. it's friday. that means it's time for "options action. the markets losing 5% across the board, fourth losing week in five a comeback rally looks like a bear market bounce looking for shelter. we charted an under the radar bond port in the storm and continue our consumer conversation with the top of the hour looking for deals to snatch up now in walmart, uber and las vegas sands. i'm frank holland. joining me carter, mike, and special appearance by scott.

president of nations indexes before we get to tonight's trades, let's triage the markets. carter. >> what we know is that it's always tempting to try to say, hey, the worst is over, but it's usually better to anticipate more trouble and then get increasingly encouraged if it doesn't materialize. it was a bad week. it's been a bad year i don't think it's over. >> mike, over to you carter saying better safe than sorry. >> yeah, i'm incomplained to agree. this was an exceptionally tough week i have to say that the inflation data that we received didn't surprise me, but it doesn't matter if it surprises everybody else then the market reaction was sufficient to surprise me there. a lot of people who were observers of were there expecting maybe better than the whisper number inflation number, apparently i am not sure what was going on there. as holders of adobe, holders of fedex, this was a painful week for us to be sure. fedex is the one this concerns me a little bit more the adobe situation i think is indicative of how the market is going to react to news that they

don't particularly like. they didn't really like the deal that they announced and punished the stock severely fed, the fact that they can't give us or illuminate what the rest of this year looks like is grim and what is also a little bit concerning to me is that it seems like we're hearing that same kind of tenor from across various industries we heard barry stern earlier today. >> he was making comments about the people he is talking to. so overall it didn't feel like a good week and it doesn't feel like it's going to get a whole lot better soon. >> scott >> frank, i think the reaction to the inflation data was absolutely appropriate but i think that the market made the wrong reaction to the fedex data you know, fedex has never been particularly profitable margin wise, it has huge inefficiencies between the ground and express business since the company has started making eps estimates public, in

nine of those ten years, they have gone on to reduce that target, to lower that target at least once and so fedex, congratulations, you're normal. so i just don't think that is the sort of barometer that the broad market should be paying attention to, and i think the market figured this out. the s&p had a tough day today, but the last half of the day was pretty good. yes, we closed 26 points lower, about three quarters of a point, but gained some of that, a lot of it back we actually closed 36 points above the low. so, yeah, i understand why it was a tough week i don't think fedex was the reason to focus on that. >> scott, are you saying wrong reaction or overreaction when you cut your current quarter eps guidance in half, is that really a wrong reaction >> well, it may not be the wrong reaction you make a good point. maybe it's a way overreaction to some disappointing news from a company that's going to have a lot of trouble anyway,

particularly on the plab labor front. labor costs are going to eat them alive the fact that the s&p was down 50 at one point based largely on fedex is an overreaction. >> all right so with all this in mind, where should one turn to for stability? carter worthy, he has the answer >> i have one of the answers there are probably many. let's get to it. so there is the thinking that we can get a handsome yield without too much maturity. so a very simple table, one year, two-year, three year t bills here is the th3.5% we have yet to break out on the ten-year the two-year, next chart, we have broken out. so the question is at this point is it tame to actually take the inverse trade and maybe buy short-term paper shy, the eye shares, final chart, is a good instrument if you want to capture a 3.8

percent yield plus or minus and not go out in too much curation. what we are thinking is -- and we will make it up to the trend line and you want to buy shy >> carter thanks. >> mike, what he is the trade here >> so interesting situation of course because we are getting into territory that we really haven't seen since before the credit crisis. you look at the immediate precredit crisis highs for the short-term rates 5%. if we got to 5%, what would that translate to for shy probably about 80 bucks. so that's really your downside if you buy it here of course, if you are speculating that rates are going to turn rather than buying this for yield, an inexpensive way would be to go out to december i was looking at the 83 strike calls. those things cost about a half a percent of the current share price, about 40 cents if you wanted to make a bullish bet

but i think i would make a different point here as well, which is that sometimes it makes sense to trade options and sometimes it makes sense to just simply buy the underlying shares and if the purpose that you are looking to shy is so you can collect that yield, buying the shares could also make some sense because, of course, options don't provide any yield. in fact, they do the opposite. they will kdecay over time. you are not risking a great deal to buy tows calls. but in general buying shy is another way to sort of take a safe haven trade here. >> scott, what's your take on carter's premise and mike's trade, the safe haven trade, if you will >> carter's premise makes all the sense in the world and doesn't it cast the problem that equity investors have. do you want to be rolling the dice equities in this environment when you can get a safe 4% annual yield in the two-year so that really is the problem

for equity traders mike's trade makes a tremendous amount of sense. we talk about implied volatility the implied volatility for something like this is going to be very low. you can buy that call, that 82 call, and not pay very much money in absolute premium. and then you get the exposure that you want. again, you know, 4% probably makes a whole lot of sense right now. >> all right still to come, unexpected opportunities. each trader will present a different way to play the consumer, yes, even in this economy. and for everything's option action check out our news site newsletter more "options action" right after this

good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®.

yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back. action." despite the headline declines there are opportunities to make some money right now we will present three ways to play the two types of consumers. those that will trade down and those that trade up in terms of their buying power scott, with the special guest appearance, kick us off with walmart. >> i want to be long equities, but i don't want to be a hero. and so i want to focus on low beta names and that is the staples so think of them as the companies that make the stuff you have to buy or that sell the stuff you have to buy, and i want to talk about walmart because the staple sector was the only one in the equities space that was higher today. so walmart is one of the kings of the staples

i love what they have to do. they will do a great job when it comes to maintaining margins i think it's a great company so i want to get long exposure to walmart and the way i did that today, i did this earlier today, in the october expiration i bought the 140 strike call i paid $1.50 for that. you can actually buy it a little bit cheaper later in the day but that's the october expiration you can see as with any time we buy an option our mask risk is what we bay, pay, $1.50. the goal is for walmart to get back to the bottom of the gap from may when they reported disappointing earnings i think their going to do that last quarter they had really nice earnings. again they make the stuff that you have to buy. if there is a problem with walmart options it's the implied volatility is low. so there is not a lot of meat on the bone if you want to do something like a spread. but as mike said, sometimes all you have to do is buy a call

i love the fact that i am going to get long exposure to the equity space in the staples. >> all right retail to rideshare, the chart master is hitting uber to see if this mname is go to make a u-turn. >> let's figure that out kinda looks like a u-turn, right? we have a beautiful done trend and the stock has failed to the penny, to the penny, to the penny. that's why trends matter then it gapped up on the earnings above trend. how can we draw the lines? one way would be as follows. it's a well defined call it whatever you want to call it, a reversal formation, cup and handle another way to draw the lines. call it whatever you want to call it. it has all the elements of a bottoming out formation. uber on the long side. buy it. >> thanks, carter. mike, what's the trade on uber >> yeah, you know, scott made an interesting point when he was talking about walmart, which is that's it's a low volatility

stock as a steel plant, low beta, the options premium is not that high. the opposite is the case for uber when we look at the charts that carter was illustrating, we do have that bottoming formation which gives us sort of a place to draw a line in the sand so i was looking at a trade i like to use in the higher implied volatility situations where we do start seeing a move off the bottom where we are thinking about the possibility that we might have purchased the stock at the bottom by using a call spread risk reversal. i am looking at the 25, 32 and a half, 30 risk reversal that expires in november generally speaking, i'm looking to put them on something close to even, trying to get some near upside participation but not to have that immediate downside exposure essentially. so here you would get long down with that 25 put strike and long at the 32.5 call strike and have

exposure all the way up to the short 40 strike call in this case we are laying out a police little bit of premium, a buck 30 or so, but that actually represents a relatively small percentage just over 3% of the current stock price. bear in mind that decay that you will be paying is what you would experience if you carrie this trade all the way to expiration. in between it will behave like the stock would. you can see on this chart here where your real exposure lies. more upside for a move of 10% to downside risk for comparable move. >> mike just laid out his uber trade. what's your take >> let's keep that chart out i think this 25 level is really important. that's where the stock wall owed between july and august. i would not expect it to be lower than that right now. fundamentally, it's going to take advantage of the fact that gasoline prices are down 13 weeks in a row also the fact that more of the

company's business is coming from delivery rather than rideshare. we now see that about 43% of the company's revenue comes from delivery and that's growing. so the company is not cheap by any means. so i think it makes a lot of sense that mike is using options because i wouldn't want to run out and buy a stock like this, which is trading at 80 ape when i could create a strategy like mike has. >> carter, you see more play in the gaming sector? >> yeah. also an opportunity and completely different here is the chart with no judgments, no lines, no arrows let's put lines and arrows and judgments on it. next chart bottoming out formations they look the same because charting is old-fashioned. and i think you can put a big green arrow on here. the next iteration same chart, same timeframe, there is this one. it has all the elements bottoming out formation. now one more way to draw the

lines. converging trend lines either way, i think the big green arrow is what it deserves. here's the other thing it was up this week. check this out final chart. this is a relative strength chart. so we know that this is just a ratio. it's been an underperformer from the s&p. guess what's happened since? it's bottoming out all the elements of a bearish to bullish reversal big strong week. great consumer name. lvs. >> all right mike, how do we roll the dice on this one >> you know, it's funny they call themselves las vegas sands because they don't really have much exposure to las vegas since they sold the venetian in february this company is really a marina bay and macao-based company. macao in particular, everybody knows you have a lot of restrictions and that hurt their business i would like to just offer the

following. number one, they have a good amount of cash right now available because they had some periods of negative cash flow, but they have over 6 billion bucks, net/debt around 9 billion. the company right now, round numbers, actually slower, enterprise value 40 billion versus an all-time peak of 60. this was a company that was able to generate north of $3.7 billion annually in free cash flow at its peak. if you are making a bullish bet here, what you are planning on is that we're going to start seeing people return to the tables you can't really look to the last couple of years to represent how you think this company is going to do going forward. when we take a look at it in that sense, i think that there is, believe it or not, over the course of the next couple years as much as 50% potential upside. in this market environment it's hard to look a couple years out. we are really looking at a couple days, weeks or months out. this is a company where the situation is not unlike the one in uber. because the stock has fallen so

far and because it is reasonably volatile, we are seeing significantly higher elevated options premiums so i'm looking for a trade that is similar to the one i was using in uber. going out to november. once again, looking for a call spread risk reversal in this case, actually able to get it close to even which was the target that i had previously discussed. paying only 11 cents to buy the november 40 strike calls and sell the 34 strike puts and the 46 strike calls against it give this some thought if you will imagine that it just under 39 bucks the stock would have to fall $5 for you even to begin to consider where you are getting long so that means you could have a more than 10% decline and you have none of that exposure to the downside con trarly, if it went up by a like amount, you collect 8.5% in terms of profits versus the current stock price. so that's really the way to think about these things up 10%, how do i make debt

versus down 10%? i think in a market like this it's very easy to expect we will see those kinds of moves that's the kind of market we are in set up trades that give you more upside in those types of moves than downside. >> scott, what's your take on mike's trade he is saying similar trade for two very different businesses. >> yes, and it shows the power of this structure. mike and i talked many times about how this could be a wonderful structure. i am not certain that las vegas sands is really a worthy subject though and i just look at it like this. if i owned uber down 10% i would be happy because i like the business if i owned vegas sands down 10%, i would be worried about more yo lockdowns in china and the business in general. and so if you would be happy owning las vegas sands down 10% or lower, then this is a great

strategy but it's also a strategy, if you don't want to have anything to do with the business, then maybe there is happier hunting someplace else >> all right up next, we are taking twitter -- taking to twitter, excuse me, and answering your pressing questions aconopon much more "tis ti" after this we are back in two minutes stay with us

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barons but it's a measure of employed volatility now, the two go hand in hand when there is alot of bearishness, fear, often a lot of implied volatility, that is, implied volatility is really high, but that's what the vix is trying to measure, implied volatility it's a volatility index, hence the name and there is a correct level for the vix. we just have to do a little bit of math. it closed today at 2630. if we do a little bit of math we know that that implies a daily move for the next month of 1.6% close to close each day. today we had a move, big move, but ended up being less than half of that level so you can say that at 2630 it's too low, but i think it's actually at about the level it should be. >> mike, you agree >> it doesn't feel all that low to me. and actually as i look at options premium going out in time, it also doesn't feel low i would like everybody to think

about this if you consider that you think that the equity markets might return on any given year, say 10, 12%, 20% returns over the course of a year either higher or lower would be pretty outsized that actually is what the options market is currently implying if we look out about a year we are seeing that that straddles price at about 20% of the underlying for the s&p so it is maybe not the eye-watering numbers we saw in the depths of the credit crisis or the pandemic when we saw vix numbers to the high side of 60, 70, chose to 80 at one point those are crash situations we're really talking about how the market is going to behave day to day over the next 30 days well over 1% moves daily, that's pretty big, pretty volatility. >> next tweet. this says amazon $125 a call for march 23rd it appears attractive. what do you think? carter, take this one.

>> that's 12% of the value of the stock. i think you have time, six months i actually like amazon it filled today by dropping the upside gap from the earnings from july 27th i think you have got something here. >> scott >> let's remember that over time options will end up costing more than they are worth. we can take advantage of that in a couple of different ways if you like amazon, then maybe you just go and buy the stock. since the split, it's a much more reasonably priced name. you can buy 100 shares and not break the bank if i were going to do something bullish, i would probably do a spread. ll coming up next, the final st wh ayitus

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>> scott >> the staple sector is a sector to be in i like walmart. >> mike? >> call spread risk reversals and high volatility names like lvs and uber. >> "mad money" with cramer starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm just trying to make you a little money my job is not just to educate but entertain and teach so-call me at 800-743-cnbc or tweet me @jimcramer. sometimes it comes down to economics 101. tell m