lewan: ♪ my home sweeeeeet ♪ ♪ ho-o-ooome ♪ right now on oa, your options roadmap ahead of a monster week of tech results the charts and trades are coming up and starbucks with big gains and can options give your portfolio a nice jolt. and later big money piling into emerging markets but is it too late to jump in. this is options action live from the nasdaq market site and let's check out some of the names seeing the most options action among them tesla, apple,

microsoft and netflix, and some etfs catching the traders' eyes as well. and we start off with apple tonight. out with results on thursday the stock down about 18% from both its year high and year low. so carter, which direction do you think is more likely at this point? >> yeah, this is sort of a push for me otherwise known as a pair of twos not a particularly big met a big move up 80%, 90% off its low. and if you were to look at a chart, we're exactly in the mid point of the range my hunch is to fade it >> and mike, what do you say >> yeah, i mean, it is interesting. as we look at the flow, you pointed out this is one of the names that saw a lot of activity this week. always very busy, but it did see big institutional prints and earlier this week we saw a big purchase of the fed 137 puts

nearly 4,000 actually of those were purchased, one of the blocks we saw was just over 13,000 paying 375, relatively short dated. we're only looking up to february 17th for that but it does seem clear possibly a hedge, but some institutional participants are leaning short like carter is >> brian, what is your hunch >> well, when it comes to apple and a lot of the big mega cap type stocks, it is not the best environment. yes, some interest rates have come down. but with apple, we sold a little bit today because i think that there is some bit of a run like carter mentioned to the up side and it is not in addition to see the put buyer come in. to me that tells me that maybe you get some sort of pullback here i think that there are other parts of the market when you seat gdp that we're in and the interest rate environment, it is not great. go back to the early 2000s, it wasn't great for the big mega caps i don't know if this is the

environment to hold apple but i can see where people are hedging or buying a put. >> apple won its biggest quarterly market share in china last quarter as the country reopened and there is a rush of investment into emerging markets. but can performance keep up. carter, what do you think? >> the word is rush. it has been impulsive. and if my estimation a bit too far too fast it is the equal and opposite moment of the despair that we saw when actually major wall street firms put out the phrase un uninvestable that set the low but now there is love and a rally back to a very difficult level. i'd take profits if long >> mike. >> yeah, i mean, first of all, when we were in those lows, we talked about some of these names. we talked about baba, we talked about k web. actually, we were and are still long jd.com. but this is quite a run that

we've seen we are back to a difficult level. some people have taken some profits, others i suspect are hedging them fxi, one of the biggest trades all week actually was a purchase of 43,000 of the april 28th puts buyer paying just 40 cents for those. theying a small amount but they have time to expiration and those will be profitable even if it doesn't blow through that strike in the near term >> brian, your thoughts on where it goes, down or do you stay long and hedge >> well, if i had to give a star rating on emerging markets in general, i'd probably give them about a four out of five and play a little bit to the upside. we highlighted a couple trades where they were playing to the upside right about to this level. so not unusual that this market is totally flipped so i could see a correction come here 5% or 10% back to the down side and something like fxi where people take profit

i'd limit my exposure. >> and another etf is home construction carter, do you also see this reversing course >> we have a tale of two stories here we've got dedicated home builders continuing higher but the big sort of related stocks, like home depot, lowes, sherwin williams out with earnings that were nothing sort of disaster. you can see that we're up against the down trend line in effect since the high. i think that you fade it here. >> mike. >> yeah, i mean, this is a situation when you are thinking about the supplier, bear in mind lumber prices have actually gone back up. not to their all-time highs that we saw in the pandemic, but elevated and copper prices too. but maybe the biggest issue in addition to seeing higher rates and some resistance in terms of home purchases is home inventories. new home inventories did fall a little bit about nine month supply down from ten

but think about that, ten months of new home inventory was a level that we'd only seen once before and that was during the housing bubble crash in 2009 >> wow brian. >> yeah, i mean, mike mentioned lumber futures ticking up significantly in the last just couple days or weeks here. so when you look at some of the home builders, i'm a little cautious myself. i think that there is down side pressure some of the activitier would seeing maybe suggests that it has not so much room to run. one thing though, the ten year falling back down to 3.5%, people that did buy call it six months to a year ago will now be able to refinance at lower rates. maybe a little cash in their pocket and mortgage rates are a little cheaper so people start to buy homes that is the one risk to the up side here. but this is due for a pullback it has had a big run and fundamentals don't look good >> moving along here, unusually warm winter weather leaving

natural gas nowhere to go but down does that continue >> well, it with be a so bad it is good. we know nat gas is down 75% from its peak there is ung and we're back to the well defined prior low i think heavy volume to the up side today closed well. i'm a buyer. >> it has been warmer than normal brian. >> it certainly has. and we've seen option activity play to the upside here. we've seen call spread buyers to the upside probably a way to trade the stock. because something like un fwchlt g is volatile. yes, we could hit some of the lows but i'd use call spreads or call options to play it to the upside you know, obviously the selloff is big carter highlighted the lows with ung. maybe this is the point to step

in >> and what do they call it, the widow maker? this is how volatile nat gas could be >> yeah, i'd say the folks appreciate how dangerous this can be i'm a former natural gas options trader myself. in the ung we saw a purchase of 8,000 calls, it was the march 11st that they were buying paying about 74 cents. and you know, actually to brian's point, i think that buying the march 10-13 call spread is probably a better bet, that would cost about 80 cents and that would lower your upside break even by about 9% to 10% of the current level of ung >> what do you think of the tweak, brian >> yeah, i like it actually. that is what i'm talking about it fits right in the sweet spot. you are not outlaying a lot of capital to play to the upside. we added names like valero, so there is some opportunity here some of the names move higher. you can play the etf with this call spread.

and let's get to the most actively traded options and tesla accounts for 7% of all options trading on an average day. but perhaps surprisingly what is right behind it, meta. so mike, we want to ask if you want to avoid the headline risk in tesla but still capitalize on activity, how do we play meta? >> yeah, first of all, meta is a name that we own it has had a heck of a run though if you haven't had the good fortune to own the stock, just seeing this bounce that we've seen since those late october/early november lows, i think that you could follow some of the institutional flows that we saw this week biggest print we saw was actually in the feb 152.5 calls just under 3,000 of those were purchased for about $7.30. this name will be reporting earnings implying a much larger than average move about 10%. and you can figure that out here you want to know how much the

implied move is, look at the earnings and straddle. put it together and divide by the price of the stock and that will give you your implied move. but right now we are seeing more bets to the upside going into earnings >> and which is staggering if you consider the move from its low, like 60 something percent >> yes, it is quite something and of course that low was set after a quarterly miss where the stock dropped some 20 plus percent in response to the news. tough one for me here. i would say it is best done through options. just getting long the stock after a move like this, hard do. and yet fighnding the strength,t is so persistent, i wouldn't want to be short either. >> okay. for everything options action, check out our website and newsletter much more after this still to come -- alphabet versus amazon. two tech giants coming up with results. two giant options strategies to get out ahead of them.

which one will you choose? plus calling on options action fans grab your phone and tweet us your question@options action if it is nice, we'll answer it on air when "options action" returns. @options action if it is nice, we'll answer it on air when "options action" returns.

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there is a huge slate of earnings on deck

and we're honing in on two of the biggest tech names on the board. let's start with alphabet. brian, you say earnings spell gains here >> i think it does i mean, we got a bit of an indication from netflix in terms of the streaming side of it and the youtube premium in terms of google and alphabet. and so i think that there will be upside. netflix moved up about 8.5% after its earnings so potential move to the upside there. only trading at about 20 pe forward looking here so it is not like it is a crazy valuation for the stock. it hasn't moved quite as much as the rest of the nasdaq probably one of the two mega cap names of the faang that i like and continue to hold for myself and for clients. and so i think that you can play it to the up side. but i want to use options do that though. after the run in the nasdaq, so ahead of earnings the stock could move 5.5%. and so i'm looking to bite february 104 call at the same

time sell the 110 call so buying a call spread. and to offset the cost i'm also selling the february 95 put. i actually get to collect 50 cents. so if nothing really happens to the stock around this $100 mark, i'm okay i think that there is a i symmetric meaning that to the upside we crack through that 10 w 4 mark and quickly moves to the 110.meaning that to the upside crack through that 10 4 mark and quickly moves to the 110 i'm okay owning google because i think that it sits there i'm okay with collecting 50 cents. >> to you like that trade? >> yeah, a couple things here. in a market where we've seen a lot of stocks sort of ricochet off bottoms, that is when the call spread risk reversals can sometimes make sense because you are caught chasing what is particularly appealing to me in google, i don't know what forward estimates it is that brian is looking at necessarily, i think that most

of the street is expecting nearly $5.70 a share so that actually gets us to about 17.5 times full year eps and of course about 7% of the share price is actually just net cash they have got over $90 billion in net cash. so the multiple gets below x cash so i think that that is why you can feel comfortable owning the stock at a lower price and of course you will see slightly elevated premium and that works in your favor >> carter, your thoughts on the chart. >> i'm in the two pairs camp here so only $2 above i suspect not much upside. better to use an options trade >> had to look up what pair of twos meant i knew it wasn't good. and also reporting amazon, that stock is on a tear up more than 20% already. so with earnings in the cart,

can we play the ecommerce giant. mike >> yeah, so amazon is a tough one for me it is not a stock that we own. first of all, let's just take a look at the good news. this is a stock that rallied very sharply online sales into the pandemic i'm not sure that they really delivered quite in terms of eps during that period, but the stock rocketed higher in that pandemic basically bubble i'd almost suggest and it has come back in. so we're looking at a valuation for amazon that is roughly a level pre-pandemic price so that is a potential positive. one of the down sides is that we're dealing with post-pandemic headwinds. you look at even their better businesses like cloud and we hear that business spending is under some pressure. right now the options market has a much larger than average implied move so unlike brian where i'm not sure that i'm comfortable owning it at a mild discount to the current stock price, i'm simply looking at a call spread if you

are inclined to take a bullish bet going in to earnings you want to sell an option against the one we buy because we see the elevated premiums i was looking out to rnlg made, b march, buying as close to the money as we could. out lay of just over four bucks a share on a stock that is about 102 1/2 or so. and that is less than the implied move of over 8%. >> carter, how does the chart look >> well, in this case we're coming off a bad heavy volume drop in gap last quarter i think that we'll retrace it to the up side. the chart you will see is an notated with a well defined head and shoulders bottom, one. we've moved above the down trend line, two. and that circle is where we dropped in gap from in response to earnings. third quarterly miss in a row,

that has only happened one other time in the past decade. is amazon going to miss a fourth quarter in a row i don't think so >> brian, your take. >> yeah, i mean, when you look at not only do you get amazo consumer discretionary, which maybe lends itself to some risk given the interest rate environment, but the cloud computing side, their earnings call, that was very strong and i suspect that that will be the case for amazon as well. that plays to the up side. and mike mentioned free cash flow and so maybe to sell a put because that company is cutting costs and laying off i'm okay owning that kind of stock. this may be more volatile amazon, i like the call spread to the upside. >> up next the latte lowdown on a past starbucks trade and new way to play the coffee chain don't go anywhere. good luck.

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>> yeah, i mean, i kind of got it -- when we first put the push spread on, the stock did have a pull back and i expected a bit of a pull back and the stock did go higher here i think though put spreads make very good risk/re resp reward ey after a huge run they were expecting over a 5% move and so that would take the stocks if it is negative to the down side. so i'm looking for a put spread and if there is any pull back, buying the march 110-100 put spread, cost is only $3. and it can pay $7 if it goes below 100. there is a lot of gap in the stock down below 100 here. seems like a good hedge. because if the report is well, great, upside, maybe it will retest at

120. but it still has decent fundamentals, but i think it is a bit overrun. >> mike, what do you think >> i think the valuation looks awfully rich here. four bucks is what they are expecting for full year 2024 i should say fiscal year 2024. highest that the company ever would have earned on the earnings per share basis and it would be 27 times that number? that is a little pricey. over 30 times basically what we're expecting this fiscal year and it is priced for perfection. i realize coffee is a hard thing to give up, but it really has to hit everything right to justify the current price. >> when it is like 7 bucks a cup, i mean, seems like a no-brainer to give up. carter, what do you think of the chart here >> this has been one of the best performing large caps stocks, it bottomed way above the market in the spring, never d never dippen october. but it has come too full, it is

full, expensive. whatever word you want to use, i'm a seller >> up next 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 time to take a some tweets first fan asks with the higher trading volume in options, do you like cboe before next week's earnings the chart looks all over the place. what do you think, brian >> i own the stock but i don't necessarily like it here their whole complex is fix options and s and p options. and now listing spice futures and i think others will follow suit it is cheaper to trade going to be a disrupter. so i don't love the stock right now. >> all right and next tweet asks, how bullish are you guys on etsy >> i would say very bullish.

textbook bearish to bullish reversal buy >> wow, i wouldn't have guessed had one. time for one more tweet, this one asks why is vix below 19 going into the fed meeting seems way too low. mike, do you agree >> damn right i break. it is amazing. we could easily be surprised by the fmoc right now you could buy a 30 delta one month put for about 1% of the underlier and we were below that level just about a week ago. so why not >> all right and it is time for the final call last call from the options pits. carter braxton worth, what do you say? >> uup is the etf to get you done >> brian >> google, i still like it ahead of earnings. cheap on the upside. >> mike khouw. >> and i love that question we got. options premiums have come in

quite a lot. we have big news coming up, a lot of earnings on deck. i think it makes sense >> that does it for us we'll see you next friday 5:30 for another show don't go anywhere, "mad money" starts right now - [narrator] the following is a paid presentation for neuroq, a total brain support supplement designed to boost memory and focus and clinically shown to improve working memory an astonishing 30% in just 90 days. brought to you by lifeseasons. do you have trouble concentrating or focusing on simple tasks? what about experiencing low energy, stress, or anxiety? - my memory, my focus, having those brain freezes, it seems to be getting progressively worse day by day. - having a little bit of a hard time finding words. i'm not as quick to the punch as i used to be.