he was a, a cocky, arrogant guy, and he wanted to live a certain lifestyle, and he did this to get the funds to live that lifestyle. >> well, it's the first friday ♪♪ after the olympics and it is times for option action. lights from the nets tha market in times square welcome, i'm melissa lee tonight, carter is calling a intermediate in th commodities. tony's - the bargain bin that could hel keep your shell stock in the consumer sector. our, let's get straight to it. despite uncertainty, financial geopolitical, you name it. investment markets are rising. crude is not the only commodit that is on its near term

ceiling. carter, what do you think? >> well, before we get charts, it's important to think of it. we really had a loss this week in the collapse related to ukraine. ukraine is a big producer of oil. spike thai, closed poorly. gold and other commodities a well the first chart is the bloomberg commodity index. it has not only that gas oil -- cotton, sugar and so forth now, second chart. this is the exact same char bu it has literally been perfec from the covid low a perfect 45 degree angle. i like a pinball, it's at th bottom of the channel. we have a circumstance where i think it faded the true third charge depicts, if you were to draw arose, where we are in this thing the etf to trade, final church is the eye shares s impede

this case it blew through th top of their channel and is no falling back we want to be fading this. if your short seller, self short. >> all right, we've got mike o the phone to michael, what is the treat here? >> the first thing i would say is that carter has made some phenomenal calls in th commodities space over the course of the last several weeks. he made those and wheat, corn, silver, gold and all those proved to be quite prescient. so i wouldn't be inclined to bet against him at the point at the - as a former floor trader, what we saw yesterday in crude oi was very close to one of the more barest signals you coul see. in those situations where yo take something - gas open higher, close lower's. the first month, the gta futur

didn't do that it was higher than it fell below. it did recover to be slightl higher but crude futures actually did see that pattern we saw the december crud future for example, trade high then fall about 9% at close, day over day to me, that definitely looks like something you want to fade one of the ways you coul potentially play this, if yo are looking just to make a general move on commodities, i with the etf g f. g. the s mp commodity index trust now this is an interesting etf because it has about two billion dollars worth of marke cap. it is a trade a whole lot of options. the options prices actuall seem quite reasonable. when you're looking at a situation like this where yo want to put a trade on something but it doesn't necessarily have a tremendou

amount of line, that's one o the things you want to do. observe the bid spread if it's tight, see if there' decent liquidity the other is, use borders. this is a situation where i' not expecting huge boost of th downsides. the other thing i would poin out, the term structure implie volatility that is the price of options i inverted neera dated options are more expensive than longer date one. calendar spread, specificall looking at selling april could collect about 47 july, about 85 cents so, the total risk on this trade is 45 cents. the goal is to achieve max profits. if this etf down to th calendar spread, 19 bucks to speak. it would be a decline of tha 5% or a little bit more from today's closing price. >> tony, what do you think o the street >> as carter said, gst covers

wide variety of commodities bu it has a 60% we hear an energy if we look at oil, i think w all agree oil is quite exhausted here it's treating against that trend line there's probably a highe probability that you see a decline here in oil. i will see the biggest ris here is your political on th oil front that could potentially see some highe prices if things escalat further. that's really why i think usin a foot spreader, using a option strategy like mike is using, would be the idea strategy when you have a calendar lik this, the tricky part is picking the strike paris it has a risk profile simila to selling a - but it has limited risk. it has the benefit of that however, when you think abou what strike price to choose, you have to pinpoint where you think it will end by that firs expiration in april. if you look at the 90 days short price mike has chosen, that's about a 25 delta. the 18th strike which is a lower strike is only about a 1 delta. so, i think that right now 18, 19 strikers were really where

would choose to see that mov here i think 19 is a pretty goo strike price to choose a conservative estimate as t where the etf will trade dow to buy that april expiration getting you about one and half to one risk or ratio. risking only 2% of the etf value. very great way to play, in m opinion. >> carter, tony had mentione the oil within this index. is the oil chart virtually safe? >> if you see the difference between the blubber commodit index and the gsg etf, in th index, which hasn't broken above the channel -- whereas the death exploded above it the broad index, oil is 16%. so, energy at 25 versus a 60 wheat in the etf but oil to be basically -- not good >> all right, for commoditie

to retail, consumer related -- buying train mercille -- shares are down more than 12 since january. but 20 says it could actuall be on sale tony, what are you doing >> that's exactly right. i think it is on sale. the reported earnings and if w look at the chart here especially the longer term care this is a stock that broke out above the 63 dollar level back in november of 2020. ever since that, it's really just been range bound betwee 63 and about 74 or so to the upside but one of the things that you can see if, you look at th relative chart, what you see i that we've started to see some real out performance here back in december of last year and continued into the marke weakness we've seen over the last couple weeks. so this is really where i' starting to see an opportunity for a bounce here off that

63-dollar support level it's trading at with the relative performanc we've seen in the sector if we look at the business itself, it's now trading a about 15 times next year's earning. given the current revenu growth we've seen, that's fairly different significant discount it's the average we've see over the last five years or so that's a significant discount. i think given a fact that th amount of cash that they generate and they're able to return quite of cash in th form of dividends and shar repurchase in, this is a optimal opportunity to get int t.j. x at this level i'm going to use a fairl simple trade structure by goin out to april and by the 65, 72 and a half coal spread here. think about $3.30 for that 6 dollar call. collecting about 65 cents fo that 70 to call. then you're paying about $2.65

for this seven and a hal dollar spread. just a little more than 30% of it a 2 to 1 reward ratio. if we see tjx resume towards the upper bound of this tradin range. >> carter does tjx stand out among the retail papers? >> they today, bounces bea philly on its earnings it collapsed 9%. the recovery is at the primary data point or profit gap on it earnings i would say the recovery i secondary. there are so many battles in the consumer space footlocker - i just don't like the space. >> oh, that's pretty definitive >> mike, how about you >> it's interesting, we've see some pretty good operating results out of a number of retailers. and yet, several of them are not behaving particularly well i think that's a bit troubling

that also speaks a bit to th options structure that tony ha talked about if you went out and some decen purchased the stock, obviously you have the risk of the stock declining percent beautifully. by using a call sprayed, you'r limited that downside risk it's just a fraction of th current stock price. i think that's actually th kind of strategy one wants t use at this time because i still believe that w have trouble ahead not just in the retail, bu generally. >> yes, tony, last word. >> i understand the risk and that's why we're using the options strategy but i do think tjx is a little different than the other retailers. especially as we head into mor uncertainty. this is the type of retailer that tends to do a littl better that's why i'm positioned on this right now >> all right, still to come, claim jumping. we are going to dig deeper int the sector others have -- for all things options action, take check out our website do not forget to tweet us your

questions. we'll be right back. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. 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. it's time for the ultimate sleep number event on the sleep number 360 smart bed. what if i sleep hot? ...or cold? ♪♪♪ no problem, the sleep number 360 smart bed is temperature balancing so you both sleep just right. and it senses your movements and automatically adjusts to keep you both effortlessly comfortable. so, you can really promise better sleep? yes! you'll know exactly how well you slept, night after night. we take care of the science. all you have to do is sleep. don't miss the final days to save 50% on the sleep number 360 limited edition smart bed.

plus, 0% interest for 48 months on all smart beds. ends monday. at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity. it can power hundreds of devices with three times the bandwidth. so your growing wifi needs will be met. supersonic wifi only from us... xfinity.

♪ ♪ ♪ ♪ ♪ >> welcome back to options action broadly looking like a intermediate cap i commodities. the space is comprised of so many individual needs that som will play catch up to the refs mike is taking a look at how t play one then mike, which one >> i'm taking a look at --

as you've just pointed out, we obviously saw a lot of weaknes and commodities generall today. but there was a rare, bright spot and that was copper copper actually closed highe on the day, while many other commodities closed lower the other thing i would quickl point out is that -- not an unreasonable valuation. the streets looking for abou 37%. we see substantial growth in terms of net income, year on year so, i think this is one of those situations where we ca basically take a contraria commodity view because it's a little more idiosyncratic. there's a lot of support a well, because infrastructure things like that going on. so, i don't mind playing it to the upside that said, this is a stock tha has had a fairly good rally of late i'm trying to find an option structure here which will allo me to play for some up side.

realize if there's actuall some fairly expensive options. and try to mitigate my immediate downside exposure in the event that it does pul back after that rally that we've seen while i was looking at in th form of a calendar spread, essentially a diagonal cal spread for this. going out to make an purchasing the 46 calls. i looked at those earlie today. those costs about $3.85. then i was going to sell a narrow dated strangle agains a. specifically, the march 41, 51 strangle so i would be selling th marquee 1:41 points. also selling in march, 5 calls. together, i could collec nearly $1 for those two option put together that mitigates the expense b that longer dated options, quite considerably consider what my exposure is between now and march 18th expiration freeport would have to fal below that 40 $1 foot strike

for me to have stock that's a pretty significan decline. more than 10% than when th truck was stock was trading. on the other side, i have abou 10%, if the stock should rally of course, if march comes an goes i still own might longe dated call and could loo either to sell some additional premiums against a or see if i see profits rule the longer dated option. >> carter, earlier today you publish a note saying ready to launch on this one what do you like about the church >> well, the setup is good the first thing i have here is the comparative chart. what we're looking at is tha ishares commodity etf, the gsg on a one-year basis. it's up 38%. that's the issue for the index copper is up five. so, this has been a real lagging. let's talk about freeport.

three charts in a room that ar identical. the first of three, this is 60 minute bar chart and it goe back about three months. you see that head and shoulders, bottom back in mid january look at the next week to draw the line you could call this -- it doesn't matter what you cal it look at the next way to draw the line it toying with the prospects o breaking out here in the third iteration. so, the question is -- in the final chart, and th longer term jerk - this is the issue. stock closed today at $46.34 it is high on may 10th in that chart of 2021. was $46 ten cents. because 20 cents above where w were in may. and we're about to be in march a year later it has done nothing in a year. that's the potential major breakup. >> all right, we have breaking news on starbucks.

kate rogers? >> melissa, a third starbuck in mesa, arizona, has voted to form a new union with starbuck you workers united the vote was just tallied. it was 25 in favour of unionizing, three against. this vote count was delayed by several days after a starbucks challenge. the company has now another te days to challenge thes results. then the union will move to be certified. this marks the third store tha has now voted to unionize in the last month, out of four so far. we're still awaiting the count of two more stores in th buffalo area as well now, there are many out of their stores awaiting a vote the union says no 103 stores i 26 states have so fa petitioned for a vote. starbucks said it will handl these on a store by store basis, when it comes to contrac negotiations will be of course be a bit mor challenging, to flex collectiv power on the union side. a reminder, workers who did yo nice could move to decertify the union in a few years i they're not happy. melissa, back over to you.

>> hate, quickly, you hear this and you assume that means higher wages higher wage cost for starbucks is that the case should we make that assumption >> starbucks remember ha already been increasing wages. that's something they announce earlier this fall, after the initial meetings began i think that is something that they have already built into their cost model here. as i mentioned, starbucks stor by store negotiations mean this will take a really long time to meet to reach critical mass it is certainly something to watch, because this is definitely spreading quickly many of these workers -- this is quite a landslide fo the union. 25 in favour, three against. kate, >> thank you, mike, what do you make of this news the issue i have with starbuck and kate kind of put it here this is gonna take some time t play out i think really the bigger issu with starbucks is the valuatio relative to come it's trading a couple term

over this is a historically goo performer. they do have historically good margins. i expect those to continue i don't see a whole lot of upside in it right now i think the charts we have her from carter, we'll see the same it has a perform well at all i the midst of this news >> carter, quick take on the starbucks news >> the commodity issue the costs are through the roof starbucks, not so. get >> up, next you have questions from the big trading we so we're gonna answer tweets don't go anywhere. much more options actions righ after this

here's a direct question. how long are you planning on keeping your new smile? yeah. that's why smiledirectclub has their lifetime smile guarantee™. get a doctor-directed smile you love, guaranteed for life. your life. choose smile. choose direct. ♪ smiledirectclub ♪ i'm searching for info 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 ♪ >> welcome back to options action time to -- of you want to know if ones -- looking at fedex with earnings i believe the stock will rise. by the march 25, 240 call. a little less than a chef tony, what do you think o this trade >> yes, this is certainly a bi more on the speculative and. catching awfully night this is one that i like i have some exposure on the fedex my self yesterday. using a vertical spread like

this is a great way to take lower risk approach. >> all right, our next yea asked, i'm looking for a option strategy that i relatively safe for passiv income what strategy do recommend mike >> well, thank you for the academic promotion i jus received here's the thing to generate income using options, you need to sel premium. and if you're going to do that against stocks, covered call is a good strategy don't do that on hig volatility stocks. try to avoid big caps if you can. this is not a strategy for growth's docks more of your steady holdings also manage him carefully. if you see the stop starting t run through your short, just b sure to adjust up and ou before you get fined >> our next year's focus on th near term. -- for the next six weeks carter >> i'm looking at them all the time every six seconds. but anyway, here's the deal.

that's a very specific timer the last six weeks has been doozy. i would make the following odds. six weeks from now, the odds o being up our ten, 15%. the odds of being one shor down, 85 >> really? >> tony, how would you put the odds where will you put the odds? >> right now, i do think tha we put in a bit of a intermediate bottom here o equities specifically, 6 to 8 weeks out i do agree with carter i don't know their aside m camp but i certainly believe -- >> mike, i'm assuming you thin the same >> odds are lower. >> i alluded to that we've seen the geopolitica risks we face. we have to risk with what th fed may do if we get a no no worse place than we have already seen we've got a good bounce here i think people can tak advantage of that. if you fail to reduce some

holdings before hand, you have an opportunity to do so. >> all right, let's quickly ge to this last when our last viewer i revisiting a last rate - spin both calls against thos for a few months then later exited around 53, 50 i'm thinking about getting bac in this in the 50 dollar calls again. mike, what do you? say >> certainly this to placement, i like all option that they present. i like it for that reason. also, you talked about selling some upside costs against th longer dated once you own. that's another form of a buy right or cover it right. what we're talking about i response to the first tweet. so it's going to generate some income i like the strategy. >> all right up next, final call. ♪♪

♪♪ ♪♪ it's time for the ultimate sleep number event on the sleep number 360 smart bed. what if i sleep hot? ...or cold? no problem, the sleep number 360 smart bed is temperature balancing so you both sleep just right. and it senses your movements and automatically adjusts to keep you both effortlessly comfortable. so, you can really promise better sleep? yes! you'll know exactly how well you slept, night after night. we take care of the science. all you have to do is sleep. don't miss the final days to save 50% on the sleep number 360 limited edition smart bed. plus, 0% interest for 48 months on all smart beds. ends monday.

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. ♪♪ >> time now for the final.

carter >> ghg commodity, short. freeport, long >> tony? tjx long call. spread >> mike >> copper, freeport. >> see you back here nex friday - [announcer] the following is a paid commercial program, paid for by ancient nutrition. these statements have not been evaluated by the food and drug administration. this product is not intended to diagnose, treat, cure, or prevent any disease. this content is for informational and educational purposes only. it is not intended to provide medical advice or take the place of medical advice or treatment from a personal physician. - as we age, certain things start to happen to our skin, our hair, and our joints, and even our digestive system. most people are getting zero amount of this incredible and unique substance we're going to discuss today. the body makes less and less of this as we age.