with art the distributor, her relationship with lisa and gio, and her new relationship with earthwise, this company not only has wholesale distribution, it has national distribution. ♪♪ it is friday, times for options action in time lgs square coming up tonight on so many levels a classic pattern forming in health care and finally jets jets jets let's get right to it, a change of course could be in store for the health care sector carter will show us why. what are you hooking at? >> it was a very good week for

staples as well. first is a two-panel that is the xlv on top, a sector etf it is up and to the right. look at the bottom and yet we're just now moving above that power i think that is very important second is an all data chart, gig sector data. and it shows health care on top, and on the bottom is the r relative performance to the s&p. each and every time it has gone down there, it has bounced so two more charts chart of the xlv setting up, a good up trend. setting up and just moving

above, and finally that same chart up close and personal, there it is. the definition of a breakout, a two-year high, reasserting itself stay long, be long, get long >> what's the trade, mike? >> just looking at xlv, the etf that tracks this space one of the interesting things. one of the reasons we have been seeing that under performance for some time is such that ther is a great deal of evaluation. xlv has not. they have been side ways for several years, trading around 20 times earnings it is only the largest, it holds

united health company. they are pretty much unfailingly for a decade now, but that's really the only one that we can point to to show multiple expansion. and i favor using xlv rather than a stock like united health. the other thing i would point out is where we have seen elevated implied volatilities. xlv doesn't have very high implied volatility i was looking out to february, the 140 to 148 call spread it will cost about $2.50 to buy that $8 call spread. so this is a little more than we might usually look to spend, but this this environment it makes some sense and you can risk a relatively

small amount of the current level of xlv >> what's your take on the trade? >> i like the trade a lot. when you first look at the sector it is a little concerning but if you look at the weekly performance of this sector to the overall market this is the strongest we have seen since march 2020 you would have to go back to june 2020 for a sector that strong along with this breakout to new all-time highs i think it makes sense to play for the upside and i like mike's trade because he is using a call vertical here only 1.6% of the value chasing these highs. this etf is trading between 135

and 137. that will project the target to about 149 or so. so he is getting a three to one risk reward ratio if the breakout continues while only risking 1.6% >> does trading in that range make your conviction in a break out stronger >> if you think about the precondition for the range that is important you get ahead of yourself and that consolidation is tension. does go higher or does it peter out, and that is typically the beginning and it projects higher >> there has been a call on the fed talk, so you may be

wondering how to position resource if rates raise, tony what are you watching? >> i'm looking at bank of america they think is the best decision here. if we take a step back here and look at financials as a whole, the sector really testify to the market made no progress since january. i'm starting to see a little rotation here and i thinkit might be time to take a look at this we saw the breakout here and now we have come all of the way back to retest this level especially if you attack a look at the ration you of net interest to net revenues and this is one of the highest we have seen. i think bank of america is bex

exposed here to the rising interest rate environment. when we look at the options itself right now they're extremely expensive. so very expensive. so we want to utilize one that we don't talk about a lot here on the show, it is a short-put so going out to january, going to sell the $43 put options, now i'm able to collect about $121 for that option. that's about 2.8% of it. you have an obligation to buy the stock if they're below that strike price by the january expiration if you own the shock we're getting about .78 cents a year

so that is a strategy that i want to take to get potential exposure to the stock in the next 35 days i know there is some options fans throughout that also watch ed other shows, they made real tiff highs seven months ago, so what do owe sue for bank of america? >> the banks have not been worth the risk, right? and thinking about bank of america, tony has singled out one that is behaving better than others i'm not embracing individuals in

particular >> what do you make of bank of america and the trade, mic >> it's valuation is not incredibly high if is troublely 13 or 14 times earnings. this is a good strategy and a good investment strategy consistently applied i'm servous that the put sell is the way to do it >> a rare decent how do you address the concerns about selling puts and carter saying you don't want to be long any financials. >> yeah, you don't have to have a reich in bank that's will be

profitable but to mike's point about selling puts, i understand but that is why i'm doing it with the high implied volatility. >> coming up, a flight path for jets you might not expect. check out options action at cnbc.com also seen up for our newsletter. also seen up for our newsletter. stay tuned with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

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welcome back, christmas is just a week away and millions will take to the skies and we thought it would be a good time to fly into the holidays >> we're taking a look at the jets the etf it tracks the airlines more than 50% is the aerials warren buffett once said be fareful when others agree. but we had a lot of news recently that hurt the stocks quite badly and the companies themselves officering aggressive

price cuts and a lot of these companies look quite cheap if we look at many of these they're at low that's have not been even since the exception of the etf. the other thing that i would quickly point out is the options are unsurprisingly unproductive and that was the purchase of a february 21-20 call spread nap would cost about 25% as a way to play for a social bounce here. i again would have liked to sell downside if i could, but i'm not really comfortable selling puts despite the fact that they're

exceptionally expensive. >> let's look at three the first, and this is the one to focus on, the first chart shows the atf doing nothing and then you see this plunge there from 30 to 10. and it recovered right back and now it has giveen back half of that in the past 22%, 23% since the new covid strain hit, we have something of a double bottom here, i think you can get a dollar or two out of this. play for a bounce. that is the floor. >> what's your take on this all? i could not agree more the pull back here is down to

that $20 level and i think that is a great opportunity not only is this etf more than 50% airlines, but about 60% are u.s. and north american airlines it is pretty much back to prepandemic levels unlike europe that is down about 20% and asia down about 40% so the exposure to this is what i think is the important part of this and that 20% decline is the confusing. they are limbing losses to 20% of the value you're catching a falling life here and protection, i think, is more important than anything else if you get that bounce, i think it is just the cherry on top

this trade in plaintiff really feels hike you have to do it. >> that is exactly right and that is why we're using a structure like that one. there is still a lot of unknowns if we get a bounce it would take a decent bounce to get there it was just over $20 i think at the close. the lower strike may not feel just a dollar away, but of course you know we are still talking about a material percentage if you get a good size pounce this is one where you want to take some profits and this is a trading strategy, not an investment strategy. >> we're going to go back, and we'll have more options actions after this

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it was the lower end of the historic valuation range perhaps you're getting to a level where the stock can't have a whole lot more damage done i was looking out to dez and the 205 and 225 call spread. you could spend about $6.95 for those and it was about 575 to put the trade on >> daning 7.5% since then. it continues to evolve what do you think about that >> this was a position that did expire today now remember we had a 205-225 call spread on had you not taken profits, they basically tripled the value of

this position. if you do not take profits the long call option that you held expired and would exercise automatically. meaning when you open up your account on monday you're going to find that you're now long amgen. the short call has expired out of the money this is basically from a profit andloss perspective. i'm still bullish in the space, and the xlv trade is evidence of that, but being long in the stop sheer a long risk call >> carter, what's jr. forecast for amgen at this point? >> in october, it was about 27 pakistan we were taking advantage of the weakness

i think the bench continues. it is a small upside >> up next, tweets and the final call nd 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. ♪♪

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♪♪ welcome back to options actions. here is the best tweet calls for january of 2022. tony, what are your thoughts here >> this is a really volatile one. it is trading back near it's ipo opening spective given the volatility is to use a call spread here. they spent about $7.50 for that. risking 7% of the stock's value. near the support level to play for a bounce if it breaking the

low it is dropping significantly below that risks less than 7% of the stock's value is the way a i would go >> what can you tell from this chart if anything. >> just stay away. >> that's clear. >> mike, how would you trade it? what's your thoughts here? >> i lay forward in the space and there is exposure there. i think there is more muted exposure that's the way i would lay the space. >> that's a nice way to say stay away a big double bottom in kraft-heinz. options action caught the big move up is it time to go long even with a serious cream cheese shortage how do you like this one >> first thing was back in

february, but you are a chart watcher extraordinary. it moved up to a level of overhead fly the question is can it push in, and the thinking it yes. i apply for about 38 here. >> mic, do you like this one >> i do and of course it is somewhat correlated with the events that we put on. so i do like it that way, it's di consistent with what we said >> any thoughts on the cream cheese shortage? >> this is a double bottom that is valid, but i think staples is defensive and a good place to play for upside. >> there could be a cheesecake

shortage this is serious stuff. news you can use plan ahead someone bought 5,000 amd calls on the streak that expired in february with the merger closing at the end of the year how do you look at it going to 2022 mike what do you tell mike >> let's look at those calls they're very high premiums about $10. about 7%, so if would have to go up more than 12% for those to break even i think the better way to play this is to look at a spread. very nearly after of the premium you would lay out and cutting that, lowering your break even setting. >> all right, time now for the final call carter, what do you say? >> health care is a great place

to be. and xlp is the vehicle to do it. >> play for a rise in interest rating with bank of america selling call options >> spreads, i don't want to be short puts >> we'll be back in the new year, have a good one. >> this is a paid advertisement for csn. >> well, you know, folks, it's official -- we have turned the page on 2021. we are going into 2022. my first opportunity here to offer to you the brand-new-design american silver eagle in its first full year of production -- in its first full year of production. to recap 2021 -- i know we're moving on, but to kind of recap, the united states mint, as they changed the design of the american silver eagle, when they announced that in 2019,