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portfolio do do the same this is "options action. mike, carter, and brian. let's get to it. let's get to nvidia. a stunning earnings rally, the stock jumped up in the rankings to become the most heavily traded options name in nominal terms. it was already just one of the biggest over the last several months because of the more than 160% run year to date. here is kicker if you own the stock, there is a way to squeeze even more juice from the semi citrus fruit with options. mike, please explain, we often talk about selling covered calls and how it isn't typically advised to it that certainly woo certainly wouldn't have been in this case. this is not a stock i happen to own. we own several other semiconductor names and many traded up as basically a benefit i think from nypd's stellar performance here once that catalyst has come and

gone and in nypd'ondisclosure agreement -- nypd's case it has rallied to an extraordinary level, after that catalyst remains high, i was looking at this earlier today and the june 405 to 410 calls were about call it 2.5 to 3% of the current stock price. so if you are fortunate enough to hold this stock, now that that earnings catalyst has come and gone, this might be a good opportunity to sell some upside calls. i mean, you are yielding2.5, 3 over the course of three weeks if you sold those at those levels i saw today and you still have, you know, somewhere in the neighborhood of 8, 9% worth of upside the next three weeks. i don't know what will get it to go that much higher in such a short timeframe after we have had itthis big pop. >> carter, for those who didn't see "fast," what do you see in the charts here? when a stock makes such a big

jump, is it possible that they've entered sort of a new range higher >> sure. so if you think about any major re-rating, right, when a stock drops in caps 20% and fda miss, more people dying than living from the drug or pops like this up, it's a re-rating, the stock has been -- and rightly so, because of news, i think they had sales were 60% above in the quarter. the question is once you have been related, not 3% or 4%, but 25, you typically stop there when a stock drops and gaps that much or rises that much, it starts to churn. on an intermediate basis, and nvidia is where it was yesterday, yesterday it was the news, didn't do much today it's likely to be here for quite some time. many, many weeks at least. >> well, brian, a little bit of a different experience here. you laid out a trade on nvidia last week hedging for more moving the opposite direction. what are you doing now with that >> well, i think when we looked

at it, we laid out a trade, a put spread heading into earnings in case earnings wasn't that great and you would be protected to the downside. 1% of the value. stock during that time i like what mike's talking about on selling a call because ycan make back some of the premium loss by selling the call on the upside as long as you are willing to be above the 400 level. this is why we buy put spreads as protection into earnings events like this because i spent a little bit of money, i still got to hold my stock which we continue to hold for clients, still have that as part of the portfolio, we mentioned before last week that nvidia was my number three weighted stock if i had to pick a top 25 of nasdaq sort of related stocks and so this was a way to continue to hold the stock, a little bit of protection and play the upside. look, when they guided higher on the earnings, it wasn't like they guided a little higher for next year. they got it a lot higher i think this a.i. thing is real.

we joke about it, but it's sounding more and more real. that's why the market is moving more and more in that direction and why nvidia climbed so significant after earnings if you want to recoup some of the loss on the put spread, i still think there is a place here we are at critical levels, obviously, oversold, i know on "fast money" guys talking about overvaluations here, significant levels selling the call makes sense at these levels and continue to hold the stock. >> with the big move in individual semis there could be more room to run carter, it could continue the recent climb >> sure. a follow-on to money in motion from money the theme to be long semis relative to tech, semis have such a long way to go to catch up to both the market and to the overall tech sector let's look at a couple of charts we know that one week ago we are looking at a ratio chart here. one thing divided by another the tech sector's relative performance to the s&p, we not only got above the 2021 high, if

luke at the next chart, for the first time in 23 years tech has recouped all of its losses associated with the dot-com peak and is ahead of the market a for the first time but what you will see, of course, that semis, next chart, they are not even close. so the thinking, and that was the point of the report on monday, was that semis actually have catch-up potential to the market overall in terms of simply getting back to where they were on a relative basis. to the s&p. now, if you look at actually semis versus the qqq, this is the real stunner, and you can see it there, we are nowhere near the peak associated with the dot-com. semis were really the outperformer during the froth of '98-'99. semis can climb to get back to where the qqq was.

look at the semis overall on their own. this lines, no drawings, no annotations, no judgments. the first line to put in, a well defined bottom, breaking above second and final chart for the stocks we are in this channel which implies further upside to get to the upper band >> and you have a chart on cisco? carter >> yes i thought i'd stop there let's look at that as well two charts on cisco. since you raised it. and they are both the same timeframe. the first is using the moving average, 150 day to depict what it is, bearish to bullish. double back here and find laggards to the tech sector and play them. cisco with annotations has the elements that the semis had of a cup and handle, it's a reversal. but here is where you in a perfect world, i think you reduce some nvidia if you're so lucky to own it and put it in

something like cisco for a catch-up trade. >> mike, you got a trade on cisco? >> yeah. in our long only strategy we own a lot of chips as i mentioned before unfortunately, nvidia wasn't among them i actually wrote down the ones we hold here so i wouldn't leave anybody out. broadcom, analogue devices, applied materials, marvel, and we own cisco and i think of these, cisco is actually kind of the most interesting in a comparing and contrast basis relative to nvidia because cisco was the high flyer in the late '90s and 2000 that was a name that traded up to multiples not unlike nvidia today. i think it got up to 24 times sales, which is close to, i think, where nvidia is trading right now as of today's close. right now, though, this thing is trading about 13 times earnings. so this thing is actually cheap and is probably growing eps at 8 to 12% is that super, super sexy? well, maybe not super sexy, but

it's growing faster than the economy and it's quite cheap che already had earnings, are options. so i think the simple play here, and i realize a lot of people think that maybe this tech run is too far, too fast i think this is a relatively safe name to be in but you actually reduce your risk further by going out to july and buying very close to at the money call i was look at the july 50s those cost less than $1.50 less than 3% of the strike to make a bullish bet if we sew a reversal, if people start to basically fade this big rally, you are not risking that much if it continues, you will get to participate. >> brian, wdo you think of the trade? >> cisco i like. we have that as a leader in large cap value. there is a place in the fomc for it i think there is more upside mike spoke to the 13 multiple or so on cisco. i thinks there is more upside. given the cheapness and options that we're seeing, look, the vix down here below 20, spikes

around 18. the volatility in the options market is so cheap compared to what we saw, the move we saw in the market today even, you know, that can pay off very quickly for you. i think that's pretty cheap and you get a play to the upside up to that 59 level, that would be a nice price target to sort of sell a call and take profits and run on that. i think there is more upside for cisco. >> check out our website and newsletter for more. there is much more "options action" after this. coming up, an earnings season stretch of sorts. lululemon has lost about 8% in the last month, but with high-end consumers still spending could the stock pick its head up after reporting results next week? we're reaching for a rebound with options plus, calling all "options action" fan. reach into your pocket, grab your phone and tweet your question if it's nice, we'll answer it on air when "options action"

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welcome back to "options action." a short but big week of earnings on deck with retail stocks taking center stage. one of those names has seen shares go downward dog lately. mike, how are you playing lululemon? >> well, i mean, people who watch the show know that this is one of my holly index names. downward dog, it might be a little bit unfair. the stock is up 6% on the year certainly very recently it has been materially underperforming. now, just a couple of things about the company first.

number one, their demographic, they sell to a more affluent consumer my thinking is maybe we won't see as much pressure on the consumer side. they announced they are doing some hiring and any company doing some hiring i think that suggests that there is, you know, obviously, something positive going on. so i think that supports it. in terms of valuation, 25 times full year 2024 earnings if they hold to those numbers. if they improve on that, of course, when you see the recent performance going out and buying the stock if you don't own it already as i do, you might be a little bit concerned going into earnings we talked about not getting short options going into earnings rather getting long, although i was actually taking a look at doing both by purchasing a call spread. i was looking at the june 30 expiration, the 353.90 as you probably know, we often try to look for spreads where we can spend a little bit less than maybe 25% of the distance between strikes. we are fairly close to that. this is a $40 spread

spend $11.65 it's 340 bucks a share you can risk a little bit by buying premium hoping that it actually catches a bounce coming out of earnings. >> brian, what's your take on trade? >> maybe there is a catalyst in the earnings call that pushes it higher obviously, we talked about retailers lagging the rest of the market i am still kind of in that camp and, you know, lululemon, obviously, is a little bit higher-end specialty, workout wear, that people like to get into i kinda like nike better than the lululemon right now in terms it of valuation basis and playing to the upside on that. and so i might play more to the short side of this but given that, i like how mike is structuring the trade we talked about options. spending less than 25% of the distance of the strikes to do that that makes a lot of sense because you are not risking a lot to get an upside play on the stock if you play to the upside. i am a little gun shy on any sort of retailer now.

>> carter, how does this one look >> we have the circumstance where on the last earnings the 29th of march it's not gapped up, 12%. if we look at chart, we've given back that entire move. and so what you see here is a stock that is sold off to its rising 150-day moving average having gapped up initially response to earnings of course, we get earnings again shortly. my thinking is to play for a bounce off the 150-day moving average. >> another stock that bridges the main areas of retail, tech, and even the economy at large some might say amazon shares far outpacing the broader market, up 43% will the prime performance continue brian's got a trade. brian? >> i think if i am going to play retailers i will stay in the space of amazon. the reason is it's not all about retail i get a little retail exposure, which i can't have zero in my portfolio. and then also amazon you get the

cloud, you get maybe a.i. play amazon's always innovating in that sense amazon a big chunk of the nasdaq getting pulled with everything if the nasdaq continues to push through some of these key technical levels, i think there is room to the upside. however, i don't want to make a bet to all in on amazon. i own amazon for clients but i think options are laying out through july before its earnings catalyst event to sort of continue the play to the upside. what i would look to do is look at the july options right now. right after earnings, july 120 strike call i think is cheap enough to buy to the upside. reduce the cost by selling a put spread, selling the 105, 95 put spread collect a little bit of premium to lower the cost of the call. i am okay at the 105 level i think if there is a pull back in the nasdaq, tech, retailers, whatever, i can buy the stock and have the cash to cover that little area of $10 to the downside between the 105 and 95

strike but here i get to play the upside i am spending a net $6 in premium to play to the jupside, break even, 126. there is room to go. if the nasdaq goes, i participate. if retailers trn turn around a little bit, i get to participate there. it's a cheap way to play the upside. >> carter how does amazon look to you >> that's a bearish too bullish reversal of a stock that lagged and now is starting to only to life i'd rather have my money here, like a cisco than those steep, uncorrected and oh so loved. >> the carter stamp of approval, mike what are your thoughts on the trade? >> i like the put spread rather than outright put and in a risk reversal because while he could be putting the stock at 105, he is doing so in an insured way because he owns that still lower strike put to basically offer protection that basically limits the downside risk if things go really wrong something else i like about it, i mean on our side we use a.i. for data analysis.

it represents about 25% of our annual expenses and that's cloud-based plus computing through aws. they are collecting a lot of money from us. so i am sure they are from a lot of others as well. so that's a positive the only downside to amazon for my money is that on the retail side they really haven't delivered, even when retail was running hot, they didn't make any money in that. of course, now retail is weakening, it's got to affect them to some degree as well. >> all right up next, driving into ford as the automaker's team up with tesla, supercharged ways to play the name trstraight ahead "options action" back in two

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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." a very positive week the news the automakers teaming up with tesla to use the ev maker's plug technology, giving access to 12,000 super charging

stations across the u.s. how are you handling ford stock on this news mike, what do you think? >> ford was a long-term holding for me i blew out of it in april, and i think there is a positive development for ford whether or not we are going to see a whole lot more strength out of it, it's kind of hard to say. i mean, it seems like this as much a benefit for tesla as it is for ford, probably more so, actually my thinking is that if you're thinking about getting into it, maybe sell, you know, some close to at the money or slightly out of the money cash covered puts you know thrk is a name that has some implied to vol in it. you collect a little bit of yield by doing that. put the stock, own at a discount and therefore participate. i think we will have to turn to carter and see if this is the beginning of a new breakout because it's been in a prolonged down trend. >> there is the question, carter. >> so just to be clear, it's a bond, right? 5% yield ford motor today closed at

$12.90 february 2, 1987, it was $12.90, okay adjusted for inflation, you lost 85% of money but it paid a big dividend the time to buy ford is when it's the nvidia of its day when everybody has a horse and you have car, you are a.i., right? that's not what this company is anymore. it's a mature business that sells cars at a break-even or loss from time to time again the stock the exact same as it was in the first weeks of 1987 it is a bond it is not a stock to invest in. >> would you trade ford, bri >> i like mike's trade keep it simple it is a bond just struggles to get out of the bottoms here valuations look really nice and my analysts say buy it and we are like, yeah,just sits there doesn't really do anything can't really innovate as well as a tesla. so sell a put, put to down $11, something like that, i would be

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td ameritrade. award-winning customer service that has your back. welcome back to "options action." time to take some tweets the first fan asks broadcom has had a massive run up in light of nypd's strong reporting. thoughts into a play on earnings in the first possible pull back. brian? >> i would rinse and repeat what i did with nvidia in terms of buy a put, protect yourself next week the stock was up 11% today no big deal. so i would rinse and repeat that play and hang on it. we added to broadcom a couple days ago i continue to hold it to upside. >> the next asks where do you see bitcoin and ethereum heading from here? carter, we haven't been asked about cryptocurrency in a while. what are your thoughts >> the dollar has rallied considerably

i think you fade the dollar here by extra distinction, the dip i think are viable. >> we got time for one more. is there a rule of thumb for selling cash cover puts a dividend paying stock you would like to own at a price olower than the current price, how far how should i go comfortably? >> not through earnings, first of all using the ford example from before, look for levels of support as well. that's probably about 11 bucks there. and i like to collect about 1% of the strike per month. and actually that's approximately where a one-month 11 strike put on ford gets you levels of support, 1% a month, avoid the catalyst. >> it is time for "the final call" photographer this three-day weekend. >> we talk about cisco, one point the most valuable company in the world and now a shell of itself it is bottoming. nvidia one day will look like

cisco. >> brian >> with memorial day feels like the start of the summer but i am going to just use amazon and play that summertime to upside, cheap way to play to upside. >> mike? >> cisco calls to make a bullish bet there and call spreads in lulu. have a great holiday weekend. next, taking stock with mike santoli starts right now welcome to the cnbc special taking stock i'm mike santoli jim cramer is off tonight. stocks jumping as we're getting closer to the debt ceiling investors try to make sense of the moves on wall street and in washington, tonight, we'll dig into the week that was and what's ahead for the market coming up. debt ceiling deadline, the white house an