>> in the core of nevin shapiro, he's someone that looks out for himself. and at the end of the day, if things aren't going his way, it's, "screw everything. i don't care. it's about me." you know? and that's not the nevin that you know? and that's not the nevin that i thought i knew. . tonight on "options action," the countdown is on for a week of earnings. the list goes on and on. which are the names to play ahead of the results in plus a call to action on boeing the airline giant up to close to is 16% and we'll look at united airlines has the trade been friendly. let's get right to it. a huge slate of earnings next week and we are honing in on

alphabet, microsoft, amazon and many more results. so the chart masters kicking it off. carter >> that's right, big week. i'm sorry, the russell 3,000 175 in the s&p reporting earnings next week, but most importantly, we've heard from one of the top five, but the other four largest stocks in the market report, and actually, statistically, when they've all reported in the same week, it's not been a technically good week in the instances that it's happened what do we know about the top five they're waiting in the qqq is almost 50% you y youy see the names there the top five waiting in the s&p, less, 22%. and we've heard from tesla, of course, the market reacted well to tesla's news. now the question is, are we going to get the seam kame kind

thing out of the others? here's a five-year chart its peak to trough is down 34%, epic head and how oldshoulders. and it's bounced we're getting close to the 150-moving 150-moving day average let's drill down to amazon here's a comparative chart amazon up 950%, almost triple that of the qqq. but let's flip it around what about over the last two years? over the last two years, it's a disaster for amazon. amazon's down 21%, versus the qs up 13. the risk for amazon is that somehow it doesn't do well in its earnings let's look at one final chart, amazon so you've got a lot of overhead supply immediately above, and you do have a gap to fill. i'm actually thinking that we're going to get a non-event

it moves a lot during earnings, but maybe this is a push this time and amazon is right where it belongs fwlc >> so mike, you're with carter here >> two periods ago we got a really big pop and then a big drop and the stock is down just under 27%, underperforming the nasdaq as he points out now of course there is good news for amazon we've got aws growing at a great rate it has very nice margins 35% plus, a lot of people are looking forasmuch as 40% margins. the $1 trillion gross market value that everybody's looking at for 2025, i think that is very much still in sight the important thing i would point out that creates headwinds is that their sales pmargins wee

actually quite miserable the and the other thing is that they've pushed their prime day into the third quarter that happened a week ago or so so that's not going to show up in second quarter earnings the it probably makes sense when we consider how big the moves were the last two quarters, but i kind of wanted to take advantage of the elevated premium, thinking that the stock has already been so depressed that we probably are go ning to get a more muted move. i was looking specifically at trading a 125 put calendar now i would point out when i was looking at this earlier today, around 10:00 this morning, the stock was trading around 125 or slightly higher. the market sold off during the day, amazon sold off even more, down 2% ultimately from those levels so actually i think the 120

might be the strike if we open on monday close to today but the idea here is essentially to try to capture the elevated decay that is near dated options will have and limit the risk in case we do get another outsized move >> tony, what's your take on this trade >> yeah, so i agree with the overall pieces that mike and carter have, that this is a bit of a non-event we know that prime day is pushing to the third quarter, but consumer data out of that prime day shows us that consumers are quite strong the e-commerce business i think will report fairly well. what's likely to provide headwinds here is fx this is something i think could be a little bit of a down ideside here but if you look at the price of the stock, when it broke below that 145 level, it quickly got down to that 105 level it's been range bound between 105, 125 or so

and the relative strength that carter was referring to over the last couple years, very poor so from my perspective i agree this is likely going to be a nonevent and i specifically like the put calendar strategy that mike is putting together here. i do think for me the strike prices, i would like to go a little bit further lower, have a slightly bear oish tilt to this calendar, looking at that 115 strike gives you a calendar spread that straddles that 105-125 trading range. as long as it ends up somewhere in that range, this calendar spread will be profitable. so i like the trade, i like the thesis slightly more bearish than mike and carter >> mike, i'm just curious what you think of the more bearish strike >> as i was suggesting when i pointed this out, when we first identified the 125 strike, that's approximately where the stock was trading. i think the 115s would be fine,

too. if you're choosing strikes choose one to the upside, not the down side. >> tony laid out a way to play the name for balance and he sees these granny smith gains could be coning to an end. h >> i think it's time to fade the strength going into earnings next week. we look at a chart of apple. we see the slow and steady uptrend. but what we have seen recently is a breakdown of the strtrend. the risk-reward favors to the down side going to the earnings event. if you look at it moanother way, can you draw a head and shoulders formation. now if you roolook at the busins

apple right now is a relatively slow-growing business. if you look at eps and revenue growth, we're looking at single digits over the next couple years. and i think the stock trading at nearly 24 times next year's earn being earnings is a pretty rich multiple you might see multiple contraction if we start to see guidance a little bit unfavorable for the rest of the year and the market has shrugged off the news we had last week where they were finding in many of the tech firms, planning on showing down hiring. that, i don't think is reflected in the stock price yet apple is yes apple implying about a 5% move so options, premiums are elevated so i'm going to favor selling premium, and i'm going out to the august 26 expiration and looking at selling 155 call option, which is the at the money call and buying a 165 call

against it here i'm going to collect about $4.07 today, more than 40% of the vertical width and this is a strategy that will be profitable if apple moves lower on earnings or stays where it is. i think there's limited upside on earnings. >> what does apple's chart look like >> you saw great lines there you have two well-defined circumstances. and tony drew them you call it a head and shoulders top, and that's what it is this has a big correlation with that agora gregate. and then we see a stock that breaks trend as a good rule of thumb, if you throwback to the level from which you broke, it's defined as a rally level, right to the kill zone, and i would go after it. >> you got carter's blessing on the chart reading. what's your take on the trade.

>> i agree with it first of all, we haven't seen earnings estimates come in much. we are in a slowing economy, we might be facing a recession, but still the street is looking for 7% year on year eps growth, i don't think that's realistic we're going to the event and we have the technical setup. you want to sell elevated opt options premiums when you can and fade the side when there's resistance and the two people who are better informed to tell us about the charts just made the case. but i also think the street hasn't come to the fact that we are facing an economic slow down and that's going to affect everyone, including the biggest companies. professor khouw is laying out a call to action and check out our website and newsletter much more objectio"options actit after this

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welcome back to "options action." look at boeing sharing pulling back as stocks were up 7% on on

pace for the best since march of last year. it might not be all clear skies for boeing, and if you think the to stock is about to lose altitude, are you in luck. from >> this is a stock that's faced head winds the situation with the 737 max and issues with the 787 dreamliners, and those deliveries got suspended we're probably going to be seeing a lot of data that suggests that their deliveries have strengthened. this is really kind of a mixed bag, this situation that we have here because we have that improvement, of course, in the planes that were essentially sitting unpainted on all of those lots, but we also recognize that 737 maxes still are not flying in china. i think we probably haven't heard yet but will, that they are also pacing some potential inflationary pressure, and that

could hurt some margins. one final thing i'll say about this company, i do like the defense sector generally interestingly for boeing, which was more than 70% commercial as they've sort of lost their lead in that area, in a way, the company becomes more defensive automatically. because there's a commercial portion of their revenues declines, defense is now a ha larger portion of their revenues t as it tapstands we have elevated options premiums going into earnings as we typically do. we were expecting the sotock to go sideways. i'm leaning a bit more bearish in the case of boeing and looking to a put diagonal using august and october as my expirations, but hin this case i was looking at the 160-150 put

diagonal just like amazon, pay attention to where the stock is going to open monday. and using a lower strike put on the short side for august, the idea being that we're going to try to capture some of that elevated decay this would have a stand still rate of return we would expect to make a little bit of money just on the accelerated decay. but i think that the move that weave h we've seen, that 7% pop might be a little optimistic. >> so carter, the charts >> no drawings, no lines, no annotations. let's put some lines in. the second iteration boeing plunged right through the bottom 45%. s&p has rallied ten. it's just overdone another way to consider it is relative performance

look at this, hit's to the penn to the declining 150 day average. boeing's all data chart. we're threatening hovering ominously going all the way back to the '80s. and finally, boeing's relative performance was such a great winner and has fallen on hard times. the stock has just rallied 45%. fade the rally >> wow, that's quite a stat. tony, where do you stand on bo boeing >> i definitely think we are in the early innings in a sentiment shift. but they've notched 183 orders versus 12 for airbus when you look at the fact that 80% of their entire backlog is

in a single plane and there's a ton of risk there tin that narrw body segment when you couple that with the chart, very similar to the apple chart, the risk-reward ray hoe favors to the down side. he's using an in-the-money, 160 put. and that in the money put will al h allow you to buy optionality an and he's selling that 150 put option and in this particular case, he's only risking 5% of the stock value to get that down side exposure and paying less than the $10 width of that die

ago agonal spread. and you won't see any losses to the down side. >> up next, a couple look backs on a few past trades plus we're taking some of your most pressing questions. a call to the tweets when "options action" returns '6

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aren't just made for traders -they're made by them. thinkorswim® by td ameritrade welcome pack to back to optionings action. >> this is one of the airlines at that have held up the best and recently broken out relative to the etf this is where i think not a lot of investors are roolooking here especially if you look at expansion into international travel, i think united airlines is one to pick for a breakout here buying the 38-47 call spread for about $2.87. about 7% of the stock's value. f >> after that, united stataw a c

gain but has releasedity its landing gear >> if you lose or than 50% on a debit spread it's time to get out. and at that's exactly what has happened here. >> we're also looking pack at one of mike's trade thes >> at the current valuation, ford trading at $470,000 of enterprise value per electric vehicle sold at that's just for interest hikt vehicle business compare that to 780,000 in enterprise value for tesla to peme, i think this one seems pretty cheap i was looking at the jan calls those would cost about $2.40

>> what are you doing now? >> i happen to own the sotock i will say one of the things can you do because we are in a difficult market involvement, consider selling some fnear-datd premium against it could you sell down side puts, for example, could you have the stock put to you, but i like the level here, or you could sell out of the money call options. that will offset the decay but allow to you holid onto this position a little longer >> now it as time to take tweets how long would you think the pop would last from i think the pop is probably over it rift an unfilled gap below, and i suspect that gap is going to be filled

f >> my next fan asks, generac >> i really like jen rack as well this is a fast-growing company trading at less than 19 times forward earning. but they are fairly optimistic i had colleagues taking advantage of some recent offerings over at costco and actually picked up one of tease things recently. the thing i would say, the stock has had a good run i would suggest using call spreads or die agonals while premiums are elevated. >> an answer and a shopping tip from pike. >> options play with it being down 9% from last friday and the revised guidance of numbers on

the earnings call. tony, why don't you take that one u. >> the rule of thumb similar to united airlines. it's down about 50%, so you still have about $3 left in this particular case because the cat list is over, take the losses up knifebs, the final call flowers are fighters. that's why the alzheimer's association walk to end alzheimer's is full of them. because flowers find a way to break through.

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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. time for the final call, carter braxton worth. from perhaps it's making a turn, but it's already advanced 45% in a matter of weeks. and then your wrong fuse, bite some calls >> tony zhang. >> we've seen an incredible amount of strength in apple over the past month, but unfortunatery, i think at that's coming to an end going into earnings

looking to sell an august weekly call spread for next week. >> mike khouw in from i don't think amazon's going to be amounting to much. so i like put calendars. >> that does it for us "politics and profit" starts right now. >> this is a paid advertisement for csn. >> you know, the one thing you can count on in numismatics, which is the hobby of collecting coins, is that the pace of change, or change, is glacial. [ chuckling ] okay? we would hope from the -- oftentimes, as numismatists in a hobby and in a profession, we hope for a snail's pace from the united states mint. nothing is done quickly. nothing is done without