>> for the first time the game is getting back towing. while the guys are getting ready, here's what's coming up on the show. >> it's a guy, it's a bird, it's a plane. >> no, it's just shares of amazon, if you messed the move, relax. we have a way to buy it for just $20 bucks, plus, talk about a bank job! >> this is a robbery. >> after a run, financials have under performed in the market this year. we have more pain next week. we'll tell you how to profit.

and chip stocks are on fire. but there's something in the charts that's indicating a run might be done. we'll tell you how to cash in. the action begins right now! >> let's get right to it. the banks have gone from hot to no. financials the worst performing sector in the last month, down more than 4% t. sell-off comes from wells far go, kick off big bank earnings next week. could there be trouble for the space? >> dan. >> obviously, they outperform since the election s&p 500 up 10% t.etf that tracks bank stocks is up 18%. it's nearly doubled that performance, year-to-date, s&p is up 5 performance. i guess more importantly the s&p is near it's all time high t. banks stocks as mel said, some like goldman sachs are actually down on the year, they're showing very poor relative performance. we speak about it on this desk, almost every night, it seems

like this year, what is driving the market? one of the things that will continue the strength and obviously it has a lot to do with the legislative agenda perceived to be pro growth. it hasn't got on track yet. one of the things driving the banks is deregulation. >> that doesn't have to be legislative. >> that could come from executive order. one thing next week we will have a lot of bank ceos who are not particularly clear in the near term. therefore, we may see guidance that they reflect that. >> one of the things i would point out, these stocks if you look at them on a historical metric are inexpensive. certainly relative to the market, most of these things are trooi trading in the low double digit, between 12 and 14 times forward earnings estimates. relative to tangible book. they look good, return on equity is pretty good t. fact is they

have been cheap quite a while this boost basically has made them a little more expensive than they historically have been. whatever seems unlikely, whatever happened in the past, it is largely legislative, regulatory basically trading in the financials, it will have a huge impact unless they address that specifically. >> the thing about financials is while they might be cheaper than historic am measures, they're in principle not going to achieve the ways of other market cycles, in the sense that they have business lines that will never return. but if you brought it out, it really is, we know it's been a year of defense, right? everything that's big, industrials, energy, financials. all, in fact, financials are relative on its peak december 8th. they underperformed in december. with ep they broke out, there was a lot of high 5ing, i'm winning. no you were losing, banks were under performing the market. it doesn't look like they are getting better. they're almost a few intermediate low today if rates. it's a bad place to be. >> the rate train is really

important. when you think about it, look at all the disappointing economic day that, talk about gdp, all the sales, it seems to me the job is dated today. there the a lot of things that can go very wrong for the banks. the biggest issue is, if you decide to do deregulation by executive order, i think that betrays a lot of that populist message in the campaign. i'm not sure these couple goldman sachs guys do it on this watch this quickly. before he had momentum on the legislative stock. >> what about the trade? >> let's do it. 50% of the xlf will report over the next two weeks. to me when i look at option prices they're relatively cheap here. when you have gains, you want to hold on to them, you think over the next couple weeks, we could see volatility, to me i think it makes sense to look at the xlf as a hedging product or make options to make a defined risk bearish bet. to me when it was trading 2360. you could look out at april expiration, about a

23-and-a-half put. playing 27 cents, a little more than 1% of the underlying stock right now. i know that it is just for two weeks. when you think about all those events, you think about everything we are talking about on a daily basis coming out of walk, this looks like a dollar keep way to hedge at least a. bank stocks or make near term bearish bet. i will mention this, you know, 1%, that's what you are ricking. 136r789s i think there is a good chance between now and april 21st, you will have a down day, you can look to spread these things. >> it's a narrow bearish view, would you make that a longer bet? but you are negative on the group. >> generally speaking, i do favor, you know, if you will be long options, being long, longer-dated option, definitely makes a lot of sense. the decay is less. but the difference that he has identified a specific catalyst. it's likely if you get some movement, the movement that you will get. to me i can why you do that. >> there are longer term. they make it a case, we have a

structural low in financials, they have a chronic under performance, that's to be determined him for now we know it was a trap. yes, it outperformed for a bit. anyone who is in it now is not liking what they're seeing. >> i'll just mention this, that the xl trades 2360. banc of america 2320. few look out two weeks, the bank america put options are much more expensive than that of the xlf ones. >> that is for a good reason, there are a lot of idiosyncratic risks. i may not have the same effect. >> they have a rick, clearly, anybody that has excessive exposure. >> the waiting is in asset managers in the xlf struggle, you have fairly extended insurance names. >> naturally a group of stocks on fire the chips, the semi conductor is surging more than 45% in just 12 months. it is trading pennies away from it's all time high. the run has been led by names

like nindividual you up 143%, mike chron up 171%. applied materials which rallied 87% in the last year. they have been sizzling. nindividualia is surging 25% this week alone in interest. the cart middle easter thinks the record run could soon be coming to an end. what are you looking at? >> this is the leading obviously tech name in terms of performance. what we have if you look at the dak and the s&p 500. 135 plus or minus. assemblys were number one in 2016. the top ten in year. n vidia has an incredible run. there are a couple things i would keep in mind if one is thinking maybe this can continue t. first would be this. if we know that uptrends and downtrends are characterized by counter-trend movers the uptrend in the semi-conductor index has not had a check back. do you use the average or the

1r5i69z i do, it's not a check back. here's the statistic. since the beginning of do yata, there has been only one instance where it has not checked back to trends in a 12-month period. so we are now in our tenth month. if one is making the bet that this somehow will break in another record, then one stays with it. but the question is, do you trim a great winner like this? so at this point, i'm thinking it's a bit too far too fast. there is all the news you could want, which is there is a lot of mna coming. individual securities will not only do well on their own, but the self driving car is changing the way things are going. at some point, everyone's, yeah. and trade is crowded. and there isn't a lot of upside. so it's my judgment that one would want do reduce exposure to semis in general and then invidia, in particular, has all the look and feeling of a topping out formation. >> you know, i mean, pretty simply, from a fundamental

perspective, he's right t. reason everybody is in there. nyidia that makes gpus, there is a future. on top of that, they had phenomenal growth and they're in a business that will be likely successful in the future. from a technic alper specttive, i can see he talked about it being stressed. also the evaluation has gotten aheads of where it historically traded despite that high level of growth. i think what you can do is look out to june, put tread $6.20, sell the 80s against it for 80 cents, that will basically give you protection out until june. >> that will chap your earnings, with i they will be report income may. obviously, there are a lot of other things the market had quite a rin since trump was elected. we talk about width, weather, or a pullback earnings, could provide that for this name or it could provide it for the market generally. >> wall street sentiment has sort of soured in recent days with nvidia, gpu deceleration

and the switch to a lower margin. >> those are the things to watch. late last year, there was a couple downgrades when the stock was up 200% on valuation. that's kind of like going like this in the air. this is a little different right now. there is pat love competition, a lot of mna, they are going after these guys in the space. when you think about that, december and then. >> right. >> and then it's making lower, the gap underneath. >> i think, listen, i said this on "fast money" the other night, i got so much hate mail on twitter about nvidia, i said i think it's going back to that 82. >> all the fundamental strengths that the company does possess is sat some point in the future. self driving cars, it's not next quarter or necks year. basically that growth opportunity is quite a ways away. if investors don't see the returns quarter after quarter, they might not see them after several. they might lose patience. >> got a question out there, send us a tweet to

optionsaction.cnbc.com. check out the super cool newsletter him millions of you already have. so don't wait. in the meantime, here's what's coming up next -- >> i ain't paying no 50 cents for no coke. >> well, that's too bad. quietly shares of coke have been on a rally. we'll tell you just how high some traders see it going. plus, it's amazon's world and we're just living in it. but if you missed the move in the stock, we've got a way to buy it for less and we'll explain how when "options action" returns.

. welcome back to "options action". i'm domenic chu. probably one of the single biggest stock stories of the week had to be what happened with amazon.com. now that stock ended an eight-day winning streak yesterday on a week where we saw three new record highs in succession, which means that amazon stock has now made 11 record inter-day highs just so far in 2017. now despite the momentum pause over the last couple of days, the total market cap of the campaign increased by $6 billion this week alone. to put that in perspective, that's nearly as much mark cap in a week as ralph lauren as a company is worth.

or it's the total market cap of kohl's as well. if you think that's impressive, try the 20% in the stock this year. >> that translates into a whopping $71 billion in added market value or like roughly adding the size of american express. but can that run last? according to facts that 89% of analyst versus a buy ring on the stock and the remainder 11% have a hold. the average target price is 8% amove where we are now. after a listering run like this, there are a few traders feeling more cautious about more potential upside, melissa, the stock has reached what some say overbought levels or upside in a relatively short amount of time. >> that doesn't happen very often statistically speaking. amazon the debate going forward, guys, back to you. >> thank you, dom, dom chu. you have gains of a stock looking to buy. mike has a way to do that with less. he is over on the plaza. we look at the stock with strategy.

>> sure thing. this is still a bullish strategy. it's a more conservative one. number one, we try to look at situations where we try to protect future gains. obviously, amazon qualifies. secondly, this is something you don't have a margin of safety. stocks that might have a high valuation. finally, situations where you might have capital constraints, amazon is a very high dollar stock. owning a hundred shares will cost you $90. maybe it's a cheaper way to take a long bet. we are basically trying to identify where we think the stocks could go, number one, where it's come from, so the risk we are trying to avoid. right here we see the stock closed right around $900. what we can see, by the way, this is trading on the highs, we can talk to carter about this. but i was looking at the 925 level. because i think that if it's going to break out, that itself number you will sister to look for. so just looking at the trade, i think you can buy the 925 call and 26.10 for that. sell the thousand strike call against it for 7.85.

>> that will give you more than 10% to the upside t. net price just over 18 bucks. you will be risking a relatively small amount. you get to commit less capital to the trade. if it does happen to pull back, you will obviously not suffer the same losses. you get to participate to the upside. >> do you like that level? >> i do. let's talk about the levels. what do we know? is what, the stock broke out to new highs, if it was trading 9 r 850 in october. up 5% in five months, meaning it's a classic breakout and put it in context, the market is up 7, 8%. you have stocks that under perform the s&p over the last five months, so how is that extended? all them highs is an irrelevant thing. amazon is an extended thing. it's not extended at all. i like it. i like the trade. >> listen, the stocks are 85% from february 2015 mode. 85%. >> what are the earnings and the revenues up? >> not up to 85%.

i mean, that's a fact. okay. i mean, ima just telling you. we know. >> it's not about that. >> 8003. evaluation is not about. if you get into the charts, there is not a steep angle. right. >> can i tell you what is steep? gaining a couple hundred million dollars in 15 months, market cap. i'm saying, wooer actually witnessing things that we've never seen before in this market. i remember what it was like in '99. >> and there has never been a large cap stock, u.s. steel at its highs, in the 50s. there has never been an asset this large growing at this rate. >> people recognize this not as a business but all businesses. right. so when we look at the weakness in retail, that's because amazon's taking over. when we think about the risk that something like netflix might potentially face, amazon is one of the places you will look at. when you are dealing with microsoft and oracle and alphabet and their cloud business, we're concerned about aws. >> let's see this, first off,

danny is a big respect tore. do you think the chart looks to slow? >> you are at 850. my point is this. a lot of very smart people, this is going to be the first trillion dollar company. not apple. okay. pause what you guys are saying, it's all things to everybody. but it's important to note, what everyone is saying apple will be a trillion dollar company, it had two 40%. the stock has not had that -- >> do you not like my strategy? because you wouldn't bother participating in am zoen? >> it's fine. >> it's $50. it will be risking one-fifth of 245 amount. >> it's a classic oh trade. doing something -- >> not real. up next, shares have been bubbling higher for coke, we'll tell you why when options action returns.

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welcome back to "options action". it's time for the upside call when we look back at our winning trades, last month they played calls for a blakeout. >> so what i'm thinking we will hear back here and ultimately get back to the highs. it's about a 10% move for coke. it's catching up with a group starting to outperform the market. long coke. >> i'm looking out to may and buying the 42 calls. they were trading around 95 cents. they'll probably be a little cheaper on monday the stock goes x dividend that day. that's an inexpensive way to make a bullish bet? slayers up 2%. what are you seeing in the charts now? >> that's pretty much. what do we know? we know since march 1, staples are outperforming the market. coke is outperforming staples. >> mike? >> i think one of the things you probably want to think about doing is stretching the trade out a little bit if you want to do that, we are up, we are up 15% on an option, i mean, honestly, we are probably

looking for returns a little better than that. you can give it a little bit more time. options are cheap on coke. can you probably go at it another couple months. >> we can't all be winners. back in february, dan said the run on johnson & johnson was over. >> when the stock was trading 122 today, youco i would boo i the april 120 put at a $-and-a-half, that breaks down to 118 canaveral, down 3%. selling on the stock price, you have a break even down 3%. a stock that rallied 10% in a straight line. >> shares have risen 3% since that calm, so dan, what do you do now? >> they're up a lot more. this is one we updated at least online. a lot of premium directional trades, when are you out about 50% of your premium that you originally said. you got to cut it t. probably of it being absolutely worthless is very good at that point. here's the thing, they will report earnings on april 18th. if you haven't, the options are worth 33 cents. at this point you have to keep a

lotto ticket, you have to make a decision. >> i understand why it might make sense to sit there and say you want to cut your losers. that's good trading device. when options decay. you instead think to reassess the situation. to your point, an inexpensive option you can get a lot cheaper f. the catalyst lies ahead of you, that doesn't niecely mean you want to get rid of it. >> up next, your tweets and the final call from the actions desk. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim.

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hthis bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade welcome back to "options action," time no take your tweets, first is from peter. . well, i would say the first thing is that you know the price of these call options is as low as they have everybody been and we're trading right at the all time highs. >> i think it's playing with a

breakout right at a former high of 110 october highs set up at amazon, i'm a buyer. >> dan. >> i who you would say breakout about 110 at that double top to 120. the all time high deal. >> next up can you ask cart hear what he thinks? >> i think gold is improving. i was here three weeks ago saying gold is under pressure. that's wrong. gold is turning again. whether it's because missiles are flying, gold is headed higher. i would abandon shorts and be on the long side. >> would you, mike? >> look, it's a flight to safety, typically, when you see geopolitical issues going on. we are basically from a bull market. so you don't have a lot of other places to reach. so it makes sense for that reason. typically, i'm not much of a gold buck. >> last call. carter. >> well, semis have come a long way, i think you want to take profits. i would particularly mindful

nvidia. >> i think you should look out to june. 9,000 call spread. >> short dated options are dollar cheap. you look at the hedges out there on a bearish strike. >> it looks like our time has expired. i'm my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends, i'm just trying to help you make money. my desire is to train and also to educate and teach. tweet me @jimcramer. the u.s. launches surprise missile strike against syria in response to a