and now what? we're all left just to forget about it, wish him well? you know, 'cause he says he's sorry? i don't. i don't wish him well.

>> well, i think we need to. the trade that we recommended were the july 145 calls. those are comfortably in the money. we recommended those when it was less than two bucks a contract they were about 5 1/2 bucks a contract i think it would make some sense if you were looking out to july. you should roll those up and out to the september 150s. i own calls in rsp and i also own rsp on this thesis i'm long puts on spy and the qqqs playing the thesis that carter's talking about. it's interesting if you think about some other prices that we can think about the other thing

that's interesting is those are quite cheap. if you take a look at implied volatility which is the cost of options. the applied volatility for at the money options in the september/october time frame is about as low as they were on february 1st of 2020 so that was right before essentially all of the volatility that followed the onset essentially in the united states of the pandemic you have two things working for you, the fact that optionality is cheap and you have the technical setup as carter articulated. >> kudos to make rsp and big tech and ai and the

qqqs rsp has outperformed that in the month of june up about 6.5%. that trade is getting started. he has rolled this out and i would buy it and a cheap shot. i can overlay this on a complete equity portfolio to get some leverage equity to see if i can get some outperformance from the equal weighted s&p. >> revising the rsp is another way to play carter's thesis. brian, you're going in that direction. >> yeah. i am speaking of under performance, while etf is one way to play it,

the dow has underperformed and lagged the rest of the market. there's a lot of large cap volume in the dow. that has been a favorable thing to this year to date it plays catch up. i'm using a call option looking out to the end of quarter year, end of september they have gotten cheap enough. that's the diamond etf that tracks the dow jones industrial average it's pricey now. these things don't run out of time value so quickly because this is a longer dated option. this is working with me. 352 and a quarter. 352.75 anywhere above there i get all the up side and maybe the dow is another one of those areas that plays catchup. >> carter, how does the chart

look for the dow >> if you think about the dow versus the s&p, while one is 30 stocks and price weighted the other is market waited you have a correlation of 90%. spy versus dia, that's the first. there's two. the second, now the third. when you have a spread like this, this is one way to look at it, but the better way is to show a ratio chart similar to the rsp/spy. at the end of q3 the dow was ahead of the s&p because apple and google were on their knees awe it was right to fade the dow, now it's right to fade the s&p to the dow this is the third most extreme

it's a value growth. >> mike, thoughts? >> yeah. i mean, this is a similar theme i'm in favor of it credit trades when you're looking for options. selling call credit spreads makes sense. options are very cheap here. actually, what i would recommend instead buying the calls gives you at relatively low cost up side exposure. as the market moves, you will have the opportunity over the course of the next three months to make needed adjustments you could, of course, if it goes up roll to a higher strike call. you could sell shorter dated calls. implied volatility will rise that will help support it but

you could also then look to sell some down side for credit spreads to offset any decay you have it gives you something to trade against as well as trading bullish exposure >> we'll take a quick break here for everything "options action," check out our website. there's much more "options action" right after this >> announcer: what do apple, tesla and home depot options all have in common this right now is the time to consider all of them, even especially if you already own those tocks. we'll explain why and analyze each one in depth next. plus, calling all "options action" fans reach into your pocket, grab your phone and tweet us your question @optionsaction. if it's nice, we'll answer it on eighteen when "options action" returns.

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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. welcome back to "options action." the first half of the year is in the books. outsized moves that helped power the markets. the company made a $3 trillion market value carter, what do the charts tell

you? it's important to know, apple remarkably, the end of q3, here we are the end of q2, 20 months later, apple's relative performance to the q's peak september 3rd, it is actually under performing if you look at this next iteration, those peaks we've checked back to trend fairly consistent i think under performance, apple itself, it's made a new high you can see that here. the question is do you stay with it trim it. you don't have to do anything, i would. clearly with apple where it is, mike, you say it's almost ridiculous not to use options. options are really cheap. >> think about something carter

just said, that it's under performing it's hup 50% year to date. how could it be under performing anything what that speaks to is the degree of exuberance we see in so many stocks. tesla's up oracle is up meta up over 100%. they're seeing runs that are almost unprecedented similar to what we are talking about, options premiums are quite low. the the money are five-year premiums if you've enjoyed these kinds of moves, it makes good sense to replace long stock positions

using calls instead. looking out to october, the 195. the stock rose another dollar or so going into the close. in much the same way we were talking about this gifk you some measure of flexibility, you can spread vertical, diagonal, if the stock comes in, i would only do that if it came in quite considerably the valuation of apple seems a little bit heavy to me at this point. >> let's get to another big winner the first half. that would be tesla. shares up 112% so far this year brian says while there could be more up side, there's a safer way to play an extended run how do we do that, brian i'm looking at buying a call spread we have earnings coming up in

july, july 20th. sales numbers next week on how we're doing. still seeing inventory building. it's breaking out above the 212 area, 215, right above there what do i do a lot of investment advisers say i want all of the up side, none of the down side, right? that's impossible. we can use options to limit that risk, basically and take away all of the risk. i'd sell out of my stock and purchase call spread the 260, 310 call spread i can go out a couple of months and spend $15.50 basically i spent $15.50 i get to make money up to 310. there are areas of persistence it's trading at seven times forward looking earnings i want to participate.

two call spreads for every 100 shares of stocks i dump away now i get double the up side from the 250, 275 break-even 30 bucks a premium, that basically limits me to miloszs on the down side i can capture all the profits that i made from buying the stock lower, still get double the up side. that is somewhat of give me all the up side, not much of the down side. >> how does that chart look to you, carter? >> rallied to a difficult level. by my work, we know that the stock beat at 415. we've recouped half of the losses from the all-time high. we're up against a level where it's hit its head before profits, trim before it goes forward. >> mike, what's your take on brian's trade?

>> there are two things i like about it something we don't often talk about, how many contracts do you buy when you are trading an options spread relative to what you would own. two call spreads relative to owning 100 shares of stock it's important people realize however much capital, it's how much you're risking which is how much the stock moves around. that should dictate how much you spend on the options very unlike rsp, apple, the options aren't particularly cheap. these are trading at 55, 60 vol. part of that is related to earnings and part is related to the fact the stocks move that's one of the reasons why using a call spread as a stock position or two call spreads, it makes sense to do a lot of different things. >> let's look at a name that hasn't had such a hot first half and home depot shares are negative

carter sees something constructive in this name. carter, what do you see? >> this is the circumstance where do we stay with deep names or harvest profits and put it into something that's lag. two charts on home depot, doesn't matter what you call it. all of the elements of reversible, something that's lagged i like home depot. it's contrarian. the relative performance to the home builders is literally at 15, 20-year lows >> wow >> how do you trade it >> the home builders are doing well people expected them not to do well but the fact we were under supplied for so long has essentially meant we've been able toll sustain significant demand obviously technical analysis, one of them. we look to the options markets to gain the sentiment. it remains very strong in

sectors like real estate in home builders, high yield, things like this. only 25% above the pre-pandemic high i think here with relatively low options premiums, look out to september, buy the 315 calls they cost as little as 9 bucks or more. that's where they were when i was looking at them. that's where you can get the most exposure. once again, you do a trade like this it's not just set it and forget it, this gives you essentially a point. you can adjust, roll, spread if and as we see the thing languish a little bit and adjust to implied volatility.

>> brian, what do you make of the trade here >> the autos, home builders, they're giving insight there is up side. home depot is going to play catchup. i'm becoming bullish home depot might participate with everybody have unlimited up side makes a lot of sense. >> up next, we are taking your tweets more "options action" in two

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welcome back to "options action." time to take some tweets our first fan asks, how would you trade oracle after this recent rise and subsequent pull back >> the stock bounced off the 116.50 level i would buy a put spread for 115/105 put spread i continue to own the stock. the run's been enormous. >> carter, quickly, how does this chart look?

>> massive breakout, 10% pull back it's a buy and hold. with gnat gas on the upswing how should we play it looking at boil and ung mike >> these are two interesting vehicles as trading vehicles they're fine if you're looking for a short-term move. i wouldn't make this a long-term investment short-term trade, these are instruments you can use. they have optionality built in if you are looking longer term, look to slumbergais and al halliburton. next fan asks would you weigh in on the jepi >> i'm inclined to buy it.

it's got a 7.9% yield and this is the kind of thing one wants to put trimmed profits into action >> unusual volume/open ask activity spotted in the imw etf. mike >> you know, i like this i might look a little further out than august 4th. this actually is very much in line with the theme we were talking about in the beginning small caps were big laggards iwm represents them. call spreads makes a lot of sense hear up next, final call.

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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℠. after the final call, carter braxton worth. >> you have to be long better to be long better than

spy. >> wearing the tesla red call spreads in tesla. going to play the call spreads. >> mike khouw. >> calls are cheaper in places including apple and they are a better way of playing the up side. >> that does it for us ""techcheck"" is up next - [announcer] the following program is a paid advertisement for the nuwave oxypure zero smart air purifier, sponsored by nuwave, llc. right now, in your home, you and your family are at risk of breathing in billions of tiny, dangerous particles and contaminants, tied to symptoms like allergies, sleep issues, trouble breathing, and chronic fatigue, and are linked to even more serious conditions, like asthma, heart disease, cancer, and even death. the epa warns that the air inside your home can be up to five times more contaminated than the air outside. in fact, studies show that even cooking one family dinner can expose you to contaminants equal to the most polluted city