not just make money from his investment, but can he enact change? ♪♪ ♪ right now on oa, despite a down week for the markets it's been one heck of a first half of 2023, with one week left, how are options traders setting the table for the next six months? we'll break it down. plus, trading the globe, beyond the president's big meetings in the india's prime minister, a hectic week for markets in india, japan and beyond mapping opportunities abroad coming up. and earnings on tap at walgreens, can the pharmacy giant find the right prescription to turn around its

stock. this is "options action" live from the nasdaq market site on the desk tonight we have mike khouw, bonn win eisen, and tim seymour, and first-half hotties, nvidia up nearly 200%. meta jumping 40%, and tesla driving more than 100% ge, salesforce and more locking in soft gains in the first half. will they keep this running going in the second, key question, tell us the answer, tim. >> well, i tell you, you talk about nvidia, and you talk about one of the greatest momentum moves we've seen in any stock of all time i think it's, you know, options traders are certainly planning on how or part of the strategy is how you deal with that upside vol you've had and how you look at the future. when i look at a facebook where i think around a.i., and we just recently talked about this 27% of their content is a.i. driven, i actually think they're in a

position in the second half to continue to ride because that multiple is much less demanding than some of these other names netflix is a name i've been long and i'm starting to fade the position none of this is about a.i. for netflix, it's about the profitability and free cash flow generation for netflix still staying long but trimming the profession. >> mike koe, what do you think about these first half hotties, can they continue the run? >> they certainly could. we have seen high-flying stocks and other sort of, you know, bullish areas continue for extended periods, and certainly names like nvidia could continue options traders are seemingly quite optimistic this is one of the most active names. and actually, that's one of the things you can look at if you want to engage thfs for sentiment, understand what they're thinking, you can take a look at options volumes and nvidia in the top ten consistently all year. it was in number 4 today, if you look at it on a national dis, even higher. these kinds of valuations, if

you're long-term investors, we're looking ahead to the second half and beyond, it's harder for a name like this to stay ahead a lot of economic data we've been getting lately seems better than otherwise expected. if i was going to be picking things to be long for the second half this isn't the place i'd put new money to work. >> fair enough, bonnwyn, what's your take? >> it could continue, what's the catalyst further, the names are a.i. adjacent. nvidia is near to my heart and it's done well we've baked in robust and resilient economic activity which we have seen to mic koe's point. when you look forward, a.i., this value expansion we've seen across the complex has really been fueled by this specific subsector within technology. so, you ask yourself, listen, given all of the head winds that the fed is still alluding to, and the move that we've seen in

pricing, and what's really come, again, at multiple expansion as opposed to earnings expansion what's the catalyst that's going to take this leg further when i look at high beta type of names expect there's going to be volatility this is not an orderly move marching up and to the right you will expect to see, you know, a little bit more volatility in the second half of the year, particularly if the consumer starts to feel the real crunch these names could, and they have done exceedingly well, i would expect to see a bit more mean reversion second half of the year. >> what about tesla? we talked about it being up 100%, and there was a downward price target revision, if i'm not mistaken what do you make of that >> the story around fu fundamentals, about to give us deliveries on july 2nd, and they'll hit the 1.8 annualized

number people can fight that one out on both sides of the aisle. this stock has been all over the place. i would just -- i would point out it's definitely a case where one of the hardest things to do in markets is to let your winners run. especially if you are a trader, but there are a lot of long-term investors out there, and i think they're probably the ones that are laughing last when it comes to some of these names that i think at times people tend to overtrade them i'm not a beyer of tesla here, let's be clear, the dynamic on the multiple is difficult. the chart is one that started to break out through the 200 day and there's a lot of shorts in its way. >> absolutely. we have seen the names surge in the first half there are other stocks that you're keeping an eye on to drive the second half. tim, what are names we should be looking at going forward let's leave the past in the past. >> ali baba has been in the news this week, and china has been in the news this week, and this is one of the most recognizable china stocks, certainly in big tech land. the fact that josiah is allowed back in, net-net, one of the owners of the nets, very bullish

for the stock. this is essentially one of jack ma's boys, they built this company, a lot of questions about who was allowed to be in charge there and i think you've got a dynamic where it's going to continue to at this point, the sum of the parts is something you can start to play, i would realize it's been less about valuation than it about the pressure from up above the energy sector, after being, we could have said that first half winners in '22. in all of '22, it's underperformed the xle to the s&p about 22% year to date i think energy, it's with some irony, kind of the circular nature of the better data we're getting, looser financial conditions are coming from cheaper oil prices and there's some sense this is actually stimulative in terms of what it's doing to the economy. oil traders are saying as demand is down, energy companies are run differently, say long xle. >>make, what do you make of it leaving the past in the past from thes previous conversation and the winners driving the way

forward. >> yeah, i think some of the themes that tim was just talking about make a lot of sense here i mean, we've seen a real dichotomy between the names you were just talking about, the a.i. fueled names, some of these high multiple expansion types of stories for the first half of the year, you know, there have been a lot of stocks left behind now, there have been some technical analysts that suggested that that actually is a warning sign for the market that you basically see just sort of a small group of winners and then a much larger group of companies that haven't been doing as well. there's another way to look at that, and that is that those names could potentially play catch-up a lot of them are really not that expensive on a valuation basis. so, the two companies i was taking a look at, similar story in some ways to what tim was talking about in having underperformed this year, general dynamics first of all, defense is defensive. if you are concerned, if you think that the market is going to get a little bit rocky here in the second half, reasonable valuation, and not likely to

face a lot of economic pressure, on the same sort of theme we could look at an agri business, again, a company that is trading at a very reasonable mumt pl now, of course some people will point out that the company has seen real increases in revenues as a result of pandemic-related inflation, and we're not going to see that continue but i still think the company is very reasonable here. >> bonawyn, your picks for the second half. >> you're going to call me a wet blanket. pump the brakes there. you know, i kind of like showered, i know, listen, we're up and to the right, everybody's excited. i think i'm just going to want to bring everybody back down here i think the second half of the year is very much going to be about defending your gains, much more than it is chasing the hypermoves we've seen first half of the year. for that ran, listen, i still think short-term treasuries gives you great risk justment returns and i want to drill down on that. it's not about chasing the

highest flying name, when managing a portfolio, there has to be orderly aspect if you can slide down the risk curve and pick up incremental yield. that's a compelling story. the second one is mcdonald's, and this is a name that, listen, the consumer has remained resilient, they've continued to spin and we've seen it, certain names, target and walmart, et cetera, where they are trading down and i expect that to continue second half of the year the fed, again, has told you we're going to have to continue to raise rates there's been, you know, a bit of debate about that. but as you trade down, i want a name that's strong through pressure mcdonald's offers that. >> we've been talking about winners stateside, kmek names and domestic situations, but what about opportunities abroad india's prime minister making a landmark visit, meeting with president biden, and big tech ceos on the back of president biden labeling xi jinping a

dictator after secretary of state blinken met with the chinese leader you're laying out on trade here, mike tell us what you're thinking. >> yeah, i mean, obviously that was not helpful for chinese stocks at all, the comments made, and hit them fairly hard this week. but i'm just trying to focus on the economic activity side as i was indicating earlier, some of that hasn't really been quite as bad, ipg, as some people have been making out. now, we could see some additional rate hikes, what bonawyn was suggesting, if you have cash deployed short-term treasuries, that's okay, but looking at emerging markets here, this is a similar play to looking at materials and energy, some of the things tim was talking about, just if things are not as bad as people are making out this is a sector that has severely underperformed this year, and is looking relatively cheap in my view and i think this is a place that people could take a look at cautiously getting optimistic with a risk reversal i was looking at selling the

september 37s to buy an upside call, the 41 strike call, collect a little bit of money to do this trade. worst case, you're going to be put around $37, discount to where it's currently trading, get participation and offset the decay. >> tim, what do you make of this trade or the general idea behind the trade? >> well, you do you have teased the segment, say we're going to be trading the globe there was a great show on cnbc hosted by yours truly a decade ago. >> i remember. >> the point is i am someone who's spent a lot of time in international markets. mike is laying out the options background on why emerging markets look interesting the eem at one point outperformed the s&p by 20% once the dollar peaked in october of last year. a lot of dynamics which have em underowned are things that can get better, don't have to get remarkably better. currencies tend to be 50% of your return when you're investing in emerging. japan as well, we've talked about this on fast money,

dynamic where you have a market that's suddenly running into inflation, coming out of decades of deflation, i think japan is a place that is a proxy for chinese stocks in some sense and japan can continue to run. these are places if you're investing globally, right now is a very interesting time, again i think the allocation of portfolios by hedge funds is moving towards international. >> well, still to come, we are laying out some trades ahead of key earnings reports next week, how to play some of these names, that's coming up next, and for everything "options action," check out our website and newsletter, there's more "options action" here on tv live after this 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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welcome back to "options action," check out the names gearing up to deliver results next week, carnival, walgreens, gm, micron and more. let's lay out some trades. walgreens, down 16% this year. how do you see it trading after the results? >> yeah, you know, it's interesting as i was just thinking about this during the break i realized that it might seem like we've got a little bit of what charlie monger has disparagely referred to as the cigar butt strategy, have a dash

for trash here, but this is obviously a name that's been hard hit this year i think there is a possibility after a fairly disappointing beginning to the year that we are getting to a levelwhere it might start to make some sense to make a bullish bet. you know, it is obviously a risky thing to do because we're bouncing around here towards the bottom, it's possible to breakthrough it. but i think we could take a look at an options trade that gives us the possibility of giving us some upside and still we wouldn't get long until it falls to even more attractive level than right now call spread risk reversal. things to think about. you want every single leg of the trade to be reasonable, long at call, that isn't attractive, reasonable point, you'll be short an upside call to help finance it the thinking here is that's a level where it might run into potential resistant and if you're selling the downside put to finance it as well you're looking for some level of support. that's essentially what i was doing here you can collect a little bit of premium on this trade, basically spreading it out by about $2.50

a side options market implying a move of about 6%. that's bigger than it's averaged over the last eight reported quarters, this is a way where you can sort of dip your toe into it, if you will. >> bonawyn, what do you think about this walgreens trade. >> picking strikes that are actionable, and there's a reason behind them. these are relatively closely kind of tied options strikes, right, and really if you look at the beta of this name, you're not paying a beta bleed for a move you won't get to. thoughtfully laid out trade by mike. >> micron, will the chip rip keep surging, how are you playing this name? >> they're not catching the fire that the a.i. buzz has created as tim who i know speaks about this name quite a lot is probably going to be talking about here, it's going to come down to pricing. it seems like we might be

getting support there. this is a name that also can move around a substantial amount on earnings, this one implying a larger move, even, than walgreens is, probably 7, 8% here, i think we can look to using an in the money call spread that's the trade i was looking at here, again, trying to offset some of that decay essentially using this as a proxy for stock. in this case i was looking out to july, the 62/72 call spread that was in the money, it was going to cost about $4 paying $5 for the 6 # calls, selling the 72s against it this gives asymmetry to the upside, nominal decay. a few cents to make a bet. it's really disappointing news, a company that's been losing money the last quarter or two, you're not really taking that much risk to the downside. >> tim, what do you make of this >> the option call is certainly playing to the fundamentals, there's asymmetry to the upside too, in stabilization in pricing is going better than people

think. i think they've done a great job of actually managing prices at a time when destocking has been the story here for a few quarters already so, again, he pointed out that this is kind of the stock proxy to the long side, and i think that's right remember, it was just, i don't know, two weeks ago when mic ron was under the gun of being named by china as one of the companies they were not going to basically strategic companies could not be a buyer of micron, and politics around the tech sector, it may be but right now micron has recovered most of that from an earnings perspective going into these numbers the risk is to the upside. >> this has potential to not -- unlike walgreens what do you make of this one >> the call strike in the money gives you more stock-like performance. you know, i will say the stock has pulled back a bit from its peak here, so i prefer the options play because it does limit your downside, if it were to roll over or return back to trade. coming up next, carmax in

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welcome back last week mike laid out a way to buy carmax shares jumped 10% today. mike, how are you managing this now? >> you know, it's always nice to look back on a winner. i think the story concarmax is a lot like housing, everybody expected rates to rush demand. maybe not as much as people expected this trade is a winner what you want to do, and i don't think you should necessarily pair your gains completely her the stock traded well into the close. roll those 82.5 calls up and out, so take some of the money off the table but continue to play to the upside in the call spread. >> mike's playing with house's money as he should great trade. i look at the fundamentals around kmx and say the used car market continues to lose share, trading 25 times forward i get what's happening

14 million shares traded today, there's a lot short covering here we're going to see positive revisions and you're going to see some of this trade out i think you have a pretty good opportunity to fade this trade if you made some money. >> bonawyn, up 10%. >> i'm going to straddle the fence, pun on options trade there. i'm going to take half the trade off and roll the other half off to ride my winners, best of both worlds. >> that's no wet blanket there up next, your tweets and the final call

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welcome back to "options action," it's time to take some tweets, our first fan asks, quote, looking for a strategy how to play the following position, long nvidia january 2024 options and sold covered calls nvidia december 2023 what do you make here, mike? >> this is an interesting situation you're in because you're long at 200 strike calls,

a 422, $423 stock now, and short some relatively deep longer dated calls. good news, december options have $45 worth of extrinsic premium, the stand still rate of return, if you held the position and a stock went sideways you'll collect better than 10% of the stock price in less than half a year there's no intrinsic premium deep options out to january. you might think about rolling those up a little bit. it's painful to take off the decembers right now given how pricey they still are. if you bought these when the stock was much lower, well done. >> next tweet. next fan asks can you share your thoughts on square, is it a buy? >> this is tough, i'm long the stock, long through different periods. it's the largest, you know, essentially neobank out there with 65 main on the cash app there, both sides of the equation seller gp has been increasing, and it's a stock that's

outperformed multiple other kind of techs, we've talked about other fintech companies, i like it, i stay long, there's been a painful run. the comps get easier and they're conservative on their april guide and we might be see something better coming through. >> last fan, explain a short straddle of, give me an example of in the money, bonawyn, for you, you were just talking about straddling. >> you're shorting a call and a put at the same strike, you're betting on the volatility, the implied volatility of those options is not going to be realized you need that move to stay within the premium you collect, either to the up or to the downside. >> time for the final call mike >> yeah, i think we can look to a couple spaces where we've seen some underperformance so far this year, general dynamics and bungi. >> tim. >> vix has been falling with the market, you'll see the market stabilize next week. >> and bonawyn. >> all returns are not traded

the same, risk adjustment returns for treasuries. >> back next friday 5:30 p.m. making of the meme king is next, starts right now >> 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,