 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 recommendation. 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. The focus of my presentation and the focus of the Options-Doug chat channel and Discord is Options, Order Flow, the impact of options markets on stocks and futures, and the influence of market-baker 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. And I look at real-time order flow in Bookmap and real-time market-maker hedging flow in Spot Gamma Hero to confirm my thesis and for setups for entries and exits. And just to be clear, I'm going to talk about setups in underlying assets and those setups that they're based on an analysis of order flow and market-maker hedging flow and position analysis. So largely based on the options market, but the setups can be taken any number of ways with shares, with futures, or options. And questions and comments are welcome, and I'll be watching the option-dug chat channel and discord and the chat and YouTube for your questions and comments. All right, let's get started. My agenda for today, what I want to talk about. First of all, go over news items, economic data, earnings, and events for the remainder of the week. Then I'll go through my positional analysis, and then finally I'll talk about setups. So first of all, news for the day. I think the big news is Tesla earnings. Tesla reported after the market closed yesterday, there's a chart, a 24-hour-plus chart showing price action yesterday over on the left. And the overnight, the move lower after reporting earnings after the close yesterday. And then the downtrend continues today. So there's Tesla, big drop down. And the last time I checked, it was trading down about 9% or 10%. Just do a quick check on that. So right now, Tesla is trading down about 9% from yesterday. And I'll talk more about Tesla in a few minutes. Right, and then the next big event for the week is options expiration. And that's tomorrow. It is the big monthly options expiration. And remember for SPX, there are two expirations, the AM settlement. And that's for the standard monthly expirations. And then the PM settlement for the weeklies. So an AM and PM settlement for SPX. All right, so that should wrap up the week as far as news items go. All right, so let's take a look at, start with my positional analysis now. And this is the book map, S&P 500 futures. And before I dig into this chart, I'm going to take a look at a larger timeframe. This is SPX and it's showing price and key gamma levels. These are from Spot Gamma, available to Spot Gamma subscribers for a variety of platforms shown here for SPX. And let me point out a couple of the key daily levels. First of all, here's the put wall at 4,000 and that's new. So the put wall has increased from yesterday up from 3,900 to 4,000 today. And that's the strike where the largest net negative gamma that can be expected to act as support. And the next level is the 4135 volatility trigger. That's Spot Gamma's proprietary gamma flip level. Below that level, market makers position on the gamma curve is negative. And that means they have to trade against price. I'm sorry, they have to trade with price to hedge their delta exposure at a negative gamma environment. And then on the other hand, above that level, market makers position on the gamma curve is positive. And there they have to trade against price to hedge their delta exposure. So in a positive gamma environment, they're trading against price to hedge their delta exposure. And that tends to subdue volatility. On the other hand, below that level, in a negative gamma environment, they have to trade with price to hedge their delta exposure. And that tends to enhance volatility. So right now, SPX is trading above the volatility trigger. And the next level up is the 4150 level. And that is the key gamma strike or absolute gamma strike. That is the strike with the largest absolute gamma that can be expected to act as support, resistance, or a magnet for price. And then finally, the call wall at 4200. And 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 that I track on a daily basis shown there for SPX. Now let's take a look at another thinkorswim chart before I get to book map. And this is for today. And this is again SPX showing price and key levels. So here's the 4135 volatility trigger. And note also that I've been tracking the lower and upper edge of the daily expected move. And I forgot to do this last night. So I did this this morning based on the opening price instead of the closing price yesterday. So I'm going to see how this works. See if this 4150 level up above in this upper edge of the daily expected move acts as resistance. And so far my findings for this is that the SPX stays confined within this level. So the implied volatility or expected volatility is greater than the actual volatility. And to me that that's a good signal, a good indication for selling premium rather than buying it when the expected move is greater than the actual move. So today for SPX the trade would have been to sell a credit spread, put credit spread as close to the open as possible, or an iron condor, or maybe leg into an iron condor. So sell a put credit spread first and then as price is increased sell a call credit spread if there's any premium left. Alright let's take a look at book map now. So I'm showing the same levels on my book map chart and I have two columns of notes. The first is the spot gamma cloud notes. And again these are provided to spot gamma subscribers for a variety of platforms and here they are in cloud notes for book map. This is showing the key SPX levels. And there's the 4150 level. That's a level, a gamma level two. And the ranking is one to five, one being the most important, the highest level of gamma, and five being the lowest. And then there's the volatility trigger. And right now it looks like spot gamma is using a 25, a 24 point difference between ES and SPX. So that's why there's a difference in the SPX level and the ES level. And I calculated that difference at 22.5 points. So here I'm showing the 4150 level a little bit below. And there's the 4140 level that was noted as resistance in the spot gamma AM founders note. And that did act as resistance earlier today. And there's the 4130 level that acted as support. So those are SPX levels. And note also I'm showing the lower edge of the daily expected move. And this is for ES. And this is based on the closing price yesterday. So note that that level did act as support. And then finally, my cloud notes here, and this is what I'm looking at now on this left column, the C levels column. I'm also showing key SPI levels and actually every round number on SPI. And the gamma levels, spot gamma levels are shown with white background here in red text. So there's the 414 volatility trigger for SPI. All right. So the levels that are in play again, the 4140 level resistance 4130 support. And then price spending a lot of time around the 4135 level. And one thing to note is I had an issue this just afternoon. I lost power and then my computer shut down. It was on battery backup for a while and finally, finally shut down. So I lost data at a couple of points there. So anyway, it's been an interesting morning. I did a presentation for spot gamma this morning. And then as I was, as I wrapped that up and I was preparing for this webinar, I had this power outage. So I'm a little bit behind today. But anyway, that explains the gap in price there. All right. So that is the NASDAQ. And then I'll talk about some shifts in levels. Let's go take a look at the NASDAQ now. And note here, this is the lower edge of the daily expected move. And this was, again, set based on the closing price yesterday. So this was in my chart yesterday, last night. And note the NASDAQ gap down below that level and started to recover and is now trading above that level. So that as I've shown several times this week, that has been a good level to get long. And note right here. This is right around the cash open. Aggressive buyers step in immediately. Note all the green dots there, the green volume dots. And trader H.E. asks, when I have a chance, can I look at Tesla? Yes. That is one of the primary setups that I want to take a look at. So here's NASDAQ. Uptrend continues. And note a lot of the volume concentrated around the 13,100 level shown here. All right, so that's the NASDAQ. All right, let's talk about shifts in levels now. So first of all, for SPX, the volatility trigger shifted higher from 4115 yesterday to 4135. And the put wall shifted higher again from 3900 to 4000. So a couple of days ago, the put wall was at 3800, shifted to 3900 yesterday and then shifted to 4000 today. So that's very bullish. And then for SPI, the call wall shifted higher from 415 yesterday to 420 today. And then for QQQ, the volatility trigger shifted higher from 316 to 319. And the put wall shifted higher from 310 to 315. So all bullish. All right, let's take a look at the gamma charts now. And we can see the source of those levels. So this is SPX, absolute gamma levels. What this is showing is positive gamma or call gamma above the zero line with the orange bars. That's market makers position at these strikes. And then below, that's negative gamma or put gamma shown by the blue bars. So here's the 4150 key gamma strike or absolute gamma strike. The strike with the largest absolute gamma. And then here is the new put wall at 4000, the strike with the largest net negative gamma. And that can be expected to act as support. And then here's the 4200 call wall, the strike with the largest net positive gamma. And that can be expected to act as resistance. So that's SPX. Let's take a look at spy. And for the SMB 500, we really need to take a look at both. So here's spy. And here's the 415 key gamma strike or absolute gamma strike. And there's the put wall at 400. Again, the strike with the largest net negative gamma. And the call wall, the new call wall at 420, the strike with the largest net positive gamma. Well, let's take a look at QQQ. And before I do that, I generally have to do a refresh. So now let's go to QQQ. And we'll take a look at the gamma levels for QQQ. And this is what I use for the NASDAQ. So for the NASDAQ, here is the 320. That's the key gamma strike and the call wall. And now the put wall is right down below at 315. So that's QQQ, the gamma levels. One other thing to point out, and I know I've been over this before, but just in case somebody is not familiar with this chart, let me go through it quickly. This is the VANA model for SPX. This is showing two curves. The first, this light gray, is showing how market makers delta notional, shown on the vertical axis, changes with changes in price, shown on the horizontal axis. And what this is showing is when price increases, market makers delta notional increases. And they have to sell futures to hedge their delta exposure as price increases. And that's typical of a positive gamma environment. And this tends to subdue volatility. So again, market makers are trading against price. They're selling futures as price rises to hedge their delta exposure in a positive gamma environment. And then the second curve is showing how market makers delta notional changes with changes in price and changes in applied volatility. And that's the VANA effect, the change in delta with the change in applied volatility. And what this is showing is there's not much of a VANA tailwind as price increases. There's not a lot of difference in the light gray line and the pink purple line. Then on the other hand, as price decreases and implied volatility increases, market makers have to sell futures as price drops to hedge their delta exposure. And again, that's the VANA effect, the change in delta with a change in applied volatility. So that's SPX. We can just take a quick look at the VANA model for SPI, very similar, and QQQ. All right, let's take a quick look at data now. And just to point out, gamma notional for SPX, SPI, NDX, and QQQ, all positive, again indicating market makers position on the gamma curve is positive and they have to trade against price to hedge their delta exposure. And these numbers all did increase from yesterday, so it became more positive. Well, let's take a look at some setups. So let's go back to book map now. Actually, let's take a look at hero first. So for those of you who may not be familiar with this chart, this is spot gamma hero, hedging impact of real-time options. And this is showing price with a white line and hero, the hero signal with a purple line. And hero is showing options trades and market maker hedging activity. And this is for the combined signal for the S&P 500, showing options trades for SPX, SPI, XSP, and now ES futures as well, combined into one signal. XSP is not significant, so this is essentially just showing SPX, SPI, and ES options trades. And just before I take a look at this chart, there's a number of ways we can slice and dice this. And again, I'm indicating this as a combined signal. So let's take a look at SPX first. Look at the separate signal. So the combined signal was overall bearish, taking negative delta positions. Traders are fading this move higher with options. That's SPX, the same for SPI, even more clear, except for a move up to about 10, 15, something like that. And we'll go back to the combined signal in just a minute. And there is the S&P 500 futures options and showing the opposite, that traders are actually taking positive delta positions. So that's 1.43 billion. And now let's go back to the combined signal. And net, it is slightly negative delta, looking at this notional value. And this is generally the signal that I look at if I want to trade the S&P 500, whether it's ES futures, SPX options, or SPI shares or options. This is the signal to look at. So let's talk about setups now. And first, in the morning, there is definitely a confirmation for a long. Note the hero signal going straight up. And then price, price is following. And then finally makes a small move lower and continues higher. All right, let's go take a look at book map now. So there, I'm going to zoom in. So here's the opening move higher at the open cash open up into the 4140 resistance level. So that options traders and order flow set up longs here up to the 4140 level. And notice the cumulative volume delta really starts supporting trades as well as buy stop orders around 10 a.m. So a pullback down just below the lower edge of the daily expected move. Order flow shifts bullish again. Notice the green dots there, green volume dots. And price makes a move up to the 4140 resistance level. And then hero did set up a short of that level. There's kind of a triple top and then a move back down to the 4130 level. Note the fuel from the buy stops shifts lower and CVD shifts lower. And also during this entire time, this blue line, light blue line is falling indicating that market makers are selling this. I mean, I'm sorry, larger traders with iceberg orders are selling the move higher. All right, so it looks like after that, then trade continued higher, versing higher at the 4130 level up to the 4150 level. All right, so that's the S&P 500. And again, the approach that I've been looking at quite a bit is selling premium since the S&P 500 seems to be confined within the expected trading range for the day indicating that the expected move is greater than the actual move. And to me, in my opinion, that favors selling premium when implied volatility is greater than realized volatility. All right, let's go back and take a look at hero again. And traders continue to, well, now it looks like they're starting to buy, taking positive delta options positions. And so far for the day, this number, this notional value, even though the line is sloping down is still net, net positive, 253.8 million positive. And that's for the entire S&P 500 complex. All right, let's take a look at Nasdaq now. Let's go back to book map. And I'm going to take a look at QQQ. So here's QQQ. And I'm separating outputs and calls here. And note that traders have been buying calls all day. That's shown by the rising orange line here. Orange line showing calls, rising orange line, traders are buying calls. That's positive delta. And they have been overall net selling puts. So that is shown here. That's a positive number. So net for the day, they're selling puts, positive delta, but it calls our really driving price action. Notice this is 493 million versus 22 million for puts. All right, so right now it's 430 million versus 19.2 million. All right, let's take a look at the combined signal now. And it looks like it is shifting down a little bit. So let's go take a look at Nasdaq. And then we'll take a look at QQQ. So for Nasdaq, again, as I mentioned, the lower edge of the expected move, this is something that I put in the chart yesterday. So this is based on the closing price for NQ yesterday. And notice the very bullish price action at the open. Straight shot up, large green dots, aggressive buyers, heading up, looks like it stalled at 13150, then continue to move up to the 13200 level. And note I have kind of added to my cloud notes here for NQ recently. So I've added in, first of all, I have the big round numbers, the 50s and the zeros for NQ at a QQQ levels and also showing spot gamma levels. And I'm just using the price difference they're using there. So that is the 13141 combo L1 level. And then there's the 13100 level. Those are spot gamma levels. So very bullish day in NQ despite the earnings from Tesla. And let's go take a look at QQQ now. And there's the potential price target at the 320 call wall, key gamma strike, combined strike. So bullish price action in QQQ as well. Note the large time spent between the 317 level and the 318, large gamma 2 level, concentration of volume at that level. Let's go back and take a look at hero for QQQ and bullish for QQQ and for NQ. Again showing that traders have been buying calls all day, helping to drive price action higher. All right, so RJ asked the lower edge to the daily expected move based on zero DTE for today, set it yesterday's close. So that's what I've been doing for the futures. So at the close, I look at the expected move for the next day and then take that number, plus or minus, and add it and subtract it from the closing price. So let me just show what I'm doing. So here is, let's take a look at ES. And this is an options chain and thinkorswim. Any platform should have this. And this is futures and this is showing for ES. Right now the expected move for tomorrow is plus or minus 28.5 points. So at the close today, whatever this number is, I would take the close and add it and subtract it to get the range. So that's one approach. And then I forgot to do that yesterday for SPX. So for SPX, what I did is I looked at the opening price and looked at the range for today. And at the open it was about 20.5 points. And I added that and subtracted it from the opening print, opening price for SPX. So there's two approaches. I can't say which is right, which is wrong. I haven't done this long enough. I've been tracking the weekly expected move for quite a while, but this is something new. So again, I can't say which is right, which is wrong. And you might try both. So far, let's just take a look at SPX. Let's go back and take a look at... So what I did this morning, I actually wrote down numbers for both for SPX, and I'm showing... Let's go to an SPX chart. So what I did is opened... So this morning, before the cash open, I looked at the current expected move for SPX and the closing price from yesterday. And those lines would have been at $41.33. So that's this line. I don't know if you can let me draw something that's a little bit more visible. $41.33. Oops. So obviously SPX would have opened below that. And then the upper range at $41.76, which is off this chart. So I think, you know, possibly given the... If you were just doing it on the cash close yesterday, that was before the Tesla earnings came out. So a significant event occurred after the close. So I think in this case, this is more accurate, showing this lower and upper edge of the expected move based on the opening print rather than the close yesterday. So again, I can't say which is right, which is wrong. You know, I'm just saying this is what I did and this is what it is. So, you know, you can try both over a period of time and see what makes sense to you. All right. So there's QQQ bullish and clearly supported by call buyers here. All right. Let's take a look at Tesla now. And this is definitely interesting. Definitely bearish order flow traders taking negative delta positions, mainly buying puts. So they are selling calls. This notional value, negative, negative orange line, negative delta, they're selling calls, but it looks like the put buyers are clearly driving minus 307 versus minus 91 for the calls. All right. So that is, let's just go back to the overall signal here. Bearish hedging flow for Tesla. And now let's take a look at something else. And this is from Spot Gamma Equity Hub showing the put and call impact chart for Tesla. And there was a note in the Spot Gamma AM founders note about this. And they have talked about this before. What they were doing is looking for support in the 150 to 160 level. So let me, I'm going to have to, so there's 150 and there's 160 for our rectangle around those two bars. And one of the reasons is that these curves, these are the, this is showing the rate of change of gamma for call gamma and put gamma. And notice these curves flatten out in this region. So this is the rate of change of gamma is decreasing as price approaches this level. And that's indicating that market makers gamma hedging should subside as the puts, all of these puts go deep in the money, their delta is approaching one, and market makers need to hedge is diminished. So if you're looking to go long Tesla or sell a put, this would be a good, probably a good time to do it. You know, somewhere between the 150 and 160 level. And this is why is this is showing that this rate of change of gamma should decrease at this level. Market makers hedging requirement is decreased and that should slow the fall, slow the drop and potentially support price at that level. All right, so let's go take a look at book map now for Tesla. Take a look at Tesla. So here's the view from the open yesterday. Again, the large drop after the close continue to drop and then the drop continues today. So let's zoom in on the current price action. Still bearish options. Traders are still taking negative delta positions. So if you wanted to day trade it, take it short this morning. Certainly a good setup. Let's zoom in a little bit more. Note the shift in order flow here. Make these dots a little bigger. So notice the quick run up up to the 169 level. Aggressive buyers with a volume dots. Also these small dots showing a buy sweep up into that level and note the shift in order flow. Green dots shift to pink dots and market traders are aggressively selling at that point. So this is showing market buy orders with the green dots up to this buy sweep and then market sellers, sell orders, aggressive sellers come in order flow shifts to negative and price continues to move lower as traders are buying puts. Looks like I need to add more lines below the 160 level. Alright, so there's a question in YouTube. Can I crank up the sound a bit and I wish I could. There's nothing that I can do to change the volume. I have the microphone right in front of my face. The gain is as high as I can set it. So I'm sorry, you might check your system to see if there's anything that you can do to turn up your volume. Alright, so there's Tesla bearish setup. RJ comments QQQ might have been triggered to reverse at the 319 volatility trigger and good call there. That volatility trigger did act as resistance and now QQQ is moving lower. Let's take a look at a hero for QQQ. So there's Tesla still going lower and look for it to stop somewhere in the 150 to 160 range and potentially a good long setup, whether you're selling a put or buying stock, however you want to approach that. So let's go back to QQQ now. And it looks like hedging flow did shift lower and then price finally reversed lower. Let's just separate outputs and calls. So notice that actually both of these lines are pretty flat. So options traders stopped buying calls and they have also stopped trading puts. Both these lines are negative. Alright, so RJ wants to take a look at zero DTE. So we'll do that. So let's go back to the total signal and take a look. So that's expiration today for QQQ. These are options that expire today. It looks like that's bullish. So that's not providing much of a hint here. Let's take a look at all trades, all expirations. So actually let's go back. Let's look at both, compare both. So far for all expirations, this is 508, 509 million positive versus 187, 188 million positive. So it looks like traders are, you know, most likely trading options that expire tomorrow as well today and tomorrow, but it looks like the total signal is controlling. So right now this is showing that options traders have stopped. So let's go take a look now at book map. Let's go to NQ. Since we have more information. So it looks like price stalled, not only the 319 volatility trigger, but also at the 13,200 level. And price started making lower highs. Notice the shift in the stops here. So there's a stop run up to that 13,200 level, shown by the rising yellow line here. That stops, fuel that final move higher up to 13,200. And then that stops and both stops. So sell stops start coming in. Cumulative volume delta shifts bearish, shown by the falling dark blue line. So order flow definitely shifted from bullish to bearish as the options traders stopped. Stop buying calls and stop selling puts. So that supporting hedging flow was no longer there. And the order flow shifts bearish, setting up a short and the NASDAQ. And let's just check and see how far NASDAQ is from the upper edge of the expected move and pretty far away. That's upright. So pretty far away still over 50 points higher, maybe 75 points higher, something like that. I don't have the exact number written down. All right, so that's the NASDAQ. So we've looked at the S&P 500, the NASDAQ and Tesla. Let's take a look at one other stock setup that was interesting and here's NVIDIA and the interesting thing about this. All right, so RJ notes that VIX and IV reversed at the same time. So volatility trigger, doing its thing. Are you talking about VIX in or VIX? So VIX in for NASDAQ. Let's just take a look at VIX. That's probably close enough. So the VIX reversed higher just right before 2 p.m. And let's go back to the NASDAQ now. It looks like the NASDAQ reversed first. Let's take a look at the S&P 500. It looks like the reversal starts about the same time as the VIX started moving higher. Makes this double top just below the 4150 resistance level. So for the NASDAQ I think this is an easier read. The reversal right at the 13200 level. Quick hundred point move down in the NASDAQ and also confirmed by the QQQ volatility trigger. The reversal of that level. So great call RJ. Glad thanks for spotting that. All right, let's take a look at NVIDIA and here's the setup that I want to take a look at. The reversal at the call wall. So the call wall acted as resistance as expected and note the large amount of liquidity at that level and that actually came in before the cash opened. It just increases from kind of a light yellow to orange to much brighter orange there. This is what I'm talking about. This is liquidity right here. And price makes a sharp reversal down back down to the 275 level. Nice short setup there in NVIDIA. And let's take a look at HERO for NVIDIA. And in NVIDIA there was a confirmation. Not much of a divergence setup there but definitely a confirmation with HERO confirming the move flow. So you're reading a combination of hedging flow in SpotGamma HERO and order flow in Bookmap to confirm that reversal at an expected level for the reversal at the call wall. And let's just take a look and see if there's any additional insight by looking at puts and calls. And not really. There's the total signal for NVIDIA. All right I have about a minute left is there any stock, any other stock anybody wants me to take a look at one final look at either an index or a stock. All right so RJ wants one more look at the S&P 500. So there it is. Not as clear a reversal level as the NASDAQ but still note the shift in order flow. It takes a while. This is pretty typical of the S&P 500. A lot of rotations before price finally moves lower. Note the final shift in order flow there. All the pink dots coming in. And this was just as the VIX shifted lower. Remember we looked at that. That was about 1355 right before 2 p.m. and that's when the S&P 500 shifts lower. And moving down now as RJ points out to the VWAP that's shown by this light blue line here as well as the 4135 volatility trigger. So you can watch and see later on if that level holds up as support. All right so Uncle asks what is the 4135 volatility trigger and that is Spot Gamma's proprietary Gamma Flip level and that's for SPX and this is converted to an equivalent ES price. Right now I'm using a price difference of 22.5 points between ES and SPX. So the proprietary Gamma Flip level indicates that market makers position below that level is negative indicating they have to trade with price to hedge their delta exposure that tends to increase volatility and then above that level like price has been trading earlier today market makers position on the camera curve is positive and they have to trade against price to hedge their delta exposure and that tends to subdue volatility. So now it looks like price is trying to break below that level and let's go take a look at HERO one more time for the S&P 500 the S&P 500 and this is definitely it's been negative delta bearish all day so price is finally turning over let's just take a final look at book map again and notice here the move lower comes in around 1354 1355 just before 2pm let's take a look at the NASDAQ in that reversal really I guess the final reversal was about the same time but it starts at around 120 so NASDAQ makes a lower high and finally the order flow shifts to bearish market sell orders so leading the way lower NASDAQ leading the way lower alright that's all I have my time is up for today I want to thank everyone for watching thanks for your questions and comments I really enjoy the interactivity thank you very much RJ for your comments really helpful today I appreciate it and remember tomorrow options expiration with the AM settlement and the PM settlement for SPX so we'll talk about that tomorrow so thanks again special thanks to RJ for your comments and I will see you tomorrow bye