right now on "options action," two different take on consumer discretionary spending. which will prevail, and how should you hedge earning season, we've hit a double for you disney and nvidia. one in a shake-up, the other way up to the tune of 50% this year, and finally, featured trader kevin kelly joins us with a post earnings play on a winning biotech name i'm dominic chu in for melissa lee tonight. this is "options action" live from times square in new york

city on the desk tonight, mike khouw, carter worth, and brian stutland as you can see there the groundhog says we're getting six more week of winter, but in bloom on wall street check out some of the name on deck to report results all ready to deliver results next week some let's drill down on what we can expect from some of those stocks we'll kick it off with uber. it's been a five-star start. mike khouw, what do you think about uber >> obviously it's been a spectacular beginning to the year it's been a big run we've seen this week. up 7% or so just since wednesday. the options market is implying a move of about 11% by the end of next week after they report earnings, but a lot of the flow we saw this weak was bullish the biggest coming in the weekly 32.5 calls that expire at the end of the next week we saw a good size by a nearly

8,000 of those paid $1.18 the stock higher if you're looking to pay something similar probably have to go up a dollar this strikes but the flow is bullish. >> flow is bullish carter worth, what do you think? >> i don't care i don't think you could find a better chart. this is a stock this bamed before the market, never made an october low. what we know is while that low was 20, we've moved well below the downturned trend line. i like it a lot. >> brian stutland, what do you think? >> i think the keyword you see in that options low is bought. we have been seeing buyers of all kinds of options all week long guess what the market realized these moves, so it absolutely makes sense that this trader is trying to buy calls and play the upside. i know they're predicting a tremendous move and the options are rather expensive, but like carter mentions on his chart, we break out to the upside, that

could be a big move. >> one name that has not had such a great start to the year is pepsico shares down 6% what's your take pepsi or consumer staples in general? >> both. there's been such a huge rotation from consumer staples to names like uber in consumer discretionary. here's a name that moved around to start the year. hung in there terrific last year in an inflationary environment, pepsi's good if we're get out of hoo and the fed is done raising rates, people are taking shots. pepsi seems to be the lagger here, and some of the activity we're seeing in the options market is indicating that. >> mike khouw, what do you think about pepsico? >> 20 times. not a real performer head winds starting to abate, as we've seen the dixie fall.

but it's not cheap, certainly compared to the market and some other names. we're in a more risk on world you're not going to pay 24 times for this when you can get a better grower at 19 times and we dod see a lot of put tout june this week. >> all right, larger groups. transportation stocks climbing nearly 14% this year carter worth, do those transports continue higher >> well, we have a circumstance here just from the january low where the dow jones transportation average versus the dow jones industrial average -- the transports are up 6x what the industrials are, which is to say there's been a huge move. we know it's a price weighted in index, odfl being the big weight i think you fade it here it's too much of a good thing back to a difficult level. >> it's been a momentum trade. mike khouw, what do we think about the transports >> it's interesting.

saw big bearish flow airlines, aal, american airlines they have a big fleet, and we are seeing increases in capacity there. that is a bit of a challenge, and they continue to have some, you know, issues with increasing wages and finding employees, really, is one of their challenges we also some big bearish bets on the freight side in trucking knx is where we saw that we saw a lot of trucking rates those continue to decline, and that's obviously not a good situation for them either. they're both constituents of the transports. >> brian stutland, what do we think about the transportation stocks and also, do we think it tells us anything about the broader market >> it does a little bit in the sense we feel like maybe the market's ready the move higher here we saw aal, again, the word bought, meaning they're buying options here to me that seem like a hedge trade to the downside, and it's a perfect trade. things like this, iyt that seems

to be overextended, those are names are you can buy this put, keep yourself hedged if you don't want to get out of these socks and pick up cheap premiums should we move back down lower on this side, because this is certainly an area that seems overextended iyt, overweight freight names. and if you're not bullish on freight, which i'm not, buying puts on certain names, airline industry, probably makes sense. >> that up 14% since the beginning of the year. finally, let's talk about retail a number of names delivering results next week -- matel, under armour, capri. what do you think of the group >> we awe real bullish -- bearish flows. march 66/60 put spread

this is a general sense that the numbers we could be getting out of them are disappointing. we're coming off almost the days for retail we saw coming out of the pandemic almost every retailer benefitting from that except maybe amazon if we think about it but it does seem like the sentiment for the group going into these earnings is not positive. >> carter, what do we think of the charts just too hot, whether you think about it fundamentally or from money flow we have had a huge bounce, massive relative performance you can see on the chart after bouncing off trend, we're right back to a difficult level similar to apple in that sense i would fade it here. >> brian, what do we think >> i think what's interesting about the options trades that mike pointed out sit captures a hedge against that 66 to 60 level, where it starts to form a base and looks like it's breaking out to me, that's a great structure

trade to hedge buying a put spread to cover back in case it goes down to the range, making a lot of sense one thing that is bullish, it tends to weigh towards big cap, not mega caps. we like that market starts to move higher, those names are going to go. it's underweight those names amazon only 1% waiting in this sector etf i like the structure of the put spread put on by whoever that retail trader was. >> lots of ground cover there had. thank you, guys. for everything "options action," check out our newsletter more "options action" coming up after this >> announcer: coming up, an earnings two-fer one now and one for later. first up, disney on deck for next week. then, nvidia is already up 50%

year to date, and it doesn't report foranother couple of weeks. we'll help you prepare for both with options plus, calling all "options action" fans reach into your pocket, grab your phone, and tweet us your question @options action if it's nicewe, 'll answer it on air when "options action" returns.

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welcome back to "options action." earnings season is in full swing as you can see there there's a ton of big names on deck to report next week mike khouw's got a call to action on one name that could see some magic when results cross the wires.

mike >> we're taking a look at disney of course. you know, this is an interesting situation. this name fell nearly 60% from the peak to the trough even net of the big upswing we've seen recently. still down 45% from those all-time highs we saw about a year ago now, when we're looking at the earnings right now, the options market implying a move just under 6% by the end of next week, and of course there's a lot of things going on there we've seen the return of bob iger and a little bit of trouble in the management c suite, and on top of that we've also got the pelts family in there kicking around, trying to get a board seat, so we have activist activity going on. disney's prime property has always been espn that does need to adapt to a streaming universe, but i think that's a great property s

and their parks business doing well if they can get back not even to peak eps, 7 bucks a year ago, but back to 6 and a growth rate, i think this is a name you could own. however, the way you want to do that is with calls we do see activity i was looking out to april 120 calls. you're going to be risking a relatively small percentage of the stock price to make a bullish bet that will carry you well through earnings. >> the 120 call is what we're looking at now you pay out about $3.75 in premiums this is the kind of trade you're saying brian what's your take on the trade? call option the way to go? >> like i mentioned at the top of the show, i'm a buyer of options. the level of movement we've seen in the stock market in individual names warrants owning options, especially areas such as consumer discretionary or telecom name like disney

all the telecom and streaming stocks have had a huge move to the upside, and maybe taking a shot with a call that it continues is interesting to me i think it's a name that you can carve out of that consumer discretionary, like i said, telecom instead of etf, add to the portfolio, do it with the call >> brian, which name are you looking at >> well, nvidia is a name that's been on fire the stock is up 35% or so in recent weeks and the rest of the chip sector really looks like it's gone through this head and shoulder bottoming process, and when you look at nvidia compared to the rest of cryptocurrency, this is an interesting take. it's moved lock step with crypto, and sort of after the whole ftx shakeout we saw it turn and go higher

chips are in the mining components and, maybe that's why two things move together they have had such a big run it may be time to buy e-put earnings at the end of the month -- lyme looking at the february 24th for this option, buying the 200 put, paying 7 buck testimonies break even $193 on the downsider you're only risking $7 as a max loss you have been long in the stock, which i have for clients, buying a put or stay hedged it's moving significantly higher based on its earnings or it's going to retrace back down to the 190 level and i'd want to use a put to protection myself on the downside. >> what do the charts tell you is this the way to do this expecting downside for nvidia? >> i'm in the retrace camp, just as you heard there if you look at the chart, what you'll see is, as is the case with so many instruments, you have this well formed bottom

and yet, to some extent, we've already sort of reached a price objective from that head and shoulders bottom where you're likely to hit your head. it's a double off the low, 108 to 219 take action. if you're long, take measures. >> okay. coming up on the show, we've got a biotech bet coming up. our next guest has a way to play the pharma name. ptnsctn"t the trade when "oio aio returns we're back in two minutes.

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regeneron is on your radar. >> thanks, dom really appreciate it and one of the reasons why is the implied move was 3.25% when it was up 6.25%. when you take a step back and figure out why, it's because you have a company that beat and raise off earnings on the top line, they actually -- if you take out their covid antibody, they were up about 17% on revenues year over year, and their earnings were up 20%. so you've got great growth in the name, and it's only trading at 18.5 times earnings going forward, this company has a great pipeline they've got three stable drugs that are growing, and then they've a deep pipeline and a catalyst in late august this year where they can get another approval in the fda for one of their current in place drugs if you take a look at the stock,

it's a great stock technically, trading above its 50 day, 100 day, 200 day you look, it's hitting all-time highs. so when you have a company like this, you want to put -- you want to use options to position going forward through their next earnings season. and that's because they've beat on revenues and earnings out of the last eight quarters. so you can use a call spread to position yourself for a company in their next earnings season and not spend too much and so that's why we actually like what's going on with the 780/850 call spread. it's only going cost you $30, so you can make two, three times the amount of capital you have only costs 3. % of the actual share price. vol is about 27 right here, and the action to date in the actions market was actually over three times the amount of calls

versus puts. so we think it's a great way to play earnings going forward in a great company with proven management team. >> kevin kelly with the trade on regeneron. thank you very much. mike khouw, let's talk about your trade seems risk defined, controllable is this the way to play rege regeneron? >> brian said he finds options are reasonably priced here in an environment like, that i think going out and buying longer dated calls would be a fine way to play it. as kevin pointed out, this is growth at a reasonable price i don't expect to see the growth we've seen in the company's history. it doubled its e.p.s. over the last five years. doesn't need to do that to be justifiable on the long side another reason i think he's looking at a call spread is how much capital you're putting out not relative to the price of stock, but in term of each share

is a high dollar price, so any options contract that costs over 50 bucks you're looking at over $5,000 in premium. this is a way you could cap that outlay i wouldn't mind calls earth if i had the capital to deploy there. >> call spreads or calls outright carter braxton worth, what do you think of the charts there? is regeneron due for a move higher >> it's bullish correlation impressive strength making new 52-week highs. and also it's been a lagger that's coming back to life regeneron's performance to the s&p health-care sector peaked in 2015, and it's been on the mend since, absolute and welrelative you see the chart there, up to the right, north by northwest, what's not to like >> all right, hold it right there, gentleman by the way, we do have a verdict that has been reached in the tesla shareholder trial versus

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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. okay, welcome back, folks. we've got some breaking news on that tesla trial verdict we alone musk phil has all the details what can you tell us >> dom, it is a victory for elon musk the jury found he is not liable for the statements that he tweeted out when he said he was considering taking tesla private at $420 a share, and the jury returned a verdict, saying that he is not liable for those statements so this is a complete victory for elon musk, and i think a lot of people may be surprised at this i think many people thought,

surely they'll say he's responsible for what he tweeted out and any damages. these shareholders claim he inf inflicted on them any losses, but that is not the way the jury sees it. the jury ruling in favor of elon musk and that tweet that was sent out in 2018, essentially ruling in favor he's not liable for any damages to shareholders who believe he should have paid money to them for damages they say they suffered after the shares immediately popped up and then they came back down so a victory for elon musk this afternoon. >> again, elon musk not liable in securities fraud in the case of that tweet. we'll see you later on mike khouw, let's go to you. i'm watching the afterhours action in tesla. let's caveat this. this is a friday afternoon pushing on to 6:00 p.m we're not going to see a lot of activity it's up fractionally what does this mean for tesla

stock? >> i don't think it's going to make that much of a difference this was really about elon and actually i think this is the right outcome. if you had bought it right after he made that tweet at its peak you still would have had one of the best investments over the course of the next couple years had you owned the stock, regardless of what happened in the meantime went up 16, 17-fold from its peak so i think it's hard for investors to say this caused real damages if they were being whip sawed by their own day trades i don't think it's going to impact the stock that much sit a car companying it is rich, but i think this is the right outcome. >> carter 30rk seconds left. what do we think bottom in for tesla? >> it's just a big ricochet similar to nvidia, and declined similar to nvidia. at some point, and i think that point is here and now, you fade the ricochet i'm a tseller.

>> okay. tesla and elon musk not liable for securities fraud in that tweet case you can get more details about the verdict on cnbc.com. that does it for us here on "options action. we've got a mark that's all kinds of crazy keep i 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. wel welcome to a special miami edition of "mad money" coming to you from the amazing telemundo center other people want to make friends, i'm trying to make you money. my job is to educate, teach, call me 800-743-cnbc tweet me