$300,000. that's what it was done for -- $300,000. right now on "options action" quwe're all about the rates. pulling back and a trade to help you maneuver future moves. plus time to shine gold and silver, polishing off a precious metals play you won't want to miss, and gearing up for a short but busy week to widely used names and i'm melissa lee this is "options action" and on the desk mike khouw, carter worth and bonawyn. welcome. the "options action" this week,

coinbase, netflix, tesla, americanarylines, starbucks, bali meme stocks seeing action. etfs, catching traders' eyes one of those names, iyr real estate etf carter, your thoughts? >> so in many ways one of the biggest things that went on this week, of course, the moving rates. rates lower in response to soft economic data. in any event, look at a comparative chart. utilities versus reits, the two most rate-sensitive areas of the market to my eye what we're looking at here is perspective convergence. right? one is led, one lagged we'll get this another way to do this instead of looking at two lines look at them each and do relative. this is xlu. what do we know? rallied and failed, failed, hit

a head here and my thinking continue lower connecticut tra distinction check out iyr. the laggard 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 the a relative line, one divided by the other what relative strength or rsi is what we have no way aaron this. a beautiful double bottom. a v move, of course, broke above trend, put in the green arrow wants us want to be long reits over utilities. >> for all of you, astute "fast money" viewers, apairs trade earlier in the week. mike, your thoughts on this? >> yeah. so i mean, taking a look at the options flows seen this week, start with the second name first, xlu bearish activity, purchase of actually 5,000 january 27th

weekly 71 puts, those close at the money trading about 95 cents that took place monday iyr, and seeing in a lot of rate sensitive places, bets on continued volatility not necessarily to the down side interesting trade, purchase of february 8394 traders pay $1.37 for a couple thousand of those when you buy a strangle making a bet the thing will move a lot. not specifying a direction i think we have a lot of news to digest here on the rates and inflation front. one decent or maybe better cpi print doesn't signal the all-clear as far as i'm concerned. >> get to commodities. precious metals on the move kicking off the year b your thoughts or silver? >> gold and sillversilver, fix d volatility seeing out performance of higher

beta names that lagged, bar bell them to give a much larger margin of safety whether playing, all make sense as a portion to that play. >> carter, you like silver, i know >> yes well, so the issue here. it's all about time frame. gold has come a long way right? getting quite popular of late. silver, too. of the two, silver, lagged gold over the last two weeks. i think opportunity's in silver. slv versus glv. >> single stocks seeing action in "options action," airbnb surging this week. what did you make of this, mike? >> yeah. airbnb, interesting. a name where we have not an insignificant short interest first thing i would say. see a lot of puts trading. actually not today or just this week, a fairly consistent reality for airbnb

true again this week puts out pacing calls 2-1 some sort stated the trade that stuck out to me, the april 80 puts for $4.75. not so much an enormous trade in contract terns think about what somebody's doing here spending nearly 5% of the current stock price on a put trade that's 20% out of the money giving themselves a decent amount of time, though, of course, to that april expiration. >> carter? >> you know, drawing a blank. >> airbnb. >> yes thank you. sorry. staring at the chart and wondering. so let's look at it. here we go particularly precise, a fundamental crowd, stock to hit the trend line over and over, not pe, price to sales breaking to new lows rallied. been short ultimately i think resolved to the down side. sell. >> carter drew a blank in actuality doesn't matter what

it says on top of that chart. >> it doesn't. >> look at the line es you would have drawn the same circles and same outcomes. >> thanks for the assist you're right >> round it out with a retail name ralph lauren adding to a recent run. bonham what did you make of this >> price action is interesting here if played from the long side, i would not. by now you know i feel about consumer discretionary going forward, one thing appeals to higher-end consumer that said, saw from the bank today with provisioning, this isn't an area i'd want to play in if so with some out of the money calls, a very small percentage of the underline. >> carter. >> here we go. same way to draw the lines doesn't matter to your point, melissa. to the point of charts, how can it be ralph loren get-- ralph lauren, it's stuck not advance nor deteriorate.

had to be intentional thinking short. >> mike? what do you think? >> announcing earnings february 9th. of the single named stocks we saw this week this had most interesting activity saw a purchase of 15,000 of the february 90 puts, capturing that earnings by the way, airbnb announcing i believe the same day that's a significant institutional bet to the down side on that catalyst and this just isn't -- any consumer discretionary thing not a place i want to be long here. >> still to come, a big week of earnings on deck picking out two names to watch and for everything "options action" check out other website and newsletter much more ""o.a."" right after this. >> announcer: dolling all "options action" fans, reach into your pocket, grab your phone and tweet us at "options action." if it's nice we're answer it on-air when "options action" returns.

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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℠. huge slate of earnings next week more banks than airlines and a lot more on debt to deliver results. traders diving into two names with the action. dick off with netflix. mike >> an interesting case, of course, because this really moved over the course of the last four earnings more than 20% on average more than 25%, actually. had a huge move off the bottom

actually, we look at this thing about six months ago, it was actually almost getting to be a value stock. not the case anymore here trading around 29, maybe 30 times forward earnings but cot see why somebody might be inclined to continue to press your longs here given the way the stock's seemingly behaving right now. quick thing about the way to play it, though. my thinking, options market 11% move and near data in particular quite elevated the way to play this is actually dying actually die agonal call spread spending a little over 20 bucks and selling for about 5. idea spending abouts $15 in premium or thereabouts notice that the call i'm selling is basically very close to or just above that 11% upside move. >> carter? what about you

>> and two things in conflict. a great winner but back to a difficult level. right? in fact, back to the scene of the psych. it was april 20, a year ago, when it plunged. almost 40% on its earnings so my hunch is actually be long but smaller long than one has been. >> bonawyn, your take on netflix? >> from a valuation standpoint off quite a bit look at it over the last five years. cut in half if not more. now, in terms of playing this, and mike's trade in particular, on first glance, look at risk and reward were, ah, i don't know if that's the setup i want. keeping in mind, knowing the way the professor moves, looking at a diagonal and the march call. knowing him likely rolling something else against that. taking in more premium and lowering his cost basis, while maintaining optionality. from that standpoint i think it's a very interesting trade. >> mike, what you -- did bonawyn guess right in terms of what the

professor would do >> two things. exactly right. near options not expiring end of next week, offsetting a lot of decay. you have opportunity to sell weeklies against it. the other thing is the capital commitment here is relatively low. certainly low relative to actually going out and purchasing the stock final point i make, those marches, march, april, leave it out to june, implied volatility, price of options, those options considerably lower than just these near-dated weeklies basically looking only at earnings. >> all right move on to another big name delivering results next week procter & gamble reporting thursday mike, how do you think about this >> yeah. so this san interesting thing. when you're in let's call it a bear market kind of condition people like to rush to things like staples, packaged goods, stuff like that, seems fairly safe a couple points about procter & gamble first of all the company's not cheap. not cheap to peers, probably turn over of the peer group and certainly not cheap relative to s&p trading about 25 times

forward earnings look at the revenue picture. all of ever did look at the revenue line, not growing, stagnant, growing sideways it's a little worse. why? inflationary environment, seen higher prices. prices are going up. volumes are going down when 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. still, not a stock i would reach out to buy here. if anything actually favor going to the short side and that's one of the reasons i was looking at a put spread a very close put spread to $150, stock currently trading at looking at march 150, 145, with the stock close to 150 at the time spend about $3 2% of the current stock price less than the implied move going all the way out to march to make sort of a nearside short bet on

procter & gamble. >> all right >> a strong stock that stalled up on the charts here, depicting that a strong move off its october low along with most stocks in the market, but we have broken trend. something of a triple top. you see that there put in the trend line you see we have a broken trend. my thinking to play it on the short side >> bonawyn >> i really like this trade. whether you look at 0.4, probably not a crazy move. i like the tight put spread likely capture bulk of that move. >> mike, last word here. >> yeah. the important thing to think about is that when you're looking at companies like this one that doesn't move a whole lot it's often tempting to try to get leverage. buy cheap options, the ones way out of on the money and looking for the five to ten bagger a name like proctor, likely not get it if it's weakened, do it modestly, slowly, even with a

catalyst with earnings coming up. up next, one area of tech having quite the run, but could the surge be wgetting overheatedened a how should you play the move? "options" back in two.

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welcome back to ps"options action." our next guest thinks chip may be long and laying out a way to play the group with options. intelligence ceo kevin kelly joins us to lay out a trade. kevin, what's the trade? >> hi, melissa happy friday 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 cyclical and has a pretty big exposure to a recession or even corporate spending, and one of the great aspects of semis has been, its exposure to the cloud and data center. so that could actually become a headwind as opposed to a tailwind anticipating flat to down cap x helping them out over the previous years another thing about the semis is, there's heightened

geopolitical risk right now around the nate. we've seen the china lockdowns actually impact a lot of the supply chains when it comes to semiconductors, but also the u.s. government restricted exports to china mainland. a hotbed issue there another interesting thing that happened this year is that the tone out of the consumer electronics show was actually slightly more negative normally pretty bullish on the year so that's pretty interesting against the backdrop about how s semiconductors and smplt mh up 10% this year. look at nvidia, up over 15% and still trading at a heightened pe of over 50 times forward earnings so we think one of the best ways to really protect your portfolio given the vast amount of returns and how semis are is purchase a put spread all the way out to may. what you're going to do is let a

lot of those catalysts i talked about play out through may get two earnings seasons that will actually impact as well on the guidings going forward should, there be heightened concerns around the space. what you want to do is actually go out 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 so i like the risk/reward aspect here, and given the fact that it's run so much and it's really cyclical, this is a great way to hedge the overall market for the next several months, and the most you can use ilose, that 955 capping losses in a volatile space. >> kevin. >> thanks. conservy kelly, kelly intelligence. >> a notion this is also a hedge for the markets overall? >> yeah. i mean, i agree with that. we're pretty underweight in the space right now.

we do own semi, the only chip name we actually have at the moment the interesting thing about the trade he just was suggesting when you trade a vertical spread like a put spread, you're basically paying at the money implied volatility and selling out of the money implied volatility what's going to impact whether acontractive or not, how spew this is. more put spew out of the money puts have a better bid relative to the monies you're purchasing. interestingly, week over week it did. seen and actually a more attractive hedging trade to put on today than it would have been even a week ago because of that dynamic. and it has had a bit of a move here i do also think, though, that this was a pretty beaten-up space and has a lot of beta. get surprisingly good news out of earnings, for example, on one of these you might still get a pop. >> carter? what do you think of the charts? >> a pretty beaten up stock and

while the stock index on which it's based a divergent path. intel and nyu. tsm, 11%, has all elements of a bearish to bullish reversal. >> bonawyn, your -- >> and what i own. >> bonawyn what do you think >> smh run back up to the level it fell previously before this big move higher. wouldn't be surprised to see resistance there check with carter on insights there. i echo the other two panelists in the terms of tsm and the fact we've seen higher beta stuff catch a bid lately that said, 100% agree in terms of cyclical nature of the space, using it as a hedge for your portfolio and likely just slide it thin terms of maturity a bit. >> mike asked a fundamental question on tsm, popular semi

stock of the segment how do you view impact of china and the rally in china in terms of lifting tsm and what happens when that rally reverses is it correlated >> well, definitely some correlation. all of the chinese stocks, that's slightly a different situation than taiwan semi looking at kweb, the big names, these things were so beaten up basically on bad china news. had nowhere to go but up so cheap relative to peers in almost any other geographic region that's playing out here. in many cases competing to are some of the same sorts of business but trading cheap relative to peers elsewhere because of that headwind having that relieved essentially gives it more upside and one of the reasons why we like this one and little else. >> up next, tweets and the "final trade."

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." time to take tweets. first fan asked, can you give any suggestions on march 17th puts 370 put. should i sell or hold? carter >> well, as a hedge, you'll be able to go through earnings here, while take a 7% decline to make those in the money, i would hold them. we don't know what's coming, but there's every possibility earnings will be poor. >> all right next fan asks, with china opening looking at charts and 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. you know, i like buying longer dated options. i like selling shorter dated options. so 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 being

short options on any stock, frankly, for a whole year. >> all right last fan asks, what do you think about floor and's day core fnd? bonawyn? >> valuation basis, looked a lot cheaper than it has been that said, still not cleep to the market and not thrilled at exposure particularly commercial space. playing the space, if i were, given where valuations are play directly in the bullish. >> time for the "final call. carter >> nothing wrong with taking a profit now and then. do it. gld, reduce. >> bonawyn eison >> i like the put spread. thanks for joining us here on "options action." great to have you. >> thank you. >> mike khouw, what do you say >> procter & gamble going into earnings the way to play for the down side. >> all right that does it for us here on pxz p "options action. back here next friday. monday ap holiday. enjoy the weekend. don't go anywhere.

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