right now on "o.a.", the sil silicon valley bank failure. tonight we'll look at how the options market is pricing the action and what it's signaling for big banks the broad market and a lot more. plus, an economic bellwether reporting next week. fedex has had a strong run so far this year, but can it keep delivering as the consumer shows sign of slowing down the semis have been highway good place to hunk you are down. i'm sarahizen in for melissa

lee. on the desk tonight, mike khouw, brian stutland, and tim seymour. first, a news alert. layoffs at meta. julia, what do we know >> whoops. so sorry, sarah. here's what i got for you. meta is declining to comment "the wall street journal" is reporting that there could be another series of layoffs that would match the layoffs down by meta last year last year they laid off about 13% of their employees that was 11,000 people at the time "the wall street journal" saying this could be several rounds of layoffs that would accomplish a meaningful number of employees dropped in the same range as what they saw last year. in terms of what types of employees could be fired, it could be people in the category around wearables, which are certainly not in the core meta business, which is about advertising. also about how these would be nonengineering roles, people in the area of marketing and the

likes. we got a no comment from meta. the last time there were these layoffs there was a big headline in the "wall street journal" sunday and layoffs are on a wednesday, so we'll see if it follows in a similar cadence back over to you. >> julia, thank you. meta getting a mini pop after hours, over 1% as perverse as it is, the market likes the cost cuts and layoff, especially from a company like meta. >> you're hitting it right on the head there, because of course one of the big criticisms for meta has been the massive investment they were making in the meta verse zuckerberg indicated a pretty strong -- with the prior layoffs. it's interesting of course because this is a company that could probably afford to keep all of those employees in any case, they still have significant free cash flow meta, the employee base of

86,000 employees this is just an aggressive move and i think they're trying to send a signal. i saw it reported earlier this week that one of the things that zuckerberg was trying to get ahead of was he wanted to be on site when the layoffs are announced and he's going to be leaving for paternity leave soon, and i think this is trying to take ownership of that, and i think he has been doing it, at least over the last two reported quarters. >> brian, meta's already had a nice run so far this year, and partly on the thesis they're trimming costs and getting more efficient. the year of efficiency as mark zuckerberg said. do you continue to buy it? >> well, it's an interesting play here for one reason, and it's a top holding in the nasdaq we see nasdaq names -- are not going to go above 4% it's like all of a sudden, hey, we can borrow money cheap again, we can -- the dollar might weaken also, which helps some of these large mega cap names, and

meta's been a beneficiary of that that's a name you talk about microsoft, google, meta, these kinds of names are going to do well in an environment where the ten-year note stabilizes, and what's going on in the banking crisis, it's going to pull everything else down wit nasdaq names might be back in favor. that's the rotation we have been seeing all year. >> at some point the tech names are going to factor into the data. >> they will, and at some point that's going to be good news quickly on meta, which is up 103% since october, this is a cash flow machine, and when you remove expenses, it's even more of a cash flow machine last earnings, they talk about giving more capital back to national securitiers this is a sfwtock and a chart yu want to stay in. >> let's talk about the broader market stocks plummeting at silicon valley bank, the 16th largest in the country shuts down it is now the biggest bank

failure since the global financial crisis sending shock wave throughout the market s&p 500 dropping 1.5%. barely positive for the year dow following 340 points renale banks getting swept up in the silicon valley saga with the kre lose another 4% plus today and for the week down 16%, worst since march 2020, depths of the pandemic mike, how much more options activity did we see this week in regionals compared to what you would normally see >> the multiples are almost hard to get your arms around, because they really are just that big. and really, people are betting in directions. so, you know, a more regional bank to where i currently am, which is first republic, this one saw huge volumes, and it was a lot of put activity. traded more than 0 times its daily options value yum today, and was mostly short dated put

buying i think some of this is a little bit overblown, and we are seeing evidence of that in other names like zion bank corps saw 30 times its average daily volume, but there people were betting the washout you saw in the shares were actually overdone and they're not likely to get swept up in this, so a lot of that was call buying key corps saw huge volumes and also packed west seems where we're seeing the bearish activity is very closely related to the proximity of the bank so san hill road. seem like people think this is going to impact superregional, superregional problem to silicon valley but my instsuspicion is this ist going to impact other banks. this is probably going to be contained to silicon valley. >> brian, do you agree >> we have seen activity put

options in the kre that exploded an enormous interest on the downside, and sometimes we don't know where this volatility or where this contagious is going to end mike makes good points, maybe it's located to one specific area of the country, a couple banks around that area that were involved in it so hopefully this gets contained. but when you look at the markets and level of volatility and the trading that went on, this is similar to bear sterns 2008. that occurred march 10th as well bear sterns. saw massive sell-off in the market got a little bit of a rally back a few days later, mar 16, 2008, bear sterns taken urn. then things started to rally again. we'll see if that place out. if some of the bigger banks come in and take bad debt off the table, which i'm hearing talks they are out there, i think that's why the j.p. morgans of the world did it so well to mid region banks because they're out there to looking to scoop some of this stuff up and turn things around.

we'll see if that's a factor next week once there is this washout. >> i think mike wants to, what, disagree >> bear sterns start at 2 bucks and went to 10 it was a lot of pressure when they announced the takeout back in the day, and eventually ended up raising that bid. of course the contagion fear is if people get concerned about regional banks and say, i'd rather be at j.p. morgan or citi bank or bank of america and are looking for a money center bank, that of course is exposure any regional bank could face, but i don't think they face the same problems silicon valley did. >> we had a 4.5% peak to trough move this tells you i think where the psychology of the market changes. but i think we're all pointing out, the trading ranges to the stocks, markets aren't going straight down, and i think we're going to have a fresh air once we get through next week

there's a lot going on out here that i think can also give people a slightly different sense of how the fed has to be, and again, the exetent of the damage. >> even if we get a hot inflation print next week? i still don't think they can go 50. >> i don't think they can go 50 either i think we're going to get more data, and that's part of what's going to help the market. >> you mention the volatility. huge move in the volatility index. the vix surging up 40% for the week what do you make of that move? >> what's interesting is a vix level at 25% probably represents average daily moves in the s&p implied by the options mark of about 20%, annualize so we're looking at 1.25% per trading day. i think we did see levels that high last year i mean, we could two a little bit higher here.

it wouldn't surprise me if we tick up to the level of 30 or so, which is basically where we got last year. my thinking is we're not going to be seeing that day-to-day volatility at least i certainly hope we won't day in day out 1.25 moves every day on average would be very high that's what the vix is implying and i think that's too high, frankly. >> brian, what do you make of this level on the vix? >> there is some data behind that we saw march 30 call sellers today, actually, as the morning transitioned into noontime 18,000 march 30 calls traded that was a seller. maybe that was somebody taking off calls they were once long. but basically that trader is saying, hey, the vix is not going to get above $30 by, call it a week and a half really when those things expire. maybe the level of volatility simmers down we'll see what happens mike makes a great point 1.5%, 1.25% moves in the market

is going to be enormous. people will feel that shock. but as we see bank contagion happens, there's a snowball effect that trickles into credit. once credit starts having wishy washy deterioration that goes into the market and it's not uncommon to see the vix spike to 30 in these scenarios. got a little taste earlier today. maybe it cons next week after we get a rally. all right, still to come, we're going to turn to the health of the consumer and transports because we've got two big earnings reports next week, nike and fedex we'll set the table with our traders. and for everything "options action," be sure to check out our website and newsletter more "options action" coming for you after this

our own deirdre bosa has reporting on the silicon value bay bank collapse. just keeps coming. what have you learned? >> focus today has been on private cash burnings. public companies, they're affected too, like roku, which you just spoke about vil convalley bank has been so intertwined. i'm hearing there are likely more public companies to come out and say they have cash there or don't to reassure customers more questions than answers now. i have been on the phone with founders in tech they're all wondering how much

money they're going receive monday and will they be made whole eventually urgent for cash burning startups who weren't able to get their money out and have bills to pay. i just spoke to sunny singh, he dodged a bullet by waiting but now in a tough position because he faces uncertainty, percolating through the tech ecosystem. >> we started to issue employment letter tos start paying people and set up payroll, so that's all going to be delayed and finding an office is going to be delayed depending how quickly we can onboard this new bank which for a crypto company can take one day to three months. puts everything in jeopardy. >> he is not alone he says he's in a track meet with many other founders and they use ripplierippling. i cannot overstate how intertwined this bank is in the system that we're only seeing

the beginnings of this ripple effect throughout tech. >> i wonder if we're going to see startup failure as well. deirdre, thank you as we mentioned, we hit roku, bertha coomes has been tackling that angle who else >> sofi for one is saying they do not have assets with silicon valley bank, however, it does have a $40 million lending facility which is unaffected by the fdic's receivership. meantime, rocket lab says it has approximately $38 million with the silicon valley bank. that amounts to nearly 8% of the company's cash and cash equivalents and marketable securities and roblox coming out saying it has $3 billion of cash and cash securities as of february 28, 2023

about 5% a that is held at silicon valley bank. the company says thus, regardless of the ultimate outcome and the timing, this situation will have no impact on the day-to-day operations of the com company. i am sure we're going to continue to hear these, because they want to reassure investors they aren't affected by this. >> yeah, don't want to put their name with svb, but want to assure that. bertha, thank you. a bit of a theme with the companies that banked with svb. >> when this goes down, you look at the other companies that have exposure to me this is a -- maybe unrelated to svb, and so fi is one of them. they use fair market accounting rather than using loans. j.p. morgan had a note where they talk about discount rate assumptions are not keeping pace with interest rate rises so again, are they marking to

market this was a big issue for svb they had to ma, to market because they had to take losses to meet a liquidity runs sofi is a fin tech company but has if anything more exposure to consumers and part of the lending world that i think could be under more pressure that's the kind of story today that's tomorrow's story. i'm not saying sofi is anything close. my point is simply to say you have to look at how companies areal extraing their assets, what their books look like. >> yeah, liquidity issues are roaring back here. we're going to continue to follow the story for you breaking news. more "options action" right after the break.

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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 to "options action." shares of nike virtually flat for the year, and with earnings on the horizon, mike khouw has the bull and bear take on the name mike >> yeah, so this is a stock that we actually own. i mean, it's growing at probably

7% to 12% annualized looking at that through 2025, they're performing on the digital side, probably reaching 60% of sales by 2025, and are executing in terms of speed to market and have an upside opportunity it's trading 32 times forward, high beta name in a rough environmenting and right now the options market is implying a above average move, and the implied volatility with the rest of the market at a short end curve. to me the way to take advantage is with a diagonal call spread march 24 april regular diagonal call spread. buying the regulars of april, selling in march 24th expiration, the idea taking advantage of the elevated short volatility that we see as a result of earnings, but getting to own basically, you know, just out of the money upside call. >> love a diagonal call spread >> and you don't love me for

being -- i actually have a short position in nike. >> you said it last time and i challenged you. >> it's un-american. but when it trades -- low p.e. over the last five years, do you think this is an environment where it should be doing that? this is best of breed. let's be clear some of the data on inbound digital shows momentum, and i think it's actually some conservative estimates out there for them this is a multiple story this is where eps is going the mid single digits eps through '25, i don't know. i think you just -- this does not get away from you on the upside i think is part of my call, and i think it's expensive. >> in nike to microsoft, shares down, but brian's got a way to play the tech stock. if you think a turn could be in the works, what do you do? >> if ten-year interest rates stay cheap, dollar weakens, this has played well in the past for the microsoft. here's a stock that's pulled

back there's been a huge rotation things like smh, they've stayed in there, hung in the game, and they tend to be a leading indicator to the nasdaq. microsoft moves so much like the nasdaq there's an options trade i like that would play all the way through the next earnings. i'm taking a look at may options and selling the downside put at a level that's basically 50% retracement from covid low to high in 2023 that 235 put if i sell that for $7.75 i use the proceeds to buy the may 265 call net net i'm going collect a quarter. if we get a lot of volatility back and forth in the marketplace, i'm going collect income i'm not having to own microsoft until it gets below 235. and if we get any sort of rally, nasdaq like we saw to start the year, i get to participate to the upside with unlimited upside, so i like the play the way it's structured out through may. >> got it.

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good luck. 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. as we wrap up a huge week, let's look at how to play ahead. we're talking safety, protection mike, kick us off. >> i own the $39.50 puts and you got to spread those. i think that's what you're looking at payoffs at 2 two 1. you can't buy insurance when the house is on fire it's the worst disaster protection you're seeking at this point. >> brian >> yeah, i tend to look when we play for clients to vi dprks futures. we hold 9 to 1 ratio stocks against those. mike at the top of the show,

maybe the vix doesn't hang around 25, but i can't imagine it doesn't test the levels we saw intraday if there's a pull back in vix, because i think we get a retest in the upper 20s for the futures. as we go into march, we have a cpi number, fed meeting on futures rate that's going to maintain volatility. >> are you going with the dollar >> the dollar is i think your friend right now, so i think after a 4.5% rally on the dollar today, as the fed you're saying no way on 50 i agree with that. i also think buying international div companies, finding these companies -- because i think the dollar is your tail wind after that having been a head wind for 18 months. >> if you're buying the dollar for safety, things are not going

well. >> i agree we're not at that stage. may get there. >> thank you very much for joining me tonight that's going to do it for us on "options action. reminder, we're back next friday, 5:30 p.m. eastern time as always. mad money with jim cramer starts now. my mission is simple, to make you money i'm here to level the playing field for all icnvestors there's always a bull market somewhere and i promise to help you find it. mat money starts now hey, i'm cramer. welcome to mad"mad money." welcome to cramerica other people want to make friends, i'm trying to save you money. my job is to put crazy days like today into context call me 800-743-cnbc or tweet m