificent 7 that we'll take a look at in just a minute. Alright, so that's NDX moving higher. Alright, let's go back to book map now and take a look at NQ. So in NQ, I have my own cloud notes as well. So I'm showing QQQ levels, there's the 395 L1 level, and then the 16,197 combo level just below that. That's NDX. And note the relationships for NASDAQ did change substantially as well. So for example on Friday, NQ minus NDX for the December contract was 15. And today NQ minus NDX, when I checked it this morning was around 225. Alright, so those levels in play for today, let me zoom out. So there's this, there's the 392 level kind of a launching point right around VWAP as well for the move higher this morning. 393 VWAP acting as support and NQ now trading above its upper daily expected move which acted as resistance earlier today. There's the 394 acting as resistance then support. Alright, shift some levels for the NASDAQ for NDX volatility trigger shifted higher put wall shifted lower and then for QQQ again the volatility trigger shifted lower and the call wall shifted higher. So I interpret that overall as bullish when that call wall that potential ceiling for price moved higher. And again we'll take a look at setups in a few minutes. 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. This is gamma notional and this information is provided in the spot gamma AM founders note updated once a day for the S&P 500 NASDAQ and Russell 2000. Note all these numbers are positive and they became more positive than Friday. So market makers position on the gamma curve at the beginning of the day was positive again for the S&P 500 NASDAQ and Russell 2000. And this on this position of the gamma curve for an index spot gamma assumes that traders are short calls market makers are long calls and as price increases they have to sell futures and if price decreases they can buy back their short futures. So they're trading against price in a positive gamma environment. Alright let's take a look at the Vanna model now to get a sense of a graphical representation of what that means. So first of all this is the gamma this is the Vanna model for SPX this chart is showing market makers delta notional on the vertical axis and the spot price for SPX on the horizontal axis. There are two curves on this chart the first light gray curve shows how market makers delta notional may change with changes in price and implied volatility. And that change in delta with the change in applied volatility is the Vanna effect Vanna is a second order of Greek Alright let's take a look at some prices now So right now SPX is trading around 4619 somewhere between these two lines near the bottom of this chart. So this chart shows how market makers delta notional may change with changes in price between these two lines near the bottom of the curve So what this is showing is if price continues to increase up toward 4650 4700 market makers delta notional will begin to increase and they will have to sell futures to hedge their delta exposure. Alright let's take a look at SPI SPI currently trading just under 462 right between these two lines also at the very bottom of the curve and price continues to increase market makers delta notional will increase and they will have to sell futures to hedge their delta exposure and finally let's check QQQ trading above 395 and approaching the upward sloping portion of the Vanna model on the right indicating market makers will have to in this case NQ futures to hedge their delta exposure So when traders buy and sell options for QQQ market makers hedge those trades with NQ futures Alright let's take a look at some setups now So first of all I want to take a look at what options traders are doing today This is the hero signal hedging impact real time options This is available to spot gamma subscribers So everything that we've looked at so far other than bookmap has been based on static data that's updated once a day sometime during the night again this is based on open interest data that's provided by OCC and spot gamma applies their own proprietary algorithms to come up with the levels of the gamma model that we have looked at so far today Alright so this is real time now this is hedging impact real time options this is showing options trades and market maker hedging activity for a combined signal for SPX by XSP and ES futures all under one combined signal the white line is showing price SPX and the purple line is the hedging the hero signal again this is showing options trades and market maker hedging activity for that combined signal and a rising purple line indicates that traders are taking positive delta positions and market makers take the opposite side so they have to buy futures to hedge their delta exposure let's zoom in on this chart and I've zoomed out right at the cash open here at 9.30 am eastern time and initially the hero signal was gradually rising but not very sharply and just about 10.45 there was a sharp jump in hero price moved higher and then it resumed price moving higher so net for the day this is very this is a pretty large number 5.14 billion notional value compare with recent days that's a pretty large number let's see what traders have been doing so here's that jump right around 10.45 traders start aggressively buying calls they've already been they started buying calls from the open and the blue line pretty flat compared to the call line especially with this jump at 10.45 and note right around 11.45 traders start selling puts so before they were buying puts not aggressively they started selling puts right around 11.35 resumed buying calls both the orange line and blue line moving in the same direction that's a very powerful directional signal and the SP continues to move higher let's go take a look at book map so we know for the day traders have been taking positive delta positions in the SP 500 so we can look at book map for setups here and earlier today there were some pretty deep pullbacks and as I mentioned before pullback to the 4600 level and then there's that reversal higher as traders start aggressively buying calls and SPX trading pretty firmly above the 4600 call wall and the 460 call wall and note around that just after 11.30 cumulative volume delta shifted positive that shown by this pink line rising also the yellow line is showing stop orders a rising yellow line indicates that buy stop orders are helping to fuel the move higher alright let's go back to book map I mean I'm sorry hero actually let's go back we're looking at 10.45 and then 11.30 so there's the move higher right around 10.45 found resistance at the 461 level and a retest of 460 and that's that move higher at around 11.30 11.35 and just to note when I'm trading I have two screens I'm looking at book map on one screen and hero on the other screen so I don't have to jump back and forth that reduces confusion I can look at both at the same time of course I'm only presenting on one screen so I can only look at one screen at a time or only present one screen at a time alright let's go to NASDAQ now this is a very interesting day let's take a look at hero go back first of all to the NASDAQ signal and not other than the zoom in other than this initial move higher options traders not providing much of a boost for the NASDAQ let's also take a look at this so the NASDAQ signal that I'm looking at is a combined signal for NDX and QQQ and I guess the best that you can say about this is right around 12.20 options traders in NASDAQ took their foot off the gas and started stopped taking negative delta positions let's take a look at the Magnificent 7 pretty similar chart this chart let's go back this is a very very interesting signal it is a combined signal for the stocks known as the Magnificent 7 Apple, Amazon, Google, Meta Microsoft, Nvidia, Tesla and note it is very bearish for today from the open traders started taking negative delta positions now that they've taken the foot off the gas and it looks like the Magnificent 7 are starting to to increase just about every other stock in the S&P 500 and NASDAQ are moving higher but these 7 stocks traders are selling and we'll take a look at some of them let's go back to Bookmap go to NASDAQ and entry from the open remember initially for the first half hour so hero is rising options traders were taking positive delta positions giving you a long setup from the open and then after that it was really a matter of watching order flow test of 393 price or versus higher there's that 394 support and now the NASDAQ continues to move higher let's just take a look at so this is the NASDAQ 100 and note the only the only red stocks really other than JD here which is not significant are the Magnificent 7 and they're buying everything else and that includes AMD one of the stocks that I follow as well as looking for Netflix as well as Netflix another stock that I follow that is not a Magnificent 7 stock alright so the NASDAQ is able to overcome the weakness in the Magnificent 7 due to all these other stocks alright so in the case of NASDAQ especially it was just a more more reading order flow and book map rather than hero and spot gamma hero so in spot gamma hero the hedging flow alright let's take a look at some stocks now and the first stock I want to take a look at is AMD so not one of the Magnificent 7 and remember last week AMD announced their new AI chip alright let's go take a look at hero and see what options traders have been doing in AMD on this Note 130 is the key gamma strike in the call wall and AMD breached that level moved higher note this timely flow alert here that is something fairly new indicating options activity a good way to get your attention or to see what traders have been doing in AMD the orange line is showing calls a rising orange line indicates traders are buying calls and the blue line indicates that's put trades and that is not significant today sorry about that so traders buying calls when traders buy calls market makers sell the calls and they have to buy stock to hedge their delta exposure and I think that is enhanced or increased when the call wall is breached all those calls located at the 130 level go into money and market makers delta notional will become higher those calls go into money delta increases and market makers have to buy futures to hedge their delta exposure remember they are short those calls let's go back to book map strong rally in the morning note a lot of aggressive buyers the volume dots show market buy minus sell green dots indicate more buyers than sellers magenta dots indicate more sellers than buyers so a rally from round 129 shows that 130 call wall breach and price reaches this 135 level note all the liquidity at that level the heat map and book map shows a history of the limit orders in the order book the darker color darker red indicates a high number of orders in the order book those orders were consumed at 135 then it looks like they came in again so that initially acted as resistance and now traders are starting to take positive whether aggressively buying AMD again moving it back up to 135 it looks like let's go back and check hero again and note how price responds so closely to options trades when options traders take their foot off the gas it's a very typical pattern anywhere from 11 to 12 so initially in the morning from the open options traders aggressively taking positive delta positions buying calls as we saw then around 11 to 12 they typically take their foot off the gas and price moves lower and consolidates overall heroes pretty flat looks like they right around one o'clock started taking positive delta positions moving price back up toward that 135 level of high liquidity all right the next stock I want to take a look at is Netflix so Netflix another tech stock that I follow but not one of the Magnificent 7 bullish day in Netflix separate outputs and calls so again just like AMD traders are buying calls in Netflix when traders buy calls market makers sell the calls and they have to buy stock to hedge their delta exposure note again the timely flow alert indicating significant options activity and if you caught Netflix at that alert that was very good trade today just like AMD the typical pattern very strong call buying until about 1045 they take their foot off the gas and price consolidates and really just following the call traders sideways down a little bit starting about 1240 and now right around 140 starting to move up again as traders buy calls let's go take a look at book map and good afternoon VHU welcome glad you're here I'll take a look at Nvidia and just a minute that was Nvidia's on my list to look at today alright so we're really nice move higher in Netflix today call alert just a few minutes after the open the open shown right here that's the opening print right around 459 traders start aggressively buying calls note the liquidity that comes in big block from 465 up to 470 these are limit sell orders Netflix moves through all of them and then right around 11 o'clock options traders take their foot off the gas and Nvidia starts to move lower and nice 10 point move higher in Netflix this morning alright let's take a look at Nvidia as a I guess a representative of one of the magnificent seven kind of the ringleader of the magnificent seven maybe alright so let's go to hero see what options traders were doing go to Nvidia alright Nvidia let's see what traders are doing so in the morning initially they were selling calls just the opposite of Netflix and an AMD note another timely flow alert just a couple of minutes after the open traders were selling calls when traders sell calls market makers buy the calls and they have to sell stock to hedge their delta exposure then right around 11 so they were also net starting around 10 buying puts that shown by the following blue line then right around 11 1145 stop selling calls 115 they start buying calls 12 o'clock they stop buying puts and they have really stop buying puts so about that time when call sellers take their foot off the gas put buyers take their foot off the gas some aggressive buyers start to come in and then around 115 call buyers come in let's go take a look at book map alright so here's the initial move higher some consolidation just below 460 let's go back let me check so 460 is the key delta strike and note the aggressive buyers that start to come in right around 1215 you can see the shift in volume dots here more magenta dots here aggressive sellers and then right around 1215 aggressive buyers start to come in break out of this consolidation range as traders take their foot off the gas of taking negative delta positions option traders now price moves back higher all the way to 470 alright so that's in video let's go back to hero so so so far starting right around 12 actually right around 1145 they stopped taking negative delta positions right around 115 they start taking positive delta positions let's just scan through some of these other charts and then 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 there's apple also starting to reverse higher note multiple flow alerts on the first 45 minutes of trade we've looked at AMD let's take a look at Amazon also moving higher now Google pretty much sideways IWM moving higher today meta also starting to reverse higher Microsoft let's take a look at Tesla all right Tesla week today looks like it did find support at the force 23750 hedgewall let's go take a look at book map for Tesla Tesla may be also finding a bottom around noon slow to Rodsey asked did you notice gamma was added to spy options before the rally today gamma showed up in spy 474 469 462 464 462 before the market opened put wall remain the same so let's see all right these are the main gamma levels these are the levels that I have noted on my chart so if anything was added at the before the market open that will appear in the gamma levels tomorrow I as far as any any gamma added any open interest added that would only be after the market opens the options market for spy does not open until 9 30 a.m. Eastern time I'm not quite sure I understand the put wall did remain at 450 these are the gamma levels that I'm looking at all right let's go back and take a look at book map all the combo levels yeah the combo levels are are higher there was gamma added higher and especially for spx a lot of gamma last week at lower levels has shifted by by these are the levels that I put in my charts this is what I use for my so gamma shifted higher for spx concentration of gamma weighted open interest let's go back and take a look at yes and maybe consolidating a bit next level above 462 and the 4623 resistance level at spx 4623 let's see what options traders doing back to the sp500 signal so at least for the moment the hero signal is leveling off a bit I've got a few minutes left does anyone have any stocks they want me to take a look at let's take a look at nasdaq see if there's any clue there so again the best you can say about the the hero signal for nasdaq is stop going down take a look at the magnificent 7 alright slow to rari slow to razi indicates combo levels seem to be new got added on friday were they added on friday morning so I'm not sure I understand I look at those levels every day let's go back to actually we can take a look at so here are the spy combo levels so I don't see anything at 474 alright so those are the latest spy combo levels magnificent 7 starting around noon starting to take positive delta positions and overall the combined line rising traders mainly buying calls and stop buying puts check nasdaq up to 16,450 alright again for those who were not here when I was talking about news today I will not be streaming tomorrow tomorrow remember cpi report comes out at 8 30 am eastern time again I will not be streaming tomorrow I will not be in chat in the morning I should be able to chat in the afternoon intermittently I will be back on Wednesday again the FMC meeting at 2pm that will be in the middle of my webinar and I will shift to watch the market at 2pm alright so again one more time I will not be here tomorrow I will be back on Wednesday alright everyone have a great afternoon and thanks for watching thanks for your questions and comments and I will see you on Wednesday thanks again bye