but she's definitely in that category. ♪♪ . right now on options action, two different takes on consumer discretionary sending, which will prevail. with earnings season in full swing we've hit a double for you. disney and nvidia. one's in the middle of a kocornr office shakeup, the other is way up, to the tune of around 50%. and kevin kelly joins us with a post earnings play on a winning bio tech name. i'm dominic chu. this is options action live from the nasdaq market side from times square in new york city. on the desk tonight, mike co,

carter worth, and brian substitute lan the groundhog says we're getting six more weeks of winter, check out the names on deck to report results. paypal, disney, uber, pepsi co all ready to deliver results next week. let's drill down on what we can expect out of some of those stocks we'll kick it off with uber. it's been a five-star rating start for the year for the ridesharing stock, shares up more than 30%. so mike co, what do you think about uber >> yeah, i mean, obviously it's been a spectacular beginning to the year, it's been a big run we've seen this week it's up 7% or so just since wednesday. the options market right now is implying a move of about 11% by the end of next week after they report earnings, a lot of flow we awe on the options market this week was bullish. the biggest coming in the weekly 2 1/2 calls that expire at the end of next week nearly 8,000 of these, the buyer

paid about $1.18 the stock's a little bit higher. if you're looking to play something similar go up a dollar or so in strikes, it seems like the flow is bullar. >> the flow is bull herb carter worth, what do you think? >> i don't think you could find a better chart this is a stock that bottomed before the market. and never made an october low. and what we know is, while that low was 20, we have moved above the well-defined down trend line in effect for the past year. i like it a lot. >> brian stutlan, what do you think? >> i think the keyword you see in that option flow is bought. we've been seeing buyers of all kinds of options all week long, people wanting to take shots to the upside or the downside the market has realized these moves. it absolutely makes sense this trader is trying to buy calls and play the upside. i know they're predicting a tremendous move in the options, are rather expensive but like carter mentions on this 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 pepsi co, shares down more than 6%. brian, what's your take? this pepsi kco or consumer staples? >> when you talk about pepsi, there's a huge rotation from consumer staples to names like uber into consumer discretionary. here's a name that sort of, you know, struggled around and moved around a little bit of a range to start the year. it obviously hung in there terrific last year, and then inflationary environment, pepsi is good. maybe if we're coming out of here and the fed done raising rates people are taking shots on growth names and whatnot, so 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 pepsi co >> 24 times, not a real grower, currency head winds are starting to abate more recently as we've seen the dixie fall a little bit. it's not cheap

certainly it's not cheap 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. we saw a lot of puts going up to june purchased this week. >> broaden it out to larger groups here, transportation stocks climbing nearly 14% so far 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 industrials are up -- excuse me, 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, odfl being the big weight i think you fade it here it's just a little bit of too much of a good thing back to a difficult level. >> it's been a momentum trade for sure mike khouw, what do we think about the transports >> it's interesting we saw a lot

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

overextended here, those are sort of names where you can sort of buy this put, keep yourself hedge if you don't want to get out of these stocks and certainly pick up some cheap premiums, potentially, should we move back down lower on this side because this is certainly an area that seems a little bit overextended if you talk about, you know, iyt, very overweight, a lot of transportation, freight-type names if you're not very bullish on freight, which i'm not, then buying puts in certain names, aal being the airlines industry, probably makes sense. >> that etf is up 14% since the beginning of the year. finally, let's talk about retail, a number of names delivering results next week, matell, underarmor, tapestry, capri, they run the full gamut there across the sprekt rum. mike, what do you make of the group? >> as a group we saw bullish -- bearish flows, excuse me, the march 6660 put spread traded in size 10,000 block there. i think this is just basically a general sense that, you know, the numbers that we could be

getting out of them are a little bit disappointing. we're coming out of almost, you know, the helson days for retail we saw coming out of the pandemic, almost every retailer benefiting except maybe amazon if we think about it it does seem like the sentiment for the group going to these earnings are not positive. >> carter, what do we think about the charts on retail >> too hot, whether you look at it fundamentally or money flow, we've had a huge bounce, massive relative performance, you can see there on the chart, after bouncing off of trend, we're right back to a difficult level, similar to apple in that sense i would fade it here. >> all right, brian, what do we think? >> well, i think what's really interesting about the options trades that mike pointed out here is that it sort of captures a hedge against that 66 to 60 level that gap where it started to form a base and looks like it's breaking out. to me that's a great structure trade to put on as a hedge you've been along this stock sort of as it starts to bottom

here, buying a put spread to cover back in case it goes back down into that range makes a lot of sense the one thing that is bullish for xrt right now, though, it tends to weight a little towards midcap, not the super megalarge cap names, we tend to like that. we're in that macro environment where midcap range stocks are starting to take off, the market starts to move higher, those names are going to go, it's underweight, those kind of names, amazon only 1% weighting for example in this sector etf that's one positive. i like the structure of the put spread put on by whoever that retail trader was. >> lots of ground covered there. thanks for options action, check out our website and news letter for sure, there's more options action coming up after this. coming up, an earnings two-fer, one now, and one for later. first up, disney on deck, next week for the big change in returning ceo bob iger and then nvidia is already up 50% year to date

and it doesn't report for a another 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 at "options action," if it's nice, we'll answer it on air when "options action" returns.

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earnings season is in full swing, there's a ton of big names on deck to report next week mike khouw's got a call of action on one name that could see some magic results across the wires, mike >> yeah, so we're taking a look at disney, of course you know, this is an interesting situation. this name is, you know, it fell nearly 60% from the peak to the trough and even net of the big upswing we've seen recently, it's still down about 45% from those all-time highs that we saw about a year ago now, when we're looking at the earnings right now the options market implying a move of just under 6% by the end of next week and of course there's a lot of things going on over there we've seen the return of bob iger, obviously a little bit of trouble in the management c sweet there, and on top of that we've got the peltz family in there kicking around trying to get a board seat we have a little bit of activist activity going on. now disney's prime property has always been espn

now, that does need to adapt a little bit to a streaming universe but i still think that's a great property. and very importantly, their parks business right now is doing quite well on evaluation basis if they can get back not even to their peak eps, which was about $7 a few years ago, but back to 6, this is a name you could potentially own. however, i do think the way you want to do that is with calls. we did see some activity here. i was looking out to april, the 120 calls, as a potential way to play for some upside you're risking a relatively small percentage of the current stock price to make a bullish bet that will carry you well through earnings. >> all right, the 120 call is what we're looking at right now mike khouw on the screen, you pay 375 in premiums. this is the kind of trade you're saving on buying a call. brian. is the call option the way to go >> like i mentioned top of the show, i'm a buyer of options right now, the level of movement weave seen in the stock market, in individual names warrants

owning options rather than being a seller especially in areas such as consumer discretionary, or a telecom type name such as disney it's had such a wild move. but that's been the momentum trade. you look at all the telecom stiep stocks and streaming type stocks, they've had a huge move to the upside and taking a shot with the call that it continues is kind of interesting to me, i think it's a name that you can sort of carve out of that consumer discretionary, like i said, or telecom space rather than buying etf, this is one name to add to the portfolio see how earnings plays out i like the trade. >> let's turn to semiconductors, brian is laying out a way to play a chip stock ahead of earnings this month. brian, which name are you looking at >> well, nvidia is a name that's been on fire i mean, the stock is up, you know, 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. when you look at nvidia compared

to the rest of cryptocurrency, this is an interesting take here, it's moved lockstep with crypto and sort of after the whole ftx shakeout we've seen crypto sort of bottom and turn higher. a lot of nvidia chips are in the mining components and stuff like that that's maybe why these two things move together it's had such a huge run it might be time to buy a put here and hedge the position i think some puts are cheap enough earnings at the end of the month, at the end of february i'm looking at the february 24, for this option, paying $7 for this to break even, $193 on the downside, you're only risking $7 here as a max loss if you've been long in the stock, which i have for clients, staying hedge at this point, it's moving significantly higher based on earnings or it's going to retrace steps back down to the 190 level. i'd want to use a put to protect myself on the downside. >> carter worth, what do the charts tell you, is this the way to do this, are we expecting

downside for nvidia? >> i'm in the retrace camp, just as you heard there so we 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 21219, take action if you're long, take measures. coming up, a bio tech bet coming up, our next guest has a way to play the pharma name on the back of earnings, trade when "options action" returns after this break, back in two minutes. >> announcer: "options action" is sponsored by think or swim, by td ameritrade wn but that's oy an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that?

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one of the reasons why is the implied move today was actually 3.25%, when it was actually up 4.25%. if you take a step back and figure out why it's because you've got a company that beat, and raised off of earnings. so on the top line, you know, they actually, if you take out their covid antibody they were up 17% on revenues year over year then their earnings were actually up about 20%. so you've got great growth in the name, and it's only trading at 18.5 times earnings so going forward this company has a great pipeline they've got three stable drugs right now that are growing, and then they've got a deep pipeline then they have a catalyst in late august this year where they could get another approval through the fda for one of their current in place drugs so if you take a look at the stock, it's a great stock technically. it's trading above its 50-day, 100-day, 200-day you look at it, it's sitting

all-time highs and 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 to cost you $30. you can make 2.3 times the amount of capital you have, and it only costs you about 3.8% of the actual share price so vol is about 27 right here, and the action today in the options market was actually over three times the amount of calls versus put we think it's a great way to play earnings going forward in a

great company with a proven track record and great management team. >> kevin kelly with the latest there from kelly intelligence and the trade on regeneron, thank you very much. mike khouw, let's talk about your trade this is -- it seems very risk-defined, very kind of controllable is this the way to play regeneron? >> it's interesting, something brian said earlier in the show is that he finds that options are very reasonably priced here. in an environment like that, i think even just going out and buying longer dated calls would be a fine way to play it as kevin was pointing out this is definitely growth at a reasonable price i don't expect the kind of growth we've seen in the company's history. the company has doubled eps over the course of the last five years. it doesn't need to do that to be justifiable on the long side i think another reason why he's looking at a call spread is in terms of how much capital you're outlaying, not relative to the, you know, the price of the stock necessarily, but just in terms of the fact that each share is a very high dollar price so any options contract that costs over $50, you're looking

at over $5,000 in premium. so this is a way that you can kind of cap that outlay. but i wouldn't mind buying calls outright either as a way to play it on the long side if i had the capital to deploy there. >> calls, spreads or calls outright carter braxton worth, what do we think about the charts there, is region ron due for a move higher >> you heard it. it's correlation, and relative strength, making new 52-week highs. it's been a real lagger that's coming back to life. regeneron's relative performance through the s&p 500 peaked eight years ago in 2015. it's been on the mend since, absolute and relative. you see the chart there, just up and to the right, north by northeast, what's not to like? >> all right, north by northeast is a chart a lot of bulls do like hold it there, gentlemen, by the way we have a verdict that has been reached in the tesla shareholder trial versus elon musk we will bring it to you by the way as soon as we have what the

actual verdict is. but again, the verdict is in we're waiting on what the result is. up next on the show, your tweets and the final call as well keep it right here >> announcer: "options action" is sponsored by thinkorswim by td ameritrade. 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, breaking news on that tesla trial verdict we lon musk phil lebeau has the details, what can you tell us dom, it is a victory for elon musk. the jury has found he is not liable for the statements that were -- that he tweeted out when he said he was considering taking tesla private at $420 a share, and the jury has 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, well surely they will say he's responsible for what he tweeted out, and he's responsible for any damages the shareholders claim that he 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 of him, that he's not liable for any damages to shareholders who believe that he should have paid money to them for damages that they say they suffered after the shares immediately popped up and then they came back down so a victory for elon musk this afternoon. dom, back to you. >> phil lebeau, again, tesla and elon musk not liable, not liable in securities fraud over the case of that funding secure tweet, thank you very much, we'll see you later on. mike khouw, let's go to you on this one. i'm watching the after hours action in tesla. let's caveat this, this is a friday afternoon, pushing onto 6:00 p.m. we're not going to see a lot of activity. it's up fractionally right now what does this mean for tesla stock in your mind >> i mean, i don't think it's going to make that much of a difference for tesla stock i mean, this was really about

elon and 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 of years had you owned the stock. regardless of what happened in the meantime it went up about 16, 17 fold to its peak from that 2018 time frame when that tweet took place. so i think it's hard for investors to say that this caused real damages if they were being whipsawed by their own day trades i don't think it's going to impact the stock that much at $600 billion in valuation, it is a car company, it is a little bit rich but i do think this is the right outcome. >> carter, 30 seconds, do we think the bottom is in for tesla? >> it's a big ricochet, similar to nvidia, 100% move off its low and decline similar to nvidia on the way down you fade the ricochet, i'm a seller. >> okay, tesla and elon musk, not liable for securities fund in that funding secure tweet case get more details about the verdict on cnbc.com.

that does it for us here on "options action," we've got a market that's all kinds of crazy these days let's keep it right here you've got ""mad money"" with jim cramer, tarstarting right nw >> announcer: this is a paid advertisement for csn. >> you know, usually by this time in the silver eagle cycle, which is just right at the very end here of our pre-sale, if you will, i have a pretty good idea what is going on, what was going on. but what i can tell you is, is 2023 has surprised us unlike anything i've seen in years and years and years. we assume this would, of course,