 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 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. Pass 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. There's also in Bookmap Discord an options dash Doug chat channel. That's a great place to post questions, content, and comments related to the topics of my presentation and the topics of the channel which I'll go through in just a moment. And also Bookmap Discord note that is free and available to everyone whether you have a bookmap subscription or not. There's a lot of great content including my channel. I'm also on X, formerly known as Twitter. My name there is at Doug Plus. The focus of my presentation and the focus of the options dash 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 in my process is execution. I look at real-time order flow and bookmap and real-time market maker hedging flow and Spont Gamma Hero to confirm my thesis and for setups for injuries and exits. Questions and comments are welcome and I will be watching both the options dash Doug chat channel and bookmap discord as well as the chat and YouTube for your questions and comments. Please feel free to post and I'll do my best to answer your questions. And just a note, I am streaming in 1080p in YouTube now so if you're having any issues with screen resolution in YouTube you can just go to the gear and change the resolution in YouTube to 1080p. And hello Don, welcome glad you're here. All right here's my agenda for today, Wednesday October 25th. First I want to cover news items, economic data events and earnings for today and the rest of the week. Then I'll go through my positional analysis. Then I'll review some setups from this morning and then we'll take a look at the live market. All right so first of all news items, economic data, a minor report. This morning at 10 a.m. new home sales came in greater than previous, greater than expected. And then yesterday both Google and Microsoft reported earnings after the close and there's been a positive response to Microsoft earnings and a negative response to Google earnings. And then today after the close, Jerome Powell will speak and then also meta reports earnings. All right for the rest of the week there is some higher impact data coming out. Tomorrow durable goods and GDP data at 8.30 a.m. Eastern time then Amazon reports after the market closes. And then on Friday the PCE data at 8.30 a.m. Eastern time that's the economic report for the PCE data. And then just a preview next week the FOMC meeting, meeting and announcement, the meeting ends on October November 1st, Wednesday November 1st. All right so that is news economic data. Let's take a look at some charts now go through positional analysis. This is the ES futures, SOB 500 futures in book map. And so far the bottom has yet to be determined. Note that now the SOB 500 is trading below the 4200 foot wall. That's the SPX 4200 foot wall. Also the SPY 420 foot wall. That's the absolute gamma strike also. So according to spot gamma in this situation the SOB 500 would be would be oversold. But it is definitely in definitely moving down in a very negative gamma environment. And this is something that that can happen in a negative gamma environment. That's why I look at it and talk about it every day. All right before I take a closer look at this chart. Let's take a look at a larger time frame. I'm going to start with the SPX 30 day one hour chart. Quickly note the key turning points. Here's the 915 options expiration, the September options expiration call dominated, downtrend began, attempted to reverse higher at the October 6th. That was the September jobs report. Gamma squeeze, SPX found resistance around 4380, trended lower, and there was a potential for a turnaround at the expiration last Friday. The October expiration very negative gamma put dominated and that lasted for about a day or two. And now SPX is broken below the 4200 level and looks like the next level down below is this combo level at 4099. All right let me point out the key levels on this chart. First of all the dash purple lines are showing the lower and upper weekly expected move. That's for the week. That's updated once a week. Then the dash blue line showing the lower and upper weekly daily expected move. That changes every day. Note SPX is trading well below the lower daily expected move for today. All right the dash red lines are showing spot gamma levels. And I'm going to point out the key daily levels. First of all there's the 4200 level that I just mentioned on the book map chart. That's SPX 4200. That's a put wall. That's a strike with the largest net negative gamma that can be expected to act as support, not doing its job today so far. Then the level above that is 4300. That is the absolute gamma strike. That's the strike with the largest absolute positive and negative gamma as well as the volatility trigger. That is spot gamma is proprietary gamma flip level. Below that level market makers position on the gamma curve is negative. In a negative gamma environment market makers have to trade with price to hitch their delta exposure and that tends to enhance or increase volatility. And then on the other hand above that level market makers position on the gamma curve is positive. In a positive gamma environment they have to trade against price to hitch their delta exposure and that tends to decrease or subdue volatility. And note that SPX is firmly below its volatility trigger in a very negative gamma environment and certainly that will become much more negative tomorrow if this continues. And it looks like there's no so far the bottom today has not been found. All right so SPX below the volatility trigger below the lower daily expected move. The next level up is the call wall at 4400. That's the strike with the largest net positive gamma that can be expected to act as resistance. That is not in play for today. And note that level did move lower from yesterday. It had moved up to 4,500. So Monday it was at 4,400. Moved up to 4,500 yesterday. Back down now to 4,400. And note the absolute gamma strike did move higher from 4,000 yesterday to 4,300 today. All right that is the big picture. Let's take a look at another SPX chart just for today to see the levels in play for today. So here's the lower daily expected move. SPX attempted to trade above that and the morning found support at the 4,200 put wall on the 4,201 C3 level combo 3 level just above that and now has reverse lower found support momentarily and now is trading trading much lower below the lower daily expected move and the put wall. All right let's take a look at take a look at book map now. So at the open, well let me first point out levels here. So I'll have my own cloud notes and my cloud notes I am showing of course the SPX levels that I pointed out before. There's the 4,200 put wall and the combo 3 level just above that that combines SPX and spy gamma weighted open interest into one level converted to an equivalent SPX price and then I have converted it to an equivalent ES price and the ES to SPX difference that I'm using today is 23. Let me just check and see where that is right now. So it's somewhere between 22 and 23 today. I used 23 maybe a little bit lower. So again there's a difference of price between ES and SPX and I'm using 23 points so the SPX 4,200 put wall is at ES 4,223 that's what I'm showing. I also have spy levels on this chart that I pointed out before. There's the spy put wall SP500 trading below that. Here's the lower daily expected move for ES. All right so those are the levels in play for today. Note the right at the cash open the spy 4,222 resistance some support at the 4,200 level earlier today resistance at the spy 4,21 that is also the SPX 4,222 which was noted as support in the spot gamma AM founders note can also act as resistance as it did there as well as VWAP and now the SP500 continues to move lower. All right so those are the levels in play. I pointed out resistance levels, temporary support levels and the support for the day is yet to be determined. All right let's take a look at all right so shifts and levels I mentioned for the SPX call wall lower absolute gamma strike higher and for spy the call wall shifted lower and that was a pretty big move from 440 to 428 so not not really in play for today. All right let's take a look at NASDAQ so note 350 is the put wall for QQQ and the put wall for NDX is 14,000. So now NASDAQ is testing the QQQ put wall. No and I don't have any levels below 350 I'll have to update my spreadsheet. All right so plenty of levels here on this chart and before I take a spend more time on this chart let's isolate first of all the QQQ levels. So here's QQQ for the day this cluster of levels the 355 level as well as the combo level above and below that acting as resistance and now QQQ trading down to the put wall at 350. So so far today SPX spy put walls have not held and we'll see if the QQQ put wall holds. All right let's take a look at NDX levels now so here's that cluster of levels combo levels as well as the NDX call wall at 600 price to not make it up there reverse lower again at the combo levels remember QQQ 355 was just in the middle of that. All right so those are the NDX levels let's go back to NASDAQ so here's that cluster of levels that acted as resistance so just like ES I have my own cloud notes here I'm showing QQQ levels here's the 350 I'm showing also NDX levels there's the zero gamma level and then again there's this cluster of levels with two combo levels with 355 in the middle. All right there was only one shift in levels for the NASDAQ and that was a shift higher for QQQ the absolute gamma strike shifted higher from 350 to 360. All right let's take a look at gamma notional now this is very important to take a look at today so we can understand a bit of water's driving price action I look at this and talk about it every day this is market makers position on the gamma curve at the beginning of the day note all these numbers are negative I'm looking at gamma notional market makers position on the gamma curve for SPX by NDX and QQQ I generally don't pay any attention to NDX. All right so for SPX spy QQQ note all these numbers are negative very negative less negative than yesterday they all shifted higher but still negative so this indicates that traders are long puts market makers are short puts and market makers have to trade with price to hedge their delta exposure so as price continues to drop those puts are increasing in value puts that were out of the money now going into money also delta increasing market makers want to remain delta neutral so they have to sell futures to hedge their delta exposure and this type of strong downtrend is certainly a possibility in a negative gamma environment. All right let's take a look at the Vana model and we can see a actually let me just take a look at one other thing this is the gamma curve so when I talk about the gamma curve this is what I'm talking about this is for SPX and the slope of these lines can really be related to speed so this is showing as price moves up and down in the range shown with this steep curve that in a negative gamma environment below the volatility trigger market makers have to trade with price to hedge their delta exposure one thing I want to point out here is a potential floor right around 4100 note the how the slope of the curve shifts pretty drastically right around 4100 40 somewhere between 4050 and 4100 indicating at this point market makers are fully hedged and may not need to continue to sell futures to hedge their delta exposure so at least for today that's a potential bottom potential all right let's take a look at the Vana model now I'm going to start with SPX so this will be a graphical illustration of what I'm talking about what this chart is showing is market makers delta notional on the vertical axis price on the horizontal axis there are two curves on this chart the first curve the light gray curve shows how market makers delta notional changes with changes in price only the purple curve adds implied volatility to the equation that shows how market makers delta notional changes with changes in price and implied volatility all right let's take a look at some prices now so we know SPX is below the 4200 foot wall right now it's right around 4183 that's right around here so what this showing is as price has been dropping today implied volatility increasing market makers so price is decreasing market makers delta notional is increasing they want to remain delta neutral so they have to sell futures to hedge their delta exposure this is when traders are buying puts and spy and SPX market makers take the opposite side of that they're selling the puts and they have to sell futures to hedge their delta exposure now this can work both ways if price starts to increase implied volatility drops market makers can buy back their short futures but again remember this works both ways so market makers traders are buying puts market makers have to also just prices dropping implied volatility is increasing those puts that traders already own are gaining in value and the delta is increasing market makers have to sell futures to hedge their delta exposure so we'll take a look at hero imminent they may not be buying puts today but definitely price is dropping and those puts that traders already own are increasing in delta right so that is SPX let's take a look at spy so spy is trading around 417 so again on this very steep portion of the gamma curve indicating as price continues to fall market makers delta notional will continue to increase and they will have to sell futures to hedge their delta exposure and if price starts to increase implied volatility drops market makers can buy back short futures and finally let's take a look at qqq so qqq still struggling at the 350 put wall slightly below it very uh very high up on this fana bottle here all right let me check for questions all right pharaoh hunter asked hi doug uh hello pharaoh hunter uh why do market makers lose money on a trend day uh i'm not sure they do market makers um are making markets and uh managing their risk so they manage their risk again by trading futures as traders buy and sell options all right so they're uh they're not losing money they are hedging their risk with with futures again and truman asked what trade what takes precedence in your trading decisions the gamma notional or the delta notional so i'm not sure i understand your question i don't have a uh don't have a precedent so here uh i'm aware of the vana model i'm aware that um and they they kind of go hand in hand so i'm aware that market makers gamma notional is negative a potential for this type of uh type of drop is here in a negative gamma environment so i can look at the vana model to see the steepness of this line so i'm looking at both there's really no they go go hand in hand there's no precedence and sorry i don't know how to pronounce your name uh af hey i want to ask how i can use hero for scalping um i'll talk about hero in a few minutes i don't know if it is uh necessarily uh great for scalping it depends on what you mean by scalping i i kind of look at uh larger term trades and kind of look at the trend of hero so we'll talk about hero in a few minutes all right so speaking of that let's get to uh take a look at hero now all right this chart is the hero chart this is showing price for spx and the hero signal hedging impact real-time options and this is this is showing options trades and market maker hedging activity in this case that's the purple line the hero signal again options trades market maker hedging activity for a combined signal for spx spy xsp and es futures all right note that spot gamma does provide individual signals for these instruments this is the combined signal so let's take a closer look at this i'm going to talk about some setups from earlier today so remember when market when traders are taking when traders are taking negative delta positions for example market makers are taking the opposite side and they have to sell futures to hedge their delta exposure so that was what was going on at the open and then right around 1030 traders started taking positive delta positions and remember that was right around the the put wall so there was a short setup a long setup and then a short setup right around 11 o'clock and remember that was around the 42 22 level and traders started taking negative delta positions and price reverse lower oops and note there is an issue with with hero today there it may be with there may be an issue with spot gamma but there is definitely an issue with um with cbo e chicago board options exchange so there is definitely an issue with cbo e i don't know if that's been resolved but we won't be able to look at a good hero signal for every instrument all right so short long then short again and confirmed with the hero signal price following opt following options trades market maker hedging activity and hello benham 0703 ask can i share to to rb coin i'm not sure what that is so if that's any form of cryptocurrency um no i don't don't have any cryptocurrency here i don't follow it it's not available in in hero for sure all right so let's take a look at book map now so here's the es let's take a look at the first short pretty obvious these are volume dots they're showing by minus cell delta by minus cell and magenta dots indicate there are more sellers than buyers and green volume dots indicate more buyers than sellers all right so there's the short set up and initially the 4200 level the put wall acted as support remember options traders started taking positive delta positions that at that level and order flow shifts positive note the green volume dots and also note that large traders were fading the move lower that shown by this light blue line showing they are buying with iceberg orders they used to hide their size also that shown by the sub chart indicator uh the on chart indicator here showing again they are buying weakness then as price moves up to the 42 22 level that's also also the spy 421 level price consolidates moves lower as options traders were taking negative delta positions so the downtrend continued that started between 11 11 30 downtrend continued until first of all attempting to find support at 4200 then 418 that spy 418 then spy 417 so great uh great short between 11 11 30 so you could have sold es futures bought a spy spx es put all would have been in great trades all right so there's the s of e 500 short long small short small long and then great short between 11 11 30 and note the the shift in cumulative volume delta here was um good directional indicator short long then short again all right let me check for questions all right bit them ask how can I find trb coin heat graphic uh i don't i'm not familiar i'm sorry you can join book map discord there are plenty of crypto traders and you can take a look at it also book map has a a digital version of book map just for crypto go to the book map website take a look at that i suggest you join book map discord you can also do that from the book map website free and available to everyone and learn more about crypto trading and book map all right so af ask can i choose put and call so we'll take yeah we can take a look at that so let's go back to hero let's see what traders are doing today and note that i have this 30 minute look back period i was using that this morning uh so let's shift it to a one day look back period it was uh because of the issues this morning it was uh providing a little bit better signal so now i'm looking at the data for the entire day let's take a look at puts and calls so this is pretty typical lost everything um try that one more time so they're buying puts and buying calls put buyers more aggressive definitely driving price higher so the blue line that uh that's shown briefly is showing puts that the notional value there was about 2.5 billion and the notional value for calls was about 1.5 billion rising orange line they're buying calls they're also buying puts and they're um paying pretty high prices for those puts all right so that's the hero signal for the day and so far the total notional value is negative for the day right i don't know what did the issue is with uh showing puts and calls that won't stay on the screen for some reason all right so that is the smb 500 short long short and we'll see what happens so we'll watch the once the live market in a few minutes or let's take a look at nasdaq now and here's nasdaq remember there have been some issues with hero it it seems to affect have affected the nasdaq signal a little bit more so what i'm looking at is the combined signal for ndx and qqq and so far are actually showing a positive notional value for the day at around 32 million but has been trending lower since that reversal lower uh between 11 or 11 30 let's go take a look at book map so really to um two short setups pretty similar to the smb 500 whoops sharp drop lower at the open aggressive sellers price consolidates moves higher to that cluster of levels that i talked about before just below vwap never made it above vwap then the aggressive sellers start to come in again shown by the magenta volume dots and prices continued lower uh maybe maybe finding support at the 350 maybe finding support at the 350 put wall and note that in the sub chart here cumulative volume delta has been falling lower that's the pink line also sell stops shown by the falling yellow line also trending lower and there really are are no large buyers with iceberg orders that light blue line also moving lower so net for the day of course there are some large traders buying with iceberg orders but net for the day that line is trending down maybe now flattening out a little bit all right so the hero signal again not providing that much of a help because of the issues this morning and but uh overall let's zoom in a bit here from about 11 11 30 overall definitely trending lower traders taking negative delta positions since about uh 11 11 11 11 0 5 let's see what they're doing so they're buying puts and they're also buying calls net for the day that number is the call number is positive higher than the put number but um recently they have been starting about 11 they were started selling calls continued buying puts spot gamma has indicated when both those lines are moving in the same direction uh that is a very powerful signal so af there you go there the puts and calls for the sp 500 as well as nasdaq all right so it looks like just before two o'clock they started taking briefly taking positive delta positions right sorry about that nothing i can do about that well let's take a look at some stocks so i had uh there were uh again issues with hero and cboe this morning so uh some of the signals are actually many of the signals on single stocks not not very helpful this is one that is this isn't video this is showing that traders are taking negative delta positions so they are selling calls shown by the falling orange line buying puts so when traders take negative delta positions in a stock market makers are taking the opposite side they're taking positive delta so they have to sell stock to hedge their delta exposure sorry let's try this again wanted to point out 430 is the key gamma strike then 422 50 is the hedge wall hedge wall is similar to a volatility trigger all right let's go take a look at bookmap go to nvidia our nvidia starts to move lower before the the broad market right around 1030 aggressive sellers come in and then price so far is making a series of lower highs today here's the 430 level 422 50 somewhere between these two levels is that right the 422 50 yeah 422 50 hedge wall surprise trading below that now and note the high liquidity at these round number levels typically it comes in at the cash open 930 and for a higher price stock like nvidia generally at the zeros and the fives and that liquidity for a stock typically stays in the order book until it is filled and these the heat map here showing a history of the limit orders in the order book and below price that would be buy orders limit buy orders let's just zoom in here let me go back out sorry about that so initially it looked like that that liquidity was pulled but looking at this level it looks like it was filled all right so maybe nvidia has found a bottom for today let's go back to hero and see what options traders are doing so options traders are starting to take positive delta positions let's just take a look at a shorter time frame so this gives us a little bit more clarity just looking at the past 30 minutes of data in this 30 minute rolling window period we can see that right around 145 traders started taking positive delta positions so they started buying put buying calls shown by the rising orange line and also selling puts shown by the rising blue line so the dip buyers coming in and nvidia and we get just get a little bit more clarity by just looking at the instead of looking at the entire days worth of data we're just looking at the last 30 minutes all right let's take a look at tesla now note tesla the 220 key gamma strike acted as resistance and at that point traders started taking negative delta positions price reverse lower let's go take a look at tesla so that was a little bit later reversal then then nvidia right around 1115 let's go take a look at book map tesla all right so here's the reversal so pretty strong move up in the morning tesla made a series of higher lows down resistance at the 220 key gamma strike then reverse lower as options traders shifted from positive delta to negative delta now it looks like options traders were coming in again and starting to take positive delta positions let's go back to hero all right so it looks like the afternoon dip buyers may be coming in um to tesla as well all right so mr bjc nine says gex and book map best tool for day trading uh i agreed so book map spot gamma that's uh that's what i use all right let's take a look at the stocks that reported earnings yesterday first of all let's take a look at google and again this uh there's an issue with with hero and let's let's see if we can zoom in a little bit so if we get rid of that uh that blip in the data earlier um what this looks like is just chop in uh netflix up and down with traders taking positive negative delta positions so far for the day gamma notional is slightly slightly negative let's go take a look at book map take a look at google so big drop down and google uh after the cash open here's the opening print right around 128 now it looks like google may be weight making it weight making its way to the high liquidity all the resting buy orders here that act as a magnet for price often at 125 that's right here all right the next let's take a look at microsoft so microsoft gapped up today and then after a very bullish opening print shown by the huge green volume dot microsoft is traded lower let's see if we can get any clarity and uh and hero to microsoft let's zoom past that that blip in the data so um it looks like around 1130 traders started taking positive delta positions note the flow alerts here rising hero signal and microsoft chopped down chopped around for quite a while and now looks like it may be trying to move higher as the afternoon dip buyers are coming in taking positive delta positions so they have started buying calls now just before 2 p.m. started buying calls that's shown by the rising orange line a lot easier to see on a 30 minute rolling window period all right so those are the stocks that reported earnings yesterday and let's take a look at meta that reports after the market closes today so net for the day traders are taking negative delta positions and it looks like meta may have found support right around the 300 key gamma strike note the flow alert here pretty timely signal right around 1110 1115 just when everything really started to drop let's go take a look at book map go to meta all right so meta is right at that 300 strike now looks like i need to add some levels lower all right does anyone have any stocks they want me to take a look at let me know now and i'll be glad to do that otherwise let's check back with the uh first the sb 500 so so far today 417 may be holding a support some aggressive buyers coming in let's go back and take a look at heroes see what options traders are doing also let's let's check this magnificent seven symbol this combines those seven large cap tech stocks apple amazon google microsoft and video tesla and meta so so far for the day this total signal is is negative and magnificent seven those are also the uh stocks that are really driving the market lower we can take a look at that in the heat map in um in thinkorswim here google amazon meta nvidia looking for tesla i don't see it so really large cap tech stocks and communication services as well as amazon driving the market lower all right let's go back to sb 500 now all right dip buyers really coming in right around 130 taking positive delta positions now price is starting to respond very slowly let's go back to book map all right shane wants to look at tlt all right i don't have tlt in book map but we can take a look in hero so let's go back to hero take a look for tlt we just get rid of that blipping data so tlt trending lower let's just take a look at a couple of other things here we'll first take a look at big futures moving higher much higher for the day up about seven percent and let's take a look at the um look at the ten year really started rising overnight and no this is the the open right here this shift from light shade to dark shade and that is earlier than the the cash open for um equities so tlt continues uh tlt continues lower and the 10 year actually you know the tlt is really a combination of the 20 year and 30 year and then i'm looking at the 10 year here the treasury notes so yield moving higher this is a uh a negative for equities especially large cap tech all right so there you go tlt moving lower let's go back to the sb 500 see if those uh dip buyers are still in trying to move price higher let's see if we can get any clarity from nasdaq so not no not so much in nasdaq back to book map so maybe find the resistance around 418 let's just check nasdaq and book map so so far for today qqq 350 put wall holding all right so now you see why i talk about the market makers position on the gamma curve is every day and this large down move can certainly happen in a negative gamma environment so that is uh why it's always important to keep aware of that market makers position on the gamma curve and the bata model and how they might react to changes in price and implied volatility and to be ready for and expect large moves like this in a negative gamma environment all right my time is up i want to thank everyone for watching thank you very much for your questions and comments and i will see you tomorrow remember data well first of all drone pile speaks this afternoon meta reports earnings and then there's data reported tomorrow morning durable goods and gdp all right thanks everyone thank you for watching thanks for your questions and comments and i will see you tomorrow bye