out how to steal and how to collect as much money for him and his friends and his family as he could. he just crushed the city that he says he loves, and he ruined his life in the process. -- captions by vitac -- apples decks big deal. what's next for the tech giant? >> and the professor with what you should do with this trait. we are helping you make

more. this is actions live from nasdaq. we have carter on the desk. thank you for joining us. let's begin with a friday selloff and another down week. the s&p falling 4 of 5 days. the financials hit harder. shares of the bank index down four%. now we can lay out where one hearted name is headed from here. look at capital one. this is a follow-up from last week one week chilled down on the market. the big news this week is that both two-year-year-old and 10 year yield showing a lot of life but faltered at the end of the week.

lower yields. it's not good for financials and principal. we have seen this in reports, more divisions are ticking up as the operators of this get ready for the quality deteriorating in loans they have. look at capital one, not a high- quality lender. just a few simple charts. we notice this was a huge winner , $38 on the low and hit 178. now down some 42%. it's exactly at 50%. does that mean it holds? >> i don't think so. the second chart is the same timeframe shows the importance. they are both at the level of pre-covid selloff as well as the highs of 2017. so there is a reason it is not

going down. it is finding support. it's not likely to hold. let's drown more. the next chart is just a chart of capital one itself and unrelenting in the downtrend. it looks like it will break and make new lows. this is a relative strength. it's relative to the xl s and the financial sector. we know capital one is going to be going down more than its peers for this dexter in which it resides. not good for sellers. >> okay. thank you. >> what is the trade here? >> is interesting. when we have cyclical stocks, they look cheapest at market tops and most expensive and market bottoms. that is because of the economic

cycle we have to deal with. right now if you looked at it on a forward epf, it looks cheap. the street is looking for about $20. lower next year, about $18. that is less than six times earnings. one thing interest is loan loss provision. we saw an uptick of about 680 million it's a $400 million increase in loan loss. that's putting four%. i flip that around and think of it this way, if you have, as we do a weakening economy, what is the impairment you should look at for that $400 balance sheet? >> that ultimately means that $400 million in those provisions is fairly modest and real credit headwinds could see more loan loss provisions going

forward. this is a company who relied on intensive marketing. my take on this, given the fact that the stock has declined and option premiums are elevated is to look for a quick spread i'm looking at november and the spread earlier today. that was going to cost about $2.50. that is a risk reward relationship of 3 to 1. that's 2 1/2% of the current stock price if it fails to hold this area of support. one thing to remember is that you will always see companies looking very cheap in situations like this. it's going to be a revision in the financials that will bring truth to the price. >> okay. i know you're worried about pain to come and heating what

the fed was telling us and if capital one is seeing pain there may be more crack and credit could be more strained and you tell me your guess on capital one. >> okay. i happen to be on the same page. i am willing to let you know. there are couple things here. carter pointed out the relative strain and that performance tells you quite a bit. you look at the performance year to date and it is double what was selected. you mentioned pain. he alluded to value. that is exactly what capital one is here. you really need to think about where we are in terms of the credit cycle. we are expecting there to be turbulence going forward. you think about what capital one is and it is one of the

first to show cracks. a bear trade setting up gives you the best opportunity that if there is going to be credit erosion you have a name that is likely to see or have the first mover in terms of the credit correction. >> and the supermarket staff with grocery names. what are you doing with kroger? >> so kroger is the opposite circumstance as a financial like capital one which is lower on the demographic scale in terms of credit worthiness. it's a consumer staple. as a low data stock. it is relatively cheap trading over four years give or take. the company has been executing well. they have seen increases in cuts and a gross margin of 21%.

we've seen this over the last 10 years. great reasonable. they are really executing quite effectively and on digital. we have earnings coming up. this is a gnome we actually own. we do have earnings coming up next week and the potential catalyst for the upside. when i was looking to do was a call for this. i was looking at january. i was going to buy the call and it would cost less than four dollars. i was going to sell a mirror dated strangled against it. this lays out at about $2.85. the idea is to capture the premium you will see going into a catalyst like this one and it is a low stock so the downside risk of putting the stock at $45 is a reasonable one to take on given the fact that the

stock as experience some weakness. we were recently adding on this one. okay. so moving from the financial name to a consumer staple name. what do the technicals look like? >> mike max this point. kroger is low. consider this they have the same sales as home depot yet it's a market cap is 1/10. it's a low margin business. they sell sugar, rice and salt. let's look at the charts. kroger has based the s&p. here is a chart, the definition uptrend and the selloff. you can see, look at the second chart over five years. it is still a perfect uptrend. look at the all data chart, it

is perfect. this is kept up with the s&p. it started on the lower databases and in the steady way. i think it is the opposite of regional banks. >> is an interesting name. >> let's go to energy. the oil and gas has a nice start over the last couple of months. high energy gains. what would you do now? >> well, you don't always get a chance or have the opportunity to determine why you have this. where you position yourself and trigger points in terms of where you want to start to get this name. that is why i have chosen this.

let's get into the trade. looking at the sop november 145 170 call spread. i also have the twist to finance this with the downsized short put. you by this note 411:50 and send it for four dollars. you risk 750 to make 25. you are profitable above that 152 1/2 mark or more. we have this down market and a situation where this is in areas where analysts are constructed. we have political headlines. commodity prices come out of ukraine and russia. this is an area where you can try to buy rather than jumping into deep you can do this. you can go ahead and sell that

down then that makes it even cheaper. >> what is your take on this trade? >> i have the comfortable selling this. iona right now. the other line, it would be a risk you would face if you sold that at a lower price than where it is trading. if i own it that's like saying i would buy it here. so being willing to buy it at a lower price is different. got it. >> still to come, gearing up for a big launch from apple. the first in person event from before the pandemic. what to expect from that. and check our website and newsletter. more options actions is coming up right after this. >>

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. ♪♪

back to options actions. the biggest day in tech is coming up. the iphone 14 comes out wednesday at a first in person event since before covid.

how should you play this? you are all here. an upgrade for our portfolio. >> this is an important company to the broader economy and the market. >> yes. it's interesting because look at the company from an operating standpoint. in many ways it is the ideal company to be involved in in the current environment which is the low duration equity for companies that generate a lot of income and cash flow opposed to growth companies that could have negative earnings and is a prospect of the future. the problem is that at 25 times full year earnings for next year, i hundred billion and 2 1/2 billion in market cap, it is not cheap.

we find ourselves in trouble. it's not going to grow at the same pace as it has historically. that was the attractiveness that we saw in microsoft an awful. it was on a basic premise that the company was so big it could not grow further. that part still remains true. it's not a discount of the market anymore. the cash flow story supports it but the multiples are a bit of a resistance on the upside. >> what are your thoughts, through the chart lens? >> yes. that is lens i have so the issue is that sometimes, there is no other way to say it. at an inflection point. it was a stretch. it has sold off and suppressing it seems that the short is overstaying. this doesn't quite seem like a technique i want to pursue.

rather be short and long. how about you? what is your take? >> well we have alluded to a quite a bit in the past. apple tends to have a cash balance. that is a margin of safety. i understand blind equality in turbulent times. you have not really seen the pullback in his name like you have a lot of others. a lot of other bank funds have not had the same down type movement from other name is that have high cash flow. here, again, i'm not here to trade for the sake of trading but i find it hard to be long at this current evaluation. >> yes. coming up, we are stretching into one of my regional calls. an update. the cnbc special

coming up. more option actions is still to come right after this break. >>

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welcome back. last week ahead of earnings. >> having a more resilient customer base and more insensitive to economic pressures that we might be facing. the big company has a lot of meaningful growth opportunities. i was looking at a one by two foot spread. i was looking at september, the 310 260 buying two of the puts. >> trending lower before big jump on the back. what are we doing now? >> we own this going into earnings and i indicated we still hold it. it has been quite a roller coaster. the stock is unchanged.

we have something we talked about, the company is trading at a reasonable growth. it grew 30% on the top line and 33% on the bottom line year- over-year and i think that demonstrating that you can execute. with respect to the pointspread as a hedge like you are buying one and selling one and hanging on to that for now. i think it is still representing a decent edge to the downsize. >> okay. then you have a take on how you would play this. >> yes. it is what you do, you've had a name that has had a move. you want exposure because you believe that the consumer it services is higher in and it has the ability to pass on inflation. i want to minimize this. is october, 275. if i sell that and by the call for cash layout

of 3.25. you don't start up a dissipate until 110% and you are on the downside if you buy down at a discount and you made the cash outlay. that's how i play names that have already had a significant move. i believe in the name but i don't want to feel like i'm chasing the move late to the party. >> yes. you look at these charts and what does it tell you? >> it's a roller coaster. this is a stock that was down almost 5%. still, it is burned. it has that supply. my hunch would be to take advantage of this reprieve and just exit. okay. exit. up almost 7%.

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welcome back. is time to take some tweets. so i own the tesla 273261. if tesla drops below 273 after hours and my at risk of assignment? what you think about this one? >> an excellent question. the cert version is yes. that is because there is a narrow window of time after the markets close when option traders can file something called a contrary exercise advice. so on extra ration it drops below the short strike, that is possible. only sophisticated traders will do that.

it's an important consideration. >> thank you. >> our next tweet says i think the chips fell off. that's a little overdone. what do you think of us september 30 call spread? i picked some up today for $6.35. what are your thoughts? >> you have the right level. i don't like the stock. i think the gap down from two days ago. are semis in the position to bounce? >> i would just not be long or involved in that. okay. so what would you buy the natural gas fund and sell calls against the? >> guest. short dated an upside. too much turbulence to get called out of a position. >> okay. now the final call. curtis take a soft. >> cell capital one by kroger. >> and the same thing.

get kroger into earnings. >> we covered a lot of ground. that doesn't for options action. we will be back next friday. don't go anywhere. a special back to business starts right now. >> (male narrator) up next, how would you like to get the celebrity secret for ageless skin? (female narrator) find out how in this paid presentation for meaningful beauty. (male narrator) as cindy crawford unveils her newest youth activating breakthrough. (female narrator) plus, you'll get exclusive access to a brand-new free gift offer featuring cindy's new home spa tool: the electronic skin revitalizer! a $90 value, free! (male narrator) and coming up, find out what happens when cindy crawford invites grey's anatomy star ellen pompeo to try the evolutionary secret