narrator: a sign on the street now reads "helen & louis ford square." ♪♪ -- captions by vitac -- right now on o.a., the notable moves in the options market in this final week of 202, from a ride sharing giant to an ev infrastructure play to the leverage in the housing market plus, pick the time frame. one year, three year, five year, we'll break down a dow component that's been a dog for some time. can this pharmacy giant flip the script in 2023 and later one of our traders with a bullish way to bet on the banks before the banks kick off earnings season. i'm melissa lee.

on the desk tonight, mike khouw, brian sutland and special guest, guy adami. action this week, amazon, southwest, t-mobile, lyft, and charge point as for etfs medical innovation seem big trades here shares down nearly 75% this year mike, what has the action been here today >> yeah, we saw the stock hit its lows for the year on wednesday, and then it bounced really hard and we saw a lot of bullish activity going on in lyft we saw a purchase of 50,000 of the january 11 call spreads, making a bullish bet risking 50 cents or so on a bet this thing could get up to 12 f12.5 by january expiration, which is

three weeks from today what's going on here -- this is an interesting case, because 2023 is going to be a really important year for lyft. it's going to be the first year where the company is going to see positive earnings and positive free cash flow. at least that's what the street expects. if it does, we're looking at a company trading forward if it gets to that income. >> brian >> lyft earnings are february 8th. i'd be playing february options. the the stock is going to move higher -- seems bullish to me the way it's structured. remember to be last three quarters it's moved over 16% in either direction after earnings, so huge moves, and that's why calls make more sense for that kind of volatility played to the upside if you're going to trade it to the upside. >> guy, are you optimistic about lyft >> i am, actually. you can make a case for lyft on valuations as mike just said they're trading basically at one time revenue it's been beaten up all year, and '23 could be a year where they surprise people you're finally seeing, i think, some positive momentum out of management i think they figured it out. if they can get just a little bit of tail winds, this is a

stock that i think it could surprise you early next year. >> let's get to charge point this is one of the biggest moves in today's session after an s.e.c. filing revealed qgrg investment partners bought more than 1.4 million shares of the ev charge tech maker mike >> options trade was actually even bigger because there was a purchase of 46,500 that represents 4 hadn't 6 million shares of the stock. this also bouncing off its low interesting because that houston company founded to make structures in oil and gas. they're obviously pivoting to a more forward thinking green energy play here >> guy >> cto resigned recently i don't think that's necessarily a good thing there haven't been a lot of positive catalysts in an environment where there pretty much should have been.

so i see mike talking about the call, people buying it at 10 bucks tom me it's wishful thinking. >> let's get to a couple of etfs with big options tied to corporate debt both impacted as corporate bankruptcy rates have been on the rise mike, what did you see >> jan 87 put. lqd was the one that saw the much bigger trade. to put things in perspective, that would hit levels basically not seen since the credit crisis, so some big bearish bet there is lqd just as a reminder does have some duration to it. >> brian >> yes, duration point lqd, about nine years its duration. but it's weird, the top ten holdings there's some names out there, at&t, boeing out there 30 years. so it's kind of a weird play i think this options play is more of a protective put spread,

so to speak in case rates goes to 4.25% someone is putting the put spread on to protect the downside of the bond movement in that scenario. to me that makes sense, because this kind of etf isn't my favorite to play mixed income. >> rates going 4.25% don't seem too far off, guy, at this point. >> no, and i know you have a memory like an elephant, and if you recall on cnbc's "fast money" 5:00 each weekday, we talk about jeep being the most important in the market, so these things certainly mirror that, and i think lower in all three of them, when you include hyg -- also submit that whatever behind brian's left shoulder the art work, is fantastic looks like a large squid or something. >> it does jelly fish maybe >> brian, what is that >> well, when you're in south florida, little vacation right before the new year's, celebrate, get warm weather out of chicago i don't know it's something artsy to

represent the area i guess. >> makes more sense if you're in florida. i thought you were in the chicago area, and that made no sense whatsoever. >> no. >> let's get to china. we're seeing the end of covid zero and a midge re-opening. today vladimir putin inviting chinese president xi jinping to make a state visit early next year ishare has been a big winner, up 30%. mike, what did you see >> a buyer of the 30,000 is what we saw betting can continue sbooer going to see this thing up another 10% to 15% by february expiration >> brian >> yeah, we have been seeing these call spreads trade quite frequently any time there's a pullback in fxi seems like somebody buys the call spreads so it's interesting they play this some resistance around the 33, 34 level, so it makes sense it's a call spread and you're capping your upside. maybe this is just a cheap way

to play the upside if that momentum continues that way. >> all right, well, as much as we appreciate guy adami gracing us with his presence, we all miss carter braxton worth. he says he is indeed sorry he couldn't make it tonight he was one of the many caught in this week's storm travel mess. he does send wishes. happy new year, team see you next week on set here's to a prosperous 2023. he also sent a postcard trade from the road, highlighting gold bullion when it was all but proclaimed dead as a hedge by crypto crowd and others. just the last half hour, you did say gold, guy. >> i'm sorry he got caught up in the mall strom of u.s. travel. buying the physical metal and couple that with central banks, pushing alarm buttons in terms of currency and bond markets i think that leads to gold, and i think gold put in a double bottom

so i'm with cbw with cold in the new year i'd stay with it on the long side. >> still to come, believe it or not. we have a handful of significant earnings reports after the next week after the break, mike is outlining options strategies for everything for everything "options action" check out our website and news liter. much more after this

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with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade. where smart investors get smarter℠. welcome back to "options action." we are taking a first look ahead to some big earnings reports to kick off the year. first up, walgreens. the pharmacy retail alliance just closed out its second worst year ever, but professor khouw says a new year and thursday's earnings report could bring an opportunity for profit in this beaten down name mike, what are you looking at here >> we're looking at one of the dogs of the dow. walgreens is a constituent of the dow. underperformed this year, but they do have earnings coming up, and one of the reasons it might be worth looking at, this is a company that did a good job as successfully managing it way through the pandemic it is as a fairly cheap

valuation here as well, trading in the low double digits in terms of price to earnings part of reason is there is a bit of overhang in the form of liability some people expect, some of these companie to be exposed to thanks to the opioid crisis. 4% move is in line with its historical average move. i think the way to play this on a low risk basis is take a look at a calendar call spread. i was looking at the january, april call spread to purchasehe0 strike calls and sell the january 40s against it the reason is those options premiums are slightly elevated, and this isn't one of the names that moves a lot i'm not expecting a sharp move to the upside, because they're not releasing any information about that liability overhang.

>> brian, you like this trade? >> yeah, i do actually and it's even an interesting trade if you want to sort of lay into that spread that mike talked about where you buy the back month april call to play to the upside if you see the stock drift higher you go ahead and sell that january upside call after the earnings play. that option goes out worthless i think there's resistance in the stock on the upside. can it blow through 45 probably not likely. that's why mike is probably selling the jan call against the april to finance that april call walgreens is a stock that's been in our top four. we shied away from it all year, because we're removing ourselves from consumer discretionary, but maybe if the market continues to rally, maybe this is a stock that moves with it and earnings does well and moves to the upside. >> guy, your thoughts on the stock? >> upgraded a month ago, $54

price target they cited this things they just talked about that coupled with the wild card that i think the market doesn't really -- i think they underestimate the genius of roz brewer, the ceo who came from starbucks. i think she's brilliant. i think if anybody can turn this thing around it's her. the stock has been awful, but i think 2023 could be a year where wba surprises people to the upside >> mike, last word on this. >> this is one of those things typically you want to play these sorts of dogs of the dow strategies when you have these down kinds of years. if we were on an up year, had a lot of stuff that was winning i'd try to stick with it, and one of the winners is one of the names we're going to be talking about next as well. >> let's get to it it's one of the require bright spots. we're talking about conagra. the name behind hunt's, slim jim, orville reddenbacher. mike khouw says it's a good

time, should keep rolling in 2023 what are you going to do >> break out the popcorn for the packaged foods business. even despite the big rally -- this thing outperformed the s&p by better than 30% for the year. value i think is an attractive place to be. it's got bet than 3% dividends trading in the low double digits we've seen that performance. you want to hang on to the things that are working them one is working the interesting thing from the trading perspective, this being an options show, this is the kind of company that i might often try to recommend something like a buy right buy right is when you buy to stock and sell upside calls against it two things i would mention about that, though they have earnings coming up i don't generally favor doing covered calls right before you have a catalyst that could propel the stock higher. second thing is when you have a high dividend, that discounts the upside calls somewhat

relative to put. so you're going to collect a lilt less premium. that's justified but something to be aware of and also you need to be aware of when the stock goes "x" dividend if you own it, hold on to it if you don't, i think you can just buy the stock here. >> just buy the stock says mike khouw on "options action." i like this because mike walked through all the reasons you might not want to do an options trade on this. brian, do you agree? >> playing options obviously is always my forte and sort of playing volatility, and with the vix where it's at and volatility, it's come down quite a bit. and so anything where you're playing to the upside, i like owning calls and, that might be a way to play that to the upside. you know, something like conagra in the consumer staples area, we played for clients and strategies and our hedge equity strategies so i still like that in terms of the stock. we haven't really turned the table yet in the s&p 500 to say,

hey, i want to get more growth here a couple things going for you. one, conagra lines one that and i like using options because options are relatively cheap in most cases and instances in the indexes and individual equity right now. >> guy, do you like conagra? >> well, since you mentioned slim jims, i will say i've never had one. i will say there's a great scene in "trading places" with eddie murphy that talks about what beef jerky does to one of the participants i digress. i do like conagra. morgan stanley put a $45 price on it. i don't know if our crack staff at d.c. can do this at this late hour but it was february 2017 it topped out either we go blowing out this level or make the could be top all time i would submit you wait and see and trade it from there. >> i cannot believe you never had a slim jim i feel like you're one of a handful of people in the united states of america who never experienced a slim jim

>> how long have we known each other? long time. you know my constitution what do you think a slim jim or anything in that family of foods would do to me would wreck me. >> i'm not going to say this because i'm sure people at home might be eating dinner so i don't want to talk about those kinds of things, but i thought maybe before your constitutional problems you might have tried one. but i guess not. >> i see good point. up next, featured trade. how to prepare for trading season first one of the new year. "options action" is back in just moments. thinkorswim® by td amee 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.

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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. welcome back to "options action." tonight's featured trade comes to us from brian sutland what are you planning for the new year >> i'm looking at the financials in a couple of weeks we have a lot of the big banks reporting, jp morgan, bank of america and what not in this environment where the yield curve has been inverted for so long, big banks tend to lag some we've shifted either into assurance as part of the financial waiting or a stock like berkshire hathaway. it's a stock i really like they tend to have a big portfolio.

other than wells fargo, most of their portfolio is playing the inflationary environment and it's a stock that's held up pretty well over the last year for that reason, and really hung onto the $300 level here with options priced like i talked about before, relatively cheap, i'm looking at the jan 10 call it was trading 350 earlier stocks ran up into the close might be a little more expensive come monday, but right around $5.50. that's a break even. not expensive. 1.7% premium relative to the rest of the stock. so to the pretty cheap i think the market is going to make a big move in the new year. we have had a lot of -- and it's really getting ready to spring one way or the other if berkshire holds onto th $300 level i think it's got room to run all the way up to 320, and the reason i'm using calls

is i'm only risking the premium on the call. we break $300, the market goes lower, that $300 is a key level for the stock. and i only want to outlet a call premium rather than own a stock like this. so it seems like a pretty cheap play to the upside in a stock where that plays very well i an environment that's not so great for big banks but i need to own some kind of financials in my portfolio. >> guy, your thoughts on berkshire. >> it's friday, and i'm going digress again. it's interesting he said "come monday", because that's a great song by jimmy buffett, who by the way is related to warren buffett. every time the stock is sold off to that magnitude it's been a tremendous opportunity to get long again, so i happen to like not only the song "come monday," which is a nice little diddy but brian's options trade here. >> mike, your take on the trade? >> i think we have monday off,

but we bought berkshire in late june in our fund, and i think we talked about it on this show in late october if i'm not mistaken it's up about 7% since then, and 7% is not enough for me to go from buyer to seller, so i'm with brian on this one i'd be long berkshire. >> brian is confused because he's already off he's in south florida enjoying the squid painting last word, brian, on this trade? >> tuesday's going to be the day when things happen and shake up again. berkshire to the upside. it's an alternative way to play some financials. i still want to own financials in my portfolio. it's one we've continued to own and overweight this is a nice cheap way to play to the up side up next, your tweets and the final call

you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade. where smart investors get smarter℠. welcome back to "options action." time to take your tweets our first fan asks what is your

biggest macro trend to watch for 2023 mike, what would that be for you? >> wage inflation is what follows price inflation, and i think that's going to compress corporate earnings, that at least keeps the floor underneath real wages and maybe that keeps us out of a recession. >> brian, what would you say >> yeah, the macro environment we've got to watch interest rates here and watch the lqds, and hygs of the world. if they turn south, that's going to be very bad for the market. heads up for that, otherwise clear to the upside. >> do you think apple could come down to 100 where it starts to fill the gap >> brian, what do you think? >> well, we have some smart followers because, yeah, there are some gaps to fill down there. 120 is the key level of support. i was thinking if apple goes down there, maybe a 120 put spread i'd want to own down to 100, you're talking 14

that's super cheap i own this for clients if it gets down there i certainly want to own it if markets go south it's going to fill some gaps down there very smart follower here >> what is your suggested play on tesla going into the first month of the year, especially those not adverse to ending up long in the stock? >> i'd probably be inclined to pay with calls, but they're pretty expensive to look into spreads if you do that >> all right, guy, just quickly. >> a lot of smart people think it's got a lot lower to go that includes danny moses of the big short fame, so i'm in the danny moses camp. >> all right, it is time for the final final call of 2022 brian sutland, thanks for joining us tonight what do you say? >> yeah, i love it berkshire hathaway january 3 call buy >> guy, thank you as well for

joining us what will be your final call >> i am happy for your are our friendship, our continued hopeful success with "fast money" and "options action" and the entire team. >> mike khouw. conagra into earnings. happy new year. >> that does it for us here on "options action. happy new year, happy and healthy. don't go anywhere. cnbc special taking stock starts right now. is a paid programg for joint food with tamasteen, brought to you by nordic healthy living, a proud sponsor of the arthritis national research foundation. 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. (gentle bright music) - hello, i'm christine bullock. welcome viewers from across the country to "house call." today we're talking about your joints, what to do about those aching knees, shoulders, hips, and fingers. people often ask me what i think about the latest miracle pill cream or device