right now on "options action," we're all about those rates. yields up today but pulling back over the last week, and we've got a trade that will help you maneuver future moves. time to shine? gold and silver on the move, we're polishing off a precious metals play you won't want to miss and we're gear up for a short but busies week. two names on the trade in carter's eyes. i'm melissa lee. on the desk tonight, carter worth, mike khouw, and bonawyn

coin base, netflix, tesla, american airlines, starbucks, so-called meme stocks. china, corporate debt, real estate, silver all catching our traders' eyes. let's start with one of the names the iyr real estate etf. carter, your thoughts? >> in my ways the biggest thing that went on this week, the rates. rates lower in response to soft economic data. let's look at a comparative chart. this is utilities versus rates to my eye, what we're looking at here is perspective convergence, right? one has really led and one has lagged, and i think we're going to get this. another way to do this is look at them each and do relative this is xlu. xlu rallied and failed, failed

hit its head here, and my thinking is we're going to continue lower by distinction, check out iyr. it's the lagger, but it's started to bottom and carve out what i think is the beginning of an important move higher so put them together instead of a comparative, this next chart is a relative line. it's one divided by the other, which is what relative strength or isr is. what we have, and there's no a way around this, is a beautiful double bottom. broke above trend, put in the green arrow. makes us long. >> for all of you astute "fast money" viewers, you'll remember carter mentioned this as a trade earlier in the week. mike, what do you think? >> i'm going to start with the second name first, xlu we definitely saw some bearish act at this time in there. we saw a purchase of 5,000 of the january 27th, weekly 71

puts throes the ones very close to add the money. those were trading for 97 cents. as for iyr, and we're seeing bets on continued volatility, but not necessarily to the downside the interesting trade there was apurchase of the february 83-96. paid $1.37 for a couple thousand of those when you're buying a strangle you're betting the thing's going to move around a lot, not necessarily betting a direction. i think we have a lot of news to discuss. one decent or better cpi print doesn't signal the all-clear as far as i'm concerned. >> let's goat commodities. precious metals on the move to kick off the year. bonawyn, your thoughts on silver >> silver gives you a beta exposure to gold as you start to see

outperformance of beta rates that lagged you probably want a barbell. i think whether you're going play gdl, gdx, oslv, those all make a portion of the play. >> carter, i know you like silver. >> the issue here is it's all about your time frame. gold has come a long way it's getting quite popular of late having not been popular silver, too. of the two, i think one wants to play silver, because it is beta. but also it has lagged gold, and that since the opportunity is in silver let's turn to single stocks. airbnb surging more than 13% this week. mike, what do you make of this. >> interesting this is a name where we have not an insignificant short interest is the first thing i would say we see a lot of puts trading this is not just today or this week, that's a consistent

reality of airbnb. that was true this week. put outpacing. calls by 2-1 some are short dated the trade that stood out to me was a purchase of puts not so much because this on the se enormous trade contract, but think about what someone's doing, spending nearly 5% of the current stock price on a trade that's 20% out of the money. giving themselves a decent alt of time, of course, till that april expiration. >> carter. >> >> i've just drawn a blank. >> air bnb. >> yeah. sorry, i was staring at the chart and wondering. this is precise. it's annoying to the fundamental crowd a stock could hitthe lin over and over. it's not "p," not priced to sales. the stock is threatening with breaking to new lows it has rallied we have been short i think ultimately it's going to get resolved to the downside sell. >> carter, you said you drew a

blank, but in actuality it doesn't matter what it says on the top of the chart. you would have looked at the lines, drawn the same circle, same outcome. >> true. thanks for the assist. >> let's round out with a retail name, ralph lauren picking higher bonawyn. >> interesting here. if i was going to play to the long side, which i would not you know you i feel about consumer discretionary it does appeal to a higher end consumer, but with that said, you saw it today, this isn't an area i would want to play in it would be with out of the money calls where i'm spending a very small percentage of the underline. >> carter? >> here we go. same way to draw the lines, because it doesn't matter to your point, but to the point of charts, how can it be ralph lauren gets to the line is stops every time it's about technicals. it's stuck it's not going to advance or

deteriorate. if i had to be directional, i'm thinking short. >> mike, what do you think >> they're going to be announcing earnings february 9th. of the single stock name wes saw this week, this one had the most interesting activity we saw a purchase of 16,000 of the february 90 puts, which is going to capture the earnings. air bnb announcing the same day. but that's a significant institutional bet to the downside on that catalyst. any consumer discretionary thing, not a place i want to be alone. all right. still to come, a big week of earns on deck. we're picking out two names to watch. for everything "options action" check out our website and news letter. much more right after this

welcome back to "options action." huge slate of earnings next week banks and airlines and a whole lot more on deck to deliver results. our traders are diving into two names before the action. let's kick it off with netflix >> netflix is an interesting case, of course, because this thing has really moved over the course of the last four earnings, more than 20% on average. more than 25%, actually. and it's had a huge move off the bottom when we looked at this thing six months ago, it was getting to be a value stock. i don't think that's really the case anymore here, trading around 29, maybe 30 times forward earnings but i could see why somebody might be inclined to continue to

press your longs here, given the way the stock's seemingly behavinbe behaving right now how to play it -- market 11% move, and options are quite elevated so i think the way to play this is using a diagonal call spread. i was looking at the march 350 january 370 diagonal call spread selling the 370s for about 5 spending 15 bucks in dream yum or thereabouts notice the call i'm selling is basically very close to or just above that 11% upside move. >> carter? >> so, yeah, this is the circumstance of two things in conflict it's a great winner but it's back to a difficult level, in fact, back to the scene of the crime. it was april '20 a year ago when

it plunged on its earnings my hunch is to be long, but smaller long than one has been what's your take on netflix? >> i think with a valuation stand point it's come off quite a bit. if you look at it over the last five year it's been cut in half, if not more. in term of playing this, and mike's trade in particular, first glance you look at the risk-reward and say, i don't know if that's the setup i want, but keep in mind and knowing the way the professor moves he's looking at a diagonal. he's got that march call and likely rolling something against that taking in more premium and lowering his cost bases while maintaining optionalty, so from that standpoint, i think it's a spresing trade. >> mike, did bonawyn guess right? >> yeah, there's two things. it's going to expire that's going to offset a lot of the decay. you're going to have to opportunity to sell weeklies

against it the capital commitment is relatively low certainly low to stock the final point i would make is those marches, march, april, out to june, the volatility, that's the price of options, considerably lower than near-dated weeklies that are basically looking only at earnings. >> let's move on to another big name delivering results next week procter & gamble reporting thursday mike, how are you thinking about this thing >> yeah, so this is an interesting thing. when you're in let's call it a bear market, people like to rush to things like staples, packaged goods that seem like it's fairly safe first of all, the company is not cheap. it's not cheap to its peers. it's probably a turn over the peer group, and certainly not cheap compared to the s&p. take a look at the revenue picture. all you ever did was take a look at the revenue line and say, it's not growing it's stagnant, going sideways. actually, it's a little bit worse than that. why? because we have had an inflationary environment, had

higher prices. so prices are going up volumes are going down when do you want to buy a business that's selling less and less of what they make year after year now, this is not a stock that typically moves a whole lot on earnings, in fact, it's less than 3%, which is what it's currently implying this is not a stock i have been reaching out to buy. actually favor going to the short side, and that's one of the reasons i was taking a look at a put spread, and a very close put spread to the near $350 stock price i was looking at march $1.50 going to spend about $3, so 2% of the current stock price less than the implied move going all the way out to march to make a near side short bet on prohibitinger and gamble. >> carter? >> strong stock that stalled might have some charts to depict that a strong moveoff its october low along with most stocks in the market

but we've broken trend we have something of a triple top. if you put in a trend line you'll see we have broken trend. my thought is play it on the short side. >> i really lake this trade. whether you look at the beta or move from .4 you're probably not going to get a move. i hick that tight put spread which will likely capture the bulk of the move. >> mike, last word. >> that's the important thing to think about is when you're looking at companies like that one that don't move a lot it's tempting to get leverage, buy the cheap options, the ones way out of the money, and you're looking for the five to ten bagger but in a name like procter you're probably not going to get that if it's going to weaken, probably going to do so slowly wechb a catalystsuch as earnings coming up. up next, one area having quite the run, but could the surge being overheated, and how should you play the move p "options action" back in two

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welcome back to "options action." semistocks outperformed the last few months but our next guest thinks it may be long in the tooth. kelly intelligence ceo kevin kelly joins us now to lay out a trade. what's the trade >> the trade is actually hedging your portfolio against the semis, and one of the reasons why is if we look at the semiconductor industry, it's really cyclical, so it has a pretty big exposure to a recession or even corporate spending and one of the great aspects of semis has been it exposure to the cloud and data center, so that could actually become a head wind as posed to a tail wind because we're anticipating there's going to be flat to cap down ex in the cloud and data center space, which helped them out over the previous years.

another thing about the semis is there's heightened geopolitical risk right now around the names. and we've seen the china lockdowns impact a lot of supply chain when it comes to semisubjectingers. but you also have the u.s. goth, which has restricted exports to china mainland it's a hot-bed issue there, and another thing interesting thing that happened this year is that the tone out of the consumer electronic show was slightly more negative. normally it's pretty bullish on the year so that's pretty interesting against the backdrop about how semiconductors and the smh has been up 10% this year. if you just look at -- it's up and trading at a heightened p.e. so we think one of the best ways to really protect your portfolio, given the vast amount of runs and how semis may be long in the tooth is actually purchasing a put spread all the way out to may somewhat you're

going to do is let a lot of those catalysts that i talked about play out through may, because you'll get two earning seasons that will actually impact as well on the guidance going forward should there be heightened concerns around the space. so what you want to do is actually two it and buy the 225 put here, sell the 195 against it it costs roughly $9.55, and you can make two times the amount of your money on that i like the risk-reward aspect. given the pact that it's run so much and really cyclical, this is a great way to hedge the market over the next seven months and the most you can lose is $9.55, so you're really capping your losses in a volatile space. >> kevin, thanks kevin kelly, kelly intelligence. mike, what's your take on the trade be the notion this is a hedge for the markets overall? >> yeah, i agree with that we're pretty underweight in this

space right now. we do own taiwan semi, but that's the only chip name we have at the moment the interesting thing about the trade he was just suggesting is that when you trade a vertical spread, like a put spread, you're basically playing at the money, implied volatility and selling out, imply volatility. what's going impact, whether that's attractive or not, is how much skew there is the out of the money puts have a better bid relative to the at the moneys you're purchasing and interesting, week over week it did steepen it's a more attractive hedging bet today more than it would have been a week ago, because it's that dynamic. i also think this is a pretty beaten up space, and it has a lot of theta, so if you get good news, you might still get a pop. >> carter, what do you think of the charts >> yeah, it is a pretty beaten

up space, but the one thing is, it's not a cohesive group. while there's the orb or index, there's such a path. the biggest one, mike, you mentioned, tsm at 11% of the entire smh, it's fantastic it has all the elements of a bearish to bullish reversal. >> get that on my own. >> bonawyn, what do you think? >> smh ran back up to the level where it failed previously before this big move higher so i wouldn't be vised to see resistance there you can check with carter and get his thought there is i would echo the others in thoughts of tsm, and squus the fact that we have seen some of this beta stuff catch a higher bid lately 100%, with the cyclical nature of the space and use it as a hedge for your portfolio, i would likely slide this in in

term of maturity >> mike just asked a question on -- how do you view china and the rally we've seen in term of lifting tsm, and what happens when that reverses is it correlated >> there's definitely correlation. all of the chinese stocks, and that's a slightly different situation than taiwan semis. if we're taking just a look at the big names, these things were so beaten up basicallyon bad china news, they had nowhere to go but up. they were so cheap relative to their peers, and i think that's one of the dynamics that's playing out here of course many cases are going to be competing for the same sorts of business, but they're trading cheap relative to their peers elsewhere because of that head wind and having that relieved gives it more upside. that's one of the reasons we like this one and little else. >>up> next, your tweet ss and h

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welcome back to "options action." time to take some tweets our first fan asks, can you give me suggestions on march 17 spy puts i have 370 puts. should i sell or hold? carter >> as a hedge, and you'll be able to go through earnings here, while it would take a 7% decline to make those in the money, i would hold them we don't know what's coming but there's everybody possibility earnings will be poor. >> our next fan asks, with china opening, look teg charts and listening to the ceos outlooks what do you think about a bullish risk reversal for nike mike, i'll go to you for that. >> okay, so first things first, i like buying longer dated options, like selling shorter dated options. i think the only thing i would say to adjust this trade might be to actually shorten up the

expiration on the put side, so work your way into a diagonal. i don't like the idea of being short options on any stock, frankly, for a whole year. >> all right, our last fan asks, what do you think about floor and decor, fmd >> on a valuation basis this looks cheaper than it has been it's still not chep to the market i'm not particularly thrilled with the exposure to builders, specifically in the commercial space. i'd probably just play directly in builders. >> time for the final call carter braxton worth >> nothing wrong with taking a profit i would do it. gld, reduce. >> bonowyn >> i like mike's pg put spread. >> thanks for joining us. >> my pleasure. >> mike khouw, professor, what do you say >> procter and gamble, cheap put spreads to the downside. >> that does it for us be back here next friday,

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