i'm so grateful that you picked our company, and i just am excited to see where it goes from here. lemonis: i look forward to that partnership. scott: we appreciate everything. we really do. lemonis: i look forward to it. scott: thanks, man. happy friday, option actions fans i'm scott in for 3melissa. here is what is on deck. >> will ups pick up where fedex left off pass the packing tape. ready to deliver for you playing to win, toney is laying out all his cards >> a look back and a look ahead. powering through the next leg of the energy trade why idling could be the best

thing for your profit engine right now. time to risk less and make more. options action starts right now. let's get into it right now, delivery stocks as online sales post record levels another name in that space is ready to deliver for investors the professor, he kicks it off with your call to action hey mike >> we are taking a look at ups this is an interesting situation. we have the s&p here trading not far off its all-time highs we are seeing epic valuations. this is a name actually trading at a relative discount 14.6 times forward earnings. you look at this and say there could be valid reasons for that. we did see that big up tick in e

commerce but that b to c business margins aren't as good as in the b to b and thinking maybe that tail wind turns into a head wind. some of those pressures on margins could be alleviated. if we see a little pull back and people go back to shopping in person, i think ups is a big opportunity here they reported earnings in february and we look forward to them reporting some time in april. one of the things we could look to do is buy some of the at the money calls. looking at the 165 calls and then selling those calls against it it would cost a little over $5 to put that trade on those 165s were seven and a quarter and then a little less

than two the idea is to try to collect the premium in the faster, upside options a lot of times, we are trying to get a net debt we are actually spending the difference and remember, that option expires earlier than that longer dated one in this situation, the stock has to trade well through that ups is one of the few places we can look for a value some of the concerns are overblown about how they come out the backside of this pandemic that stock looks good but how about the technical and how does it shape up? >> often, you get a good beat out of one you see that with a chance to get out of the other while the earnings aren't immediate, let's look at those

two charts we have a stock that has ranged for three years and a powerful resolution of that three-year stand off. the second chart that stock is consolidating again. that setup and betting here that this side ways act it remains a massive underperformer for the market. fedex coming to line with the good results, fedex will also come to life a comparative chart is straight forward. this is fedex and ups. on the here and now basis, the thinking is just is as fedex came life, having been a dollar, we think ups is about to do the same thing >> thank you does the professor's trade pass the test or what >> it absolutely does.

i think both on the technical and fundamental side, i like this trade it has great setup trading range between 158 and 168 looks ready to break out here on the upside especially fedex's earlier breakout today is the template we could use in the business, you look at the fundamentals, it looks quite strong here. 20% year over year revenue growth i expect we'll see meaningful recovery on that for those reasons, i think trading at 18 times next year's earnings i think this is a company that is fairly inexpensive. looking at the trade here, he's choosing to trade the april 170s and trading a little more of the vertical width here which will start to underperform if ups breaks out above 170 that is what i'm expecting iej expecting a break oout into

the 180 area i would give myself a little more room to the upside. >> i give you my last word since you had the first word with the trade. >> i think the key issue here from the fundamental standpoint. new management, new ceo. they are a company that has been challenged in the past but they are focusing on develops in the it space and that will help them tremendously and particularly sort of managing those peak demand periods they've struggled with in the past i'm optimistic going forward it is a valid concern. if some is of you have that concern, you could look to adjust that strike higher. the market is looking at a level where it is hard to see it shooting higher. i just want to belong that longer data call >> we were just talking as well as gambling during fast money.

let's turn our attention now to the reopening trade. tony is all in on casinos. he's about to line up a trade that could be a real winner. get it, tony >> i get it now. so i wanted to take a look at the pull back here from wynne this week as a way to get into this reopening trade in casinos and also march madness in fast money. if we look at the long term chart of wynn. it has been an underperformer since 2018 over the past four weeks, it started to break down the down trend. higher highs, lower lowers if we zoom in to this break out, the stock broke out and quickly rose to 137 and has spent the last three weeks console i had dating going side ways and pulling back a little and the

opportunity to seek exposure when you look to wynn, they are fairly well diversified in the casino space in macao, vegas and even the east coast. and the online voting bet bowl this is really the segment of the market that is fastest growing is online gaming i like the stock i think it is likely going to break out here when you look at the options here, the implied volatility is a at a 52-week low it is relatively cheap eye looking to go out to may and buying the 135, 155 call vertical here. spending about $11.20 for that 135. collecting about $4.55 net net here i'm spending about

$6.85 on this debt spread. risking only about 5% of the underlying stock price it is important to me given that this stock is trading at a high. we are going to a softer market here i want to protect the down side using a vertical spread like this >> got you tony makes a compelling case he gave a list for all the reasons why this is a great trade now. what about the technicals and the charts >> sure. and you heard him refer to the break out above the down turn line and pull back which are technical in terms of those thoughts the key here is there is some overhead supply at 150 it is a case you do want to do it through options instead of being throughout right stock there is buy biforcation in the

space and opportunity for the risk >> mike? >> i'll leave it to these guys to talk about the technicals it does seem fairly fully valued here tony is talking 2018 that was when they did about $6.7 billion in revenue. they've taken on about $3 million in debt. we are not going to see those numbers again until net 2023 those will wipe out all of the earnings when i'm taking a look at that, i'm thinking maybe we'll take $3 or $4 a share in 2022, maybe not even as good as that if you are playing for a breakout, that's fine. i wouldn't be buying the stock

here >> it is one heck of a chart up almost 200% in a year. check out optionsaction.cnbc.com and sign up for your news letter here is what is coming up next coming up, carter worth looks at energy trades and why you should just sit on it. we'll explain. >> tweet us your question @optionsaction. if it is nice, we'll answer it on air when we return.

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♪ ♪ welcome back to options actions. it has been a rough week to say the least. there is your chart. tracking the space falg 7% just since monday and on this exact situation. >> we have very high implied volatilities as well these companies have high levels of debt. they are tied to something volatile as well, which is the reopening. i think this might be the opportunity to expect that xle could hit the pause button here. i was looking at using a calendar put spread specifically

looking at the april 9 weekly, june calendar spread looking at those weekly options because those are the ones we are seeing a very high implied volatility >> all right, mike, so far, so good still plenty of time left in the trade. what do you think? let's get back to the chart master you got a problem this week. rates up, oil down >> oil down 14%, gaz owe lean down 12. energy had a selloff what we know is from the october low. just think about this, skxle isu 100% versus 20 you have three district draw downs. down 10%, down 13. >> the second chart puts the

draw downs in context. we've been in this well-defined channel. the period in which it has doubled. how long does it take to recoup. after drawing down like this, final chart. just to get back to the top. typically, more than a month so if one is bullish, it is time that is the problem. if one is bearish, it doesn't get back to the top. the point is trade from two weeks ago, it is likely to get fallow now and short volatility is the thing to do for energy. >> you've seen the analysis and carter's work. what do you do next? >> just talking about what is going to happen for both the price of oil and energy seeing a

sharp rebound and the tale end to the shut down we have experienced. seeing a light at the end of the tunnel one of the reasons you have volatile taking place. we have both supply and demand it is not so easy to ramp and decline on the consumption side. that creates the near-term volatility you start to see a lot of price volatility that starts to stabilize here at levels where we are right now that was one of the reasons we expected it to falter and one of the reasons we expected it to stabilize here the fact that near data implied

volatility the options that expire and relative to a little further out in time. whenwe first initiated the trade was the april 9, june 50 calendar buying the june and trading the april puts against it. the june 50 puts are higher and april are lower. the dynamics still exist some of you may still have this trade on, i suggest you stay with it. for those of you who don't, i think there is time to put the trade on >> those will decline more rapidly. these types of trades have a higher volatility of profit and in the space where you need something to happen. the other thing is, the other short premium to sell options.

this is a more risk limiting way to capitalize on that siem dynamic. >> okay. tony, does it make sense what do you think? >> it makes a lot of sense referring or being short volatility one of the reasons we do that is being short straddles. we ooshlly don't use that type of opportunity here because it has a lot of risk and takes a lot of capital the calendar spread is a risk strategy that mimics a short stradle trade. the question is the timing on a short stradle. many investors feel it is best to sell short when they've identified an established range. realizing it is best after a big move that's what we've seen here in crude oil. looking at the exhaustion in crude oil. we got that major correction in

the past week and stabilized in the right level. getting right back into this trade if you weren't already from this last week. >> good stuff guys, coming up, you ask, we answer tweet us your burning options and you might get your answer on the air. we are back right after this i have an idea for a trade. oh yeah, you going to place it? not until i'm sure. why don't you call td ameritrade for a strategy gut check? what's that? you run it by an expert, you talk about the risk and potential profit and loss. could've used that before i hired my interior decorator. voila! maybe a couple throw pillows would help. get a strategy gut check from our trade desk. ♪♪

it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks.

we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪ welcome back to options actions. our first viewer asks how would you trade coveredcalls for apple off its high of 20% and stuck between 120-128 for the last few weeks >> this is a great question. it is important to remember that covered calls are really an investment strategy. that's when you sell calls against stock thau own stock like apple tend to be a long-term holding. if you've been selling calls steadily as stock has been rising at a steady rate last

october up to that high and you continue to do that on the way down i think this is an investment strategy you can stick with. that still remains relatively high 20 to 30%. this is a good investment strategy high valuations for apple this is not something you can stick with despite the all-time highs. >> what is wrong with bank of america? is it going up or down it brings us full circle with the fast money in the banks. >> sure. >> what is going on with this stock is to the right and all financials bank of america outperformed every year for the past four years and now it is flagging a bit. i think you go with a 39.5 put and fade this very strong move

>> okay. tony to you. walgreens thinking of going long since may 1, everyone can get vaccines do i sell two of the july $62.50 calls and sell the shares. >> i like the technical shut up of walgreens and the fundamental thesis the only comment i have is that the july options that are roughly four month from expire operation are a little too far out. i prefer to sell a shorted data option and collect a little less premium and do it faster so i can do it faster before that january expire operation for the long option. >> one quick one slv or the silver miners in general? >> in general, i like it all this is sort of the no man's

metal. you've had industrial metals and gold is under pressure silver is ranged it looks like the u p everyone s chart. it gets resolved up, not down. >> we'll take a quickie and come back to the final call next. m so on options trading, and look, it feels like i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪

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♪♪ let's do it, final call, carter, you are up first >> ups, exactly the same price it was seven months ago. that's a long time going side ways resolution likely up >> tony? >> i'm betting on the reopening trade with wynn buying a tall vertical here. >> michael >> call diagnals on ups are the way to make the bullish play and stick with that xle put

calendar >> good stuff. great weekend here we'll be back next friday, 5:30 eastern. don't go anywhere, "mad money" with jim cramer starts right now. - [announcer] the following program is a paid advertisement for nuwave oxypure smart air purifier sponsored by nuwave llc, featuring deborah norville on award winning journalist and new york times bestselling author. - we are all living in strange and unsettling times. never in history has everyone on the planet been challenged by the same thing. covid-19 has changed the way we work, the way we interact and we're all still trying to figure out what it means for our future. amidst the uncertainty, all of us are trying to take care of our families as best as possible. i've lost track of how many masks i've made