♪♪ test right now on oa, the silicon valley bank failure spiking volatility, how the options market is pricing the action, a broad market and a lot more. plus, fedex has had a strong run so far this year, but can it keep delivering as the consumer shows signs of slowing down. later, not all doom and gloom, the semis, a safe place to hide out this year, i'm sara eisen, in for melissa lee.

on the desk tonight, mike khouw, brian stutland, and tim seymour joining us, but first, news alert, layoffs at meta, julia boorstin with the details. what do we know? >> so sorry, sara, here's what i got for you. meta is declining to comment but "the wall street journal" is reporting that there could be another series of layoffs that would match the layoffs done by meta last year, last year they laid off about 13% of employees. 11,000 at the time "the wall street journal" saying there could be several rounds of layoffs to accomplish a meaningful number of employees dropped in the same range is 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. a lot of conversation about how these would be non-engineering roles, people in areas such as marketing and the likes. no comment from meta

i would note that the last time there were these layoffs there was a big headline in the "wall street journal" on a sunday and the layoffs were on a wednesday. we'll see if it follows a similar cadence. back over to you. >> julia, thank you. meta getting a mini pop after hours here, almost 1%. mike, as perverse as it is -- the market likes the cut, likes the cost cuts and the layoffs, especially from a company like meta >> well, you're hitting it on the head there, of course one of the big criticisms for meta has been the massive investment that they had been making in the metaverse and they really felt like zuckerberg's strategy was a little bit misguided you know, he indicated a pretty strong pivot with the prior set of layoffs it's interesting because this is a company that could probably afford to keep all those employees. in any case they still have significant good free cash flow, even with an employee base of 86,000 employees this is just an aggressive move,

i think they're trying to send a signal you know, i saw it reported earlier this week that one of the things that zuckerberg was trying to get ahead of is that he wanted to be on site, essentially, when the layoffs are announced and he's going to be leaving for paternity leave soon i think this is just basically trying to take ownership of that i think he has been doing that, at least over the last two reported quarters. >> brian, meta's already had a nice run this year, partly on a thesis they are trimming costs and getting more efficient, the year of efficiency as mark zuckerberg said. do you buy it? >> well, it's an interesting play here for one reason it's a top holding in the nasdaq what we've seen is nasdaq type names have done very well as soon as the market feels like the ten-year note and interest rates are not going to go above 4% all the 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 has been a beneficiary of that that's a name you talk about microsoft, apple, google, meta, these kind of names are going to do very well in an environment where this ten-year note stabilizes. with what's going on with banking prices it's going to follow everything else down with it nasdaq rogue names might be in favor, the rotation we've seen all year >> at some point the tech layoffs will affect the macro data haven't seen it yet. >> it will we have a three-month average of 350,000 jobs quickly on meta, up 103% since october. this is a cash flow machine. when you remove expenses it's even more of a cash flow machine. their last earnings they talked about giving more capital back to investors this to me is a stock and a chart you want to stay in. >> good news, up 2% after hours. let's talk about the broader markets, stocks plummeting today as silicon valley bank, the 16th largest in the country shuts down

it is now the biggest bank failure since the global financial crisis the fallout sending shock waves throughout the broader market. the s&p 500 dropping nearly 1.5% it's now barely positive for the year the dow falling 305 points and looking in its worst performance since june regional banks getting swept up in the saga with the kre losing another 4% plus today and for the week down 16%, worst since march 2020 depths of the pandemic so mike, how much more options activity did we see this week in regionals compared to what you would normally see >> i mean, the multiples are almost hard to get your arms around because they really are just that big. and really, you know, people are betting in both directions a more regional bank to where i currently am, which is first republic, you know this one saw a huge volume, and it was a lot of put activity. traded more than 40 times its average daily options volume today.

mostly short-dated, put buying i think some of this is a little bit overblown, and we are seeing evidence of that in some of the other names like zion bank saw 30 times its average daily volume there people were betting the washout that you saw in the shares were actually overdone and that they're not likely to get swept up a lot of that activity was call buying you know, key corp. was another one that saw huge volumes and also pac west. it seems that where we're seeing the bearish activity is very closely related to the proximity of the bank to sand hill road. it seems like people are thinking maybe this is going to basically impact really regional it's a super regional problem basically close to silicon valley but my suspicion is that this is not actually going to affect some of those other banks. i'm thinking that this is probably going to be contained to silicon valley bank corp. >> brian, do you agree >> well, i mean, we have seen activity also put options in the kre. that exploded enormous open

interest on the downside there sometimes we don't really know where some of this volatility or where it's going to end. mike makes good points maybe it's kind of located to one specific area of the country. a couple maybe banks around that area that were involved in it so hopefully this gets contained. but when you look at the markets and the level of volatility and the trading that went on this is very similar to bear stearns 2008 that actually occurred march 10th as well bear stearns that we saw massive selloff in the market then we got a little bit of a rally back a few days later, march 16th, 2008, bear stearns got taken under at $2 a share. then from there things started to rally again we'll see if that same thing plays out. if some of the bigger banks in the world come in and take some of this bad debt off the table, which i'm hearing talks that they are out there, i think that's why the jp morgans of the world did so well relative to some of these mid-regional type banks. they're out there looking to scoop some of this stuff up and turn things around we'll see if that's a factor next week once there's a

washout. >> i think mike wants to -- i don't know, what, disagree go ahead >> bear stearns started at $2, and went to 10 there was a lot of pressure when they announced that takeover of bear back in the day and they ended up raising that bid. of course the contagion fear is if people get concerned about regional banks in general and say i'd rather be at jp morgan or citi bank or bank of americ and they're looking for a money center bank that of course is exposure that any regional bank could face i don't think they face the same kind of real problems that silicon valley did >> a couple quick things this is a -- we had 4.3% interday peak to trough move in the s&p and two-day biggest move in the vic since jan of '22. this tells you where the psychology of the market changes. markets aren't going straight down we're going to have a breath of fresh air once we get through next week. we have a cpi number the

following week a fed there's a lot going on here to give people a sense of how aggressive the fed has to be and the extent of the damage and it -- you know, bear stearns was a case when -- >> even if we get a hot inflation print next week i still don't think they can go -- >> i don't think they can go 50 either we're going to get more data that's part of what's going to help the market. >> you mentioned the volatility, huge move in the volatility index as the market digested the svb fallout. the vix surging up 10% now 4% for the week, mike, what do you make of that move >> what's interesting is that vix level at 25% probably represents average daily moves in the s&p implied by the options market of about 20%. so annualized. we're looking at 1.25% per trading day. and, you know, i think we did see levels that high last year i mean, we could go a little bit higher here. it wouldn't surprise me if we ticked up to the level of around 30 or so, which is basically

where we got last year but my thinking is that we're probably not going to be seeing that kind of day-to-day volatility, at least i certainly hope we won't, day in and day out. 1.25% moves every single day on average would be very high that's what the vix is implying right now, and i think that's a little bit too high frankly. >> brian, what do you make of this level on the vix? >> yeah, i mean there is some data behind that we looked at -- we saw march 30 calls, sellers actually today as the move -- the morning transition into noontime, 18,000 march 30 calls traded. that was a seller there. maybe somebody taking off calls that were once long. the trader is saying the vix is not going to get above $30, or 30 points i should say by call it a week and a half, really, when those things expire so maybe the level of volatility simmers down and we'll see what happens mike makes a great point 1.5, 1.25% moves, daily moves in the market is going to be enormous people will feel that shock. but as we see bank contagion

happens, what happens is there's a snowball effect. that trickles into credit. once credit starts having wishy-washy deterioration, that trickles into the stock market and it's not uncommon to see the vix spike to 30 and these sort of scenarios you've got to be careful, a little taste of it earlier today. maybe that continues next week after we get a rally or some sort of relief 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's "options action," be sure to check out our website and our newsletter, we've got more "options action" coming for you right after this >> announcer: 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. >> announcer: "options action" is sponsored by thinkorswim, by td ameritrade.

our own deirdre bosa has fresh reporting on the silicon valley bank collapse deirdre, just keeps coming what have you learned? >> keeps coming. the focus today has been mostly on private cash burning start-ups. now we're finding out public companies are affected too, like roku, which you guys just spoke about. silicon valley bank was so

intertwined in the start-up and tech community it has held deposits for late-stage companies pre-ipo and i'm hearing there are more public companies to come out and say they still have cash there or that they don't to reassure investors. more questions than answers for now. i've been on the phone all day with founders in investors and tech, all wondering what's next, how much money will they receive monday and will they be made whole eventually cash burning start-ups, not able to get their money out in time, and they now have bills to pay i spoke to someone who just raised his seed round. was about to deposit it in a newly opened account he dodged a bullet by waiting but now he's in a tough position because he faces more uncertainty, still percolating through the tech ecosystem. >> we've started to issue employment letters next week to start paying people and set up payroll and all that that's all going to be delayed and we hope -- it depends how quickly we can on board 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 chat group with others. they're worried about making payroll. they use the start-up rippling banks with -- i cannot overstate how intertwined this bank is in the system that we're only seeing the beginnings of this ripple effect throughout tech. >> and i wonder if we'll see start-up failures as well to that point deirdre, thank you more details on public companies as well have deposits at silicon valley bank as we mentioned we hit roku, bertha coombs has been tracking that angle. who else, bertha >> well, sofi technologies for one is saying they do not have assets with silicon valley bank. however, it does have approximately a $40 million lending facility, which is unaffected by the fdic's receivership meantime, rocket lab says it has approximately 38 million with silicon valley bank. that amounts to nearly 8% of the company's total cash, and cash equivalents, and marketable

securities as of december 31st roblox saying it has 3 billion of cash and cash securities as of february 28th, 2023 about 5% of that is held at sill von valley bank. 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 company. i am sure we're going to continue to hear these 8-ks, sara, because a lot of folks want to reassure investors they aren't affected by this. >> don't want to put their name with svb, but want to assure them bertha, thank you. bit of a theme there with the companies that banked with svb >> so when this kind of stuff goes down you look at companies that could have exposure to me this is a time to look at companies that have credit exposure, and unrelated to svb, and sofi is one of them.

i was doing some work on them earlier today. in fact, they use fair value accounting rather than holding reserves against loans jp morgan had a note out where they talk about their discount rate assumptions used to value their loan portfolio, not keeping rate -- keeping pace with interest rate rises so, again, are they marking to market big issue to svb, mark to market, they had to take losses because they had to meet a liquidity run. sofi is a fintech company but also more exposure to consumers, and parts possibly of a lending world that i think would be under more pressure. so that's the kind of story today that's tomorrow's story. i'm not saying sofi is anything close. >> no -- >> my point is simply to say you have to look at how companies are valuing their assets, what their books look like. >> liquidity issues are roaring back here. we're going to continue to follow the story for you more "options action" after a break. >> announcer: "options action" is sponsored by thinkorswim by td ameritrade. good luck.

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looking at that through 2025 really performing on the digital side, reaching 60% of sales by 2025 they really are executing in terms of speed to market they have an upside opportunity in the form of women's shoes and apparel. the thing is, it's trading 32 times forward and it's a high beta name in a rough environment. right now the options market is implying an above-average move of course the implied volatility rising along with the rest of the market short end of the curve to me the way to take advantage of that is with a diagonal call spread i was looking at a march 24th, april regular diagonal call spread, buying the 120s of april, selling 125 calls march 24th expiration. the idea here is taking advantage of that elevated short volatility we see as a result of earnings, but getting to own basically, you know, just out of the money, upside call. longer data. >> love a diagonal call spread >> you don't love me for being -- i have a short position in nike. >> you said it last time, and i

challenged you >> it's un-american. trading at 30% premium to 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, so let's be clear the data we've got on inbound digital shows momentum and i think it's actually probably 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 -- this did not get away from you on the upside is part of my call and i think it's expensive. >> from nike to microsoft, shares down nearly 6% over the past month brian's got the way to play the tech stock if you think a turn could be in the works here brian, what do you do >> we talked about it at the top of the show. 10-year interest rates stay cheap, done well in the past for microsoft, based on macro models, here's a stock that's

pulled back. there's been a huge rotation smh, though, semiconductors have been up, stayed in there kind of hung in the game so far this year, and they tend to be a leading indicator to the nasdaq. microsoft moves so much like the nasdaq option trade i really like that would play all the way through the next earnings. taking a look at may options and selling a downside put at a level that's basically the 50% retracement from covid low to high in 2022 that 235 put if i sell that for 775 i then use those proceeds to buy the may 265 call for 750 i'm going to collect a quarter here if nothing happens and we get this volatility back and forth in the marketplace i'm going to collect income i'm not having to own microsoft until it gets below 235. if we get any sort of rally, nasdaq rotation happens like we saw to start the year i get to participate to the upside with unlimited upside i like the trade the way it's structured and plays out now and through may. up next, as the market grapples with so much

uncertainty our traders will lay out ways to hide out from any coming storms when "options action" comes right back >> announcer: "options action" is sponsored by thinkorswim by td ameritrade. 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℠.

as we wrap up a huge week let's take a look at how to play the week ahead and how to keep your money well protected. we're talking safety protection here, mike, kick us off. >> yeah, so i own the 39.50 in the ftx, i spread those. that's what you want to look at. you're looking at payoffs of maybe 2.5, 3 to 1. it's the worst disaster protection you're seeking at this point >> brian >> yeah, i tend to look, and we play for clients through vix futures and spikes futures, we were owners of those this week we hold 9 to 1 ratio mike was right at the top of the show, maybe the vix doesn't hang around 25. i can't imagine it doesn't

retest the levels we saw intraday if there's other contagion effects. if there's a pullback in vix i want to be a buyer as a hedge against my stock portfolio or some risky asset we get a retest in the upper 20s for vix or spikes futures going into march expiration. cpi number, a fed meeting on march futures expiration date. that's going to maintain volatility in this marketplace over the next couple weeks >> you going with the dollar >> well, the dollar is, i think, your friend right now. so i think after a 4.5% rally on the dollar today was about, as the fed you're saying no way on 50, i agree with that. i also just think that buying international div paying companies that are actually high grade companies, i advise international etf strategy, finding these companies. the dollar is now your tailwind after having done that -- after having that been a headwind for almost 18 months. >> if you're buying the dollar for safety things are not going well >> i agree i think we're not at that stage.

we may get there >> all right, guys, thank you very much for joining me tonight. that's going to do it for us on "options action." we're back next friday for you, 5:30 p.m. eastern time as always "mad money" with jim cramer starts now eastern time as always. mad money starts now - [announcer] the following is a paid presentation for emeril's all new forever pans, sponsored by tristar products incorporated. - emeril lagasse here with the most innovative pans i've ever cooked with. they can sear like stainless, caramelize like cast iron, and they have a super non-stick surface that will never lose their non-stick coating. introducing my forever pans. - [announcer] forget about non-stick coatings that don't last. the problem is they have a single layer of non-stick that quickly wears away with everyday use. - the pans say non-stick and they work great in the beginning, but then as time goes on,