s. yet, his critics feel croman may resume business as usual. you think croman's going to stop being vicious and greedy? i don't think so. i don't think he's been converted. i've prayed for his conversion. [ laughing ] but i don't think it's going to happen. -- captions by vitac -- right now on "options action," the debate continues with the s&p versus the vix, which is at a more powerful inflection point then they say there are only two certainties in life, death and taxes. but we're certain we can help you with both with some intuition on intuit. plus, the energy sector, the fed, and the options market, how all three might be playing catch up with each other i'm melissa lee. this is "options lee." we have a full house let's check out some of the names seeing the most "options action" this week. among them, tesla, apple, amazon, microsoft, nvidia, and

meta and netflix some etfs lighting up the options pit. the qqq, ark, emerging markets and of course the spy. carter, yesterday on "fast money" we had a discussion about vollmer-geddon, but betwee the vix and the s&p, which do you think is at a more important technical level? >> i suppose the vix, if i had to pick. what we know is that vol -- as measured by the vix, anyway -- in the past ten years had its low at the end of 2017 and has been trending higher ever since. you can see it on the screen here we're down now to a level where it has rebounded quite consistently over the past five years. i think you get a rebound here do you get a concomitant selloff in the s&p that's the presumption >> michael, what's your take just refresh people's memories of this conversation we had, because i think it's an important one. there are a lot of heads being scratched out there in the investment community as to why

volatility seems so -- i don't want to say depressed -- but tame >> what's interesting is carter was just talking about that low end volatility you saw in 2017 there was an interesting dynamic going on at the time, because there had been a proliferation of products that encouraged volatility selling, and volatility is another way to think about insurance on the markets. that blew up in early 2018 that was the period that actually subsequently got called vol-mageddon now we have a slightly different dynamic, other products that are trading. that's basically the short dated options, zero days to expiration options have really taken off. in fact, they represent a significant portion of the options volume in products like spx each and every day this week was particularly interesting because four of the five days this week we saw call volumes in the vix that exceeded even the highest day all month in january we saw a purchase of 35,000

april 29/39 call spreads, a purchase of 50,000 of the may 50 calls, and then we saw a purchase of 100,000 of the june 30/40 call spreads so some big institutional bets on volatility rising i want to make an important point here because when you're looking at vix futures and future options, these don't behave exactly like stocks each of those futures trades independently. what you're seeing is the vix term structure spot is the spot vix and all the others are subsequent future you can see they're all higher but the important point i would make here is if spot vix rises, those don't necessarily rise quite as much or as quickly. in order to get the, let's say, june futures over 30, you would need to see spot vix move in the near term. either this is a longer term series of hedging bets on rising volatility or somebody's expecting something really big to blow up in the near term.

>> brian, you're a former vix trader what do you make of all this >> yeah, i mean, we used to have broker dealer, we used to trade major institutional orders against that and see a lot of that order flow. and one thing that becomes a concern here is you look at the vix over the last couple weeks, basically since february 2nd, the vix is up 12%. the market is unchanged. what's going on? hedgers are coming in here and buying vix, buying spx that tracks s.p.y., the same thing. it's starting to move up what we found when we see these bets on upside of call, we saw march 30 calls as well, not just the back ones, buyers on the upside, usually a volatility event is brewing remember, the vix is up about 30 in may of last year, and the market was basically around this level. so it's really gotten depressed and it's got tone a level carter points out that's interesting to buy. we buy them for clients.

we do that as a hedge against equities because when equities deteriorate, typically volatility explodes. if we're at this inflection point where volatility is going to move higher we're going to get serious downside in the market really got to watch yourself i don't know if vol-mageddon i due again, because it's hard for history to repeat itself, but likely an event is going to occur. >> and it's cheap now, so i would think buying insurance now would be very attractive. >> when you're looking at this upside stuff, typically you're looking at your at the money vol. that's what mike is speaking to. that's going to take you across the terms. but the other aspect is going to be skewed. when you're buying out of the money stuff, in term of vix, that's going to coincide as a selloff as brian mentioned or a flexing of those downside puts either one of those will lead to a profitable outcome for you so even if you start to see a range trading but in a more violent way, that downside protection, which is what

institutions are always short, will likely pay off. so that's another aspect to think of when you're looking at these upside calls >> let's get to nvidia up almost 50% year to date the latest report next week results in the most actively traded name in the options market carter, what does the chart look like >> right, so, i mean, a huge winner off its low, but therein lies the problem if the market is always looking ahead, if the stock price is trying to figure out three to six months out, how much of the coming news in the three to six months is priced in? i think a lot. for one, we've completed a well defined head and shoulders bottom you can see it there and we've retraced exactly half of the loss from the peak. i think it's rich, it's full, it's overdone, extended. whatever terminology one wants i'm a seller, not a buyer. >> mike, i could see you nod your head in agreement here. you'd do the same? >> yeah, i mean, you know, it's interesting. you take a look at the options flow, you mention there's a lot of it this week.

we did see bullish bets. we saw a purchase of the march 275 calls. buyer spend 900,000 bucks for over 4,000 of those. a bigger premium bet was on a shorter dated down side bet, the march 3 215 puts somebody laid out $1.3 million in premium vetting that nvidia going to roll over by march 3rd expiration seems that this trader is betting that the news is not going to be good and the stock is going to roll down over the next two weeks. >> another company slated to report next week, monster beverage stocks move year to date not all that startling carter, where is this one heading? >> i like monster. so, we have a circumstance of a perpetual long-term outperformer versus the s&p, or any aggregate you choose, that's basically finally toying with the prospects of breaking out from a dull period.

i think this is quite good i like it long into earnings >> mike? >> yeah, interesting here in monster is that where we are seeing bets on higher volatility in a lot of places, monster's volatility is actually 10% below the two-year average, so if you're inclined to take a bullish bet the way carter is recommending, i'd suggest going out, buying the april 110 calls. those cost about $2.10, so you're risking about 2% of the current stock price. this thing has had quite a run off of those march lows from '21. i think it's up over 40% since then maybe a relatively stable business, but i think you can use calls as a cheap way to play upside here. >> what's your take? >> the valuation is rich versus historicals, and i will say the back half calms are more challenging than the front half for the year so if i was, being that it has had an extended rally, if i was going to play for the upside, i'd do it via options. rather than owning the shares

outright >> for everything "options action" check out our website and sign up for our newsletter much more after this in case you missed its barrage of ads into and through the super bowl, intuit wants to remind you it's tax season we wish to remind you intuit is slated to report results next week how to address both profits and tax savings with options plus, calling all "options action" fans tweet us your ques question @optionsaction on air

welcome back to "options action." another week of earnings action coming up. grab your coffee mug, get ready for tax season, because mike is looking at two names to help you through the process. what's the first one >> yeah, the first one is intuit everybody's probably familiar with their tax software turbo tax. this is an interesting situation this one, because of course that portion of their business at least, one would think, would be resistant to changes in the economy, because taxes are inevitable however, they have two other aspects to their business, which maybe are not quite so resistant to an economic downturn, credit karma, which basically makes its money with people getting new credit cards

we have seen consumer revolving credit is back to all-time highs. combine that with the fact we see higher rates i'm not sure you're going to see a whole lot of new credit openings that could be a problem. quick books is focused on small business if we do see a economic slowdown that could be slow down. right now it's trading in theory about 26 times full year 2024 earnings estimates what i don't like about that is right now they're forecasting about a two-year double in eps and all time highs in margins, and i'm not sure they're necessarily going to achieve that in this particular case, the company seems a little bit rich to my eye. the earnings move is about in line i was just looking up to march, the 393/40 put spread. you could spend a little less than ten bucks for that. if you own the stock, inclined to hedge or inclined to make a bearish bet, might be the way to do it.

company seems a little rich here. >> yeah. what do you think, carter? >> well, a couple things this is the most epic -- since it's ipo, it has doubled the performance of microsoft going back to 1994, speaking of software now it is lagging. not only the market is lagging microsoft, this stock is over the past eight months where almost everything is up i think it breaks trend here i don't like it. i'm a seller >> bonawyn >> i'm not pumped about the s&p exposure, and if you look at the price action, which i think carter was alluding to, you see tech really start to catch a bid earlier in the year. price action has reveersed sharply from that $450 level let's get to another name. yeti reporting results after the bell thursday. mike, how are you playing this one? >> yeah, so yeti, this is one of the holly index names. much to my chagrin, everybody in my house wants to use yeti tumblers instead of glasses. and she doesn't like to put them this the dishwasher, that drives me nuts.

the products really are great. what's not been great historically is the price of the stocks but they have been growing nicely the stock prices come in, this thing is trading in the mid teens in terms of forward eps right now. so this is beginning to look attr attractive now, this is a name that moves around a decent bit on earnings and definitely did after the last one you'll notice if you take a look it got a huge pop after mid november, but the stock is at the exact same price options are expensive. here i like using a call spread risk reversal. the idea here is that if the stock does fall after earnings, i get to pick it up close to those pre-november earnings numbers, get participation to the upside. i was looking at the march 24th weekly, i should point out, because that's the one that has these specific strikes buying those 45 strike calls and selling the 33 puts and 50 against it to get to only 30 cent outlay in premium

>> carter, what does the chart look like? >> yeah, to put this in perspective, to think that yeti right now is trading exactly where it was before covid came it was a $40 stock it lost 60% of its value ran all the way up into $110, gave it all back, and now is basing and bottoming right at where it was before covid hit. is this business worth less or more than it was before covid hit? it's worth more. the pattern says it. it's bottoming out i'm a buyer. >> what do you think you strike me as a guy that has at least a yeti, one in your house. >> we have a handful of yetis. >> that's what i thought >> listen, i'm not super pumped up about exposure to the consumer, but i like this nearby niche. specialty niche market i like that under the backdrop of the consumer situation. i will remind traders you're going to have to be comfortable outlaying cash at that level

that's a 20% discount to current levels keep in mind you have proper margining or cash reserves in order to assume the shares. >> mike, you're not supposed to put insulated coffee mugs into the dishwasher, is your gripe you think it doesn't get clean by hand washing it >> i want to put them in the dishwasher holly tells me you're not supposed to. >> you're not supposed to. you ruin the cup. >> she makes a big fuss. what happens the sink fills up with these things if you have teenage boys using these things for orange juice, water, and everything else they carry you get a lot of them in the sink every single day. >> okay, got it a look into the khouw household. "options action" back in two "options action" is sponsored by thinkorswim, by td ameritrade td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only

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the numbers coming out recently lower than 2022, 2021. demand destruction couple that with builds and supply of both crude oil and gasoline supplies increasing. u.s. shell producers kicking in, increasing supplies. high supply, low demand. that says prices should go lower. that's going to affect peopl like exxon mobil, which we do own for clients. i do like the name but i may want to think about hedging that, and creating a trade that sort of hedges my stock position i can almost do a trade now that sets up well for march, the opposite of what mike said for yeti here i want to buy a put, buy the march 105 put, same time financing it for the 115/120 call spread. here i actually collect 20 cents. now i have this hedge on, play to the short side, basically, sell out of a stock position, play to the short side below 105. the call spread stops me out to the upside in case the market turns. but notice here i'm a net buyer of options

and the reason being, you talk about a bowling ball dropping in one part of the pool creating a ripple effect to the other, if the s&p is going to go to the down side like we talked about at the top of the hour, an volatility is getting ready to explode, option prices should increase as well i want to be a net owner of options, and by buying the put and selling the call spread, i can basically do that and play to the downside. sort of protect this stock position i've enjoyed to the upside for so long right now as things start to turn around here in the energy market >> mike, what's your take on this trade >> yeah, i mean, we have basically -- we're at the upper end of the five-year band for inventories and a lot of the products brian just mentioned, natural gas as well as the upper end of the five-year range commodity prices tend to move farther than you think they will i want to say it's tempting to get in here and reach a little bit for natural gas, but i think you have to actually see the proof in a reversal in prices. we haven't gotten that yet >> carter, you like exxon? >> well, it's all right.

i guess sort of low add, not exciting in terms of energy being down, we know it's coming off two of its best years on record, 2021, 2022, up 48 and some 59% respectfully so in and of itself, the xle on the screen there, pair of 2s, no real trade we like the service name, slumberger, haliburton, oah type stocks. >> bonawyn, how about you? >> i don't think i'm quite as bearish on energy. i understand the inventory builds, destruction and concern about the overall economy. i will say there's seemingly a floor to crude whether it should or should not be the case, you are seeing names trade in lock step with the underlying commodity if you look at the capital discipline of the companies they're much better run. i like the options trade, your net collecting premium and it's risk contained but i'm not quite

as bearish in terms of sentiment. >> mike, carter raised an interesting distinction between the integrated and services. you had your druthers, which would you pick here to initiate a position >> i don't need to talk about initiating one when i have one we're long marathon, haliburton, unfortunately were long devin. just to be fair on the bearish conversation, we are net long energy name, so it wouldn't be reasonable to call me completely bearish, i just don't see a lot of near term upside. up next, an update on a hospitality stock we discussed last week. plus we are taking your tweets "options action" back in two >> announcer: "options action" is sponsored by thinkorswim, by td ameritrade. 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.

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welcome back to "options action." airbnb surging more than 20% this week after a strong earnings beat. mike, you highlighted a big trade in this name just last week. >> yeah, i saw those big april 105 puts trading there was bearish sentiment last

week and right before earnings the short interested about 7%. the street hates it, 25 holds and sells versus 18 buys the stock obviously got a reversal of sentiment bounce coming out of earnings, but take a look at the way it behaved today. that doesn't look healthy to me. i'm not sure the bounce we saw this week can last. >> all right, time to get to some tweets. our first fan asks, a few weeks ago, carter worth charted tesla running to 170 plus, and after it overshot to 210 plus. today it trades around the 200 resistance support level where could it go from here? what do you think, carter? >> where could it go it could go anywhere could is not the word. here's the thing you won't find this but once in a lifetime a lot of stocks drop from 200 to 100, and then rally back from 100 to 200 or some derivative thereof, meaning dropping 50%, and recovering 100%. in a matter of weeks but not at this market cap it's virtually unprecedented

it's as hysterical on the way up as down. the buying is rash, impetuous, overdown just as selling was on the way down it leaves the stock at a difficult level. i'm a seller. >> our next tweet says work natural gas at lows how do you feel about calls for june 16 at the $5 strike? mike, what's your take on this one? >> these are triple decaying instruments because you've got a levered etf has rolled cost and high volatility, so i think that's an expensive way to play it i might go with ung instead. >> it is time now for the final call carter braxton worth, what do you say? >> vix for a bounce. market lower. >> brian stutland? >> volatility higher, but also check out exxon mobil, buying a put and selling a call spread. >> bonawyn. >> i think those upside calls in vix are definitely worth a look. >> mike, what you need to do is

only have one yeti cup per capita in your household and they have to be washed. that's my solution for you >> unfortunately we have way, way, more than that, and i like the stock, because of that, i think call spread risk reversals are the way to play it >> that does it for us on "options action. back next friday at 5:30 eastern time special right now with morgan brehmen. hi, my name is ty young and i'm the founder of ty j. young wealth management, and our firm has thousands of clients in all 50 states, and we manage over $1,000,000,000 in assets. and i say that to say this. we have been working with people just like you