right now on at o.a. investors digest early results from banks how options traders handicapping the action we'll debate. plus, tesla all charged up ahead of its results the stock up over 25% this year. can the ev making keep rev up its returns? later, we'll see if netflix can keep streaming higher, in energy names can keep the summer going,

and if rebounds are ahead for the health care owner i'm sarah eisen. this is "options action" live from the nasdaq market site. on the desk, mike khouw, carter worth, and brian stutland. we're going to start with the huge week for stocks as we roll into earnings season the major averages rallying for the week as cooler than expected inflation data boosted optimism on the economy and the fed banks kicking off with earnings, j.p. morgan, citi, black rock, wells. the stocks trading mixed on the results. as we head into the heart of earnings season, what is onnure radar, mike, and what do you make away from the signal so far? >> we had some mixed signals this week for sure first as you pointed out, we did get somewhat better thannen expected epi data. at the same time that happened we did see increases in oil and copper prices, which we might think of commodities that are

tied to the economy, sort of industrials there, so that's obviously i think a positive on the downside, though work saw two tens that went the wrong way. ten-way rates go lower that's not necessarily a positive when we take a look at what the bank had to say, wasn't all that great. net at j.p. morgan were good, but overall, talking about increasing blin gwen sis, talking about lower level of consumer borrowing, and net deposits turned negative you put all those things together with the fact that nvidia, the bellwether for the market i think so for this year gapped higher on the open, hit an all-time high and closed lower. that, which the market seemed to mimic doesn't look good to me. >> carter, what do you make of earnings >> it's impetuous of late. three unfilled nd gaps in a row,

and then the reversal today, including nvidia >> we got a frozen carter. >> -- priced in, i think most specifically in the nasdaq in any event, yes, impetuous, and i would be fading the move in ndx. >> brian >> yeah, i think it's interesting what happened this week basically mike mentioned their little reversal at the end of the day. one positive thing is we saw the vix volatility go down historically that's been a sign for the rally meaning we are selling puts into a downsided market maybe it's just a breather at the end of the week, but obviously carter here talking about the dollar being weaker. doesn't feel like a dollar crash, but certainly there's been a big reversal in the dollar, and i think basically when we've seen ten-year rates sort of not be able to get above this 4% mark, it's really weakened the dollar, because the rest of the world basically saying maybe the u.s. isn't doing enough to control

inflation there, take inflation to that 2% target. maybe we'll have to live with higher inflation in this world, and that's going toweaken the dollar that's helped nameslike in the dow, which have a ton of exporting situations there so a weaker dollar there we saw the dow continue to rally and bounce off lows that we saw at the beginning of the year as it struggled, and maybe that reversal here, those big cap, mega cap names might be beneficial. >> we want to talk about that exact topic here with carter, honing in on the currency and bond market move cart you are, you're seeing a big theme. >> what do we know someone who specializes in many ways in currencies, we know the dollar peaked in september, the third week, and then one month later, rates peaked in october let's look at rates. so, what do we know? we know again there was this bit of strength. rates moving up, but it's a head fake we've moved up and out of those

converging trend lines again, that's almost ten months ago that rates peaked, despite the streak thinking we're going higher, we're not. look at the ten-year yield, five-year, two of year we can look at one chart after another. those are all head fakes that are not good the two-year, of course right back to the former, and we might have real ten-year yields, which you'll see next. all of this would suggest that despite, well, rates goinger higher, well, they're not -- i don't think they are you used the phrase one and done i think that's possibly what we're dealing with the dollar's never confirmed any of this. we can look at the chart of the dxy, and what we know is the dollar not acting well, it would all suggest that very much an instance of rates having peaked for basically ten months and not going higher. >> so, there's a risk to that, though, isn't there? mike, the risk is first of all we've got strong data today on

consumer confidence and inflation expectations i know the theme has been better growth numbers and moderating inflation numbers, but we still have a health labor market some commodity prices are rebounding like oil and copper there's a risk that inflation pops back up, isn't there? then rates might have to go higher. >> well, you're saying exactly what larry fink said larry was basically pointing out that people should not discount inflation too much here. you know, i think that bringing it down from 8%, 9%, to 4% to 5% is a whole lot easier than bringing it from 4%, 5%, to 2% or below the fed's stated target, particularly when the labor market is as strong as it is we haven't seen prices come down inevitably because you have higher price levels, that's going to create pressure in combination with higher wages, and that's what makes essentially behave in a cyclical manner and makes it stickier

than you might otherwise think but consumer confidence numbers are one thing, and what consumers are actually doing is something else consumer debt levels, basically the level of borrowing has slowed considerably. in fact i think it it levels it hasn't since april 2020 which was basically right when the pandemic was breaking out. >> brian, we'll give you the final word on rates and the dollar's direction, how that impacts the overall market. >> i think if rates are going to stay somewhat tempered here, if the dollar is going to weaken maybe it's time to look and pick up commodities in a portfolio. i know xle was down on the day, but that might be an area you want to consider like i said before, i think some of the dow mega cap names that were beaten down to start the year that have so much involved in a u.s. dollar trade, where things get cheaper for them to sort of export and profitability increases might be another area of the market i'd be looking to add to my portfolio. >> like a staples? like a png

>> anywhere from microsoft to american express, some of the other bank names that were sort of beaten down, and a name like deere, cat, i think those things could be in a good position now to take off. >> by the way, microsoft did close higher even though nvidia was lower. now for a name we can't help but talk about the most traded options name on paper and in our heart, tesla. the ev maker up now more than 120%. last week mike laid out an options trade to get in on the surge. tesla shares kept getting higher now with earnings due wednesday night he's laying out an update on the name, mike. tell us what to do. >> when earnings seasons come along, this is really when stocks move. the first four week of earnings season, typically kicked off with j.p. morgan's earning, s&p

rises 90 points on average this is when stocks really move. tesla is is no exception this is a stock that's moved nearly 20% higher or lower in a month over the last three years. we have cybertruck coming out later this year. one of the things we're beginning to realize as cars are going ev, that tesla is the legacy ev automaker, without all the baggage that most of the legacy ev automakers have. they don't have dealer issues. oftentimes when you have high demand cars, it's the dealers who end up making the money. we had a nice run in the equity. i'm looking to move out of equity and into an options i'm purchasing the august 280/2230 call spread that's looking at four weeks after earnings

20% that the stock move has been on average, because that's basically where the upside target is. you can risk about 5% of the current stock. it's a lower ray to risk this, especially net of today's reversal that we saw this is another one of those high flying names. not as high flying as nvidia, but it is definitely up there. we have had some nice games and i think we can play with house money. >> yes, grasso said it's going to 300 carter, what are your thought on tesla? >> if you're long, take measures, buy calls, puts, or some variation of all of that. it's a steep uncorrected move far above its 50-day moving average. if we have a chart we can pull it up. if we don't -- again, one wants to consider something that was loved and hated is once again loved. usually when you get lopsided like that, usually it's right to take the other side. >> brian, what's your take on

mike's tesla trade >> i like it the last four quarters the, stock moved over 6% after earnings a call spread that's costing less than 5% of the stock, that's a way to limit some of the risk on the run-up i bought tesla a few months ago. now the stock's run up now maybe time to sell buy a call spread instead, get upside rotation, get the earnings in if the stock continues to run higher. that's a great way to play it. >> all right for everything action "options action," check out our website and newsletter there's more "options action" coming up after this >> coming up, as disney discusses a radical shake-up of the media space we look ahead to netflix earnings next week plus, with oil on a recent rebound, we drill down on slumberger plus, calling all "options action" fans, reach into your pocket, grab your phone, and tweet us your question @options

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welcome back to "options action." we've got an update on this developing story, the lawsuit against j.p. morgan over its banking relationship with jeffrey epstein. the u.s. virgin islands saying in a filing late this afternoon that it would seek at least $190 million in damages. well, now a spokesperson for the bank has just told cnbc the document filed today does in the reflect the nature of settlement conversations. as for the u.s. virgin island's

disdirected damages theories they are not well founded and are being challenged by j.p. morgan in court. as mentioned, earnings season kicking off here, and we're looking ahead to a busy week more airlines, home builders and a lot more let's lay out options trades on a couple of your favorites brian, considering disney's media sector rocking comments about getting back to core, you're looking hard at netflix ahead of results wednesday. >> netflix should be an interesting play next week given we're starting to hear potential strikes from the actors out in hollywood and how that will play out for a lot of names i think netflix will be less impacted than other bigger media people out there, but netflix has had such a huge run, it's already retraced 50% from its low to high of 2022 already. i think there's probably some more room to run, but i think there's ways to use options to sort of benefit this area. here's a company that is now probably going to have $3.5 billion of free cash flow

that's a significant increase over last year when i start to see cash flow increase, i can start to sell a put, not be so worried about the downside i'm going to use an options play to continue to play the upside in netflix and use options to do that with a risk adjusted take i'm going to buy a call spread, 440 strike all the way up to the 500 strike call spread i'm going to look to finance that by selling a put spread these are all options that expire friday. all goes away if we don't make a move within the parameters i can pay $7 debit to own this on the call i'm going to own and put on the downside. i get to make money all the way up to 440 all the way up to $500 a share, and here i don't own down to the 420 level. i don't expect the stock to fall

below there. if they do, i like owning the stock down at that level, so i'm okay with sort of the risk/loss down at that level this is a nice way risk adjusted to play netflix to the upside. >> mike, what's your take? >> i love risk loss reversals. i might try to widen out that put strike, just drop that down, take that long call strike up a little bit the idea being, if i'm going to be put to stock, i'd like a bigger discount than 5%, which is what you'd be getting if you get the stock at 420 i like the strategy. maybe push it out longer as well. >> let's get to another name with results next week slb, formerly slumberger the oil stock ripping higher, but just like the broader energy sector it's still underperforming the market mike, you've got a call to action if you think the recent rally can keep pumping, what do you do >> yeah, so obviously i like

this space i usually talk about how -- we did on a couple of occasions just recently. i think you have to talk about slub -- that's what we'd call it back in the pits back in the day. they're the biggest player they have the broadest exposure to anything big that's going to happen in the space. we talked about haliburton's targeted return, 50% slb, looking at a bigger one, 50% if they manage to get up to it i will say as a caveat, their free cash flow was disappointing in the last two quarters but again, expecting if there's going to be a move we're probably going to be getting it coming out of earnings one of the things you can do, similar to the tests of trade, risk a little bit of the current stock price to make a bullish bet. i was looking to august, 52 1/2, 57 1/2 call spread lay out $1.50 for that going to be risking less than

3.5% of the stock price. i think that's the way to play it going into earnings here. >> carter? >> strong stock, a lot of immediate momentum and i think it goes higher we can look at a chart, but what we can know is big week for the stock, a big week for oil services, and this is the third big week in a row where you're up more than 5% on the week, and yet so far below where it's been >> brian >> talk about stocks to own in the weaker dollar environment, i think slb is the name i do want to own, and i like owning a call i think it gives it exposure, weaker dollar. if energy prices hang in there to tick higher, i think profit margins expand, and slb will be a perfect one. up next, we're checking on unh, united health care. after its big move higher today, how the ads trerare managing that one when "options action"

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welcome back to "options action." last week mike laid out a way to play united health ahead of earnings results that beat expectations this morning, sending shares surging finished up 7.5% even with a market reversal. mike, how are you managing this now? this had a much bigger than expected move. good for holding but not for the override we did selling a credit call against it. if you closed that straight awaying you lost $2.65 a contract, and that's often what you want to do in this situation. i will say, though, it does feel to me like it needs to get above 490 that we can say it's decisively out of that downtrend we have been seeing. >> carter, we know how you felt about the chart, god-like. >> it's a stock that's recovered

to its declining 150-day moving average. saves what's been an ongoing circumstance down 20% from its peak much better than the qqq or s&p. but for a very benign, orderly, all data uptrend, it's struggling what to do now it's a pair of twos. i would neither be long nor short. part of the reason is it had comments at the conference about how elective surgeries were going to be back and it hurt sold off hard on that news. >> basically saw it reverse, and now it's a short play getting squeeze. now play to the downside, now it's run back up mike makes an interesting point about whether you want to cover this short call spread or not. i like to pick a price point, stop myself out, cover it if it gets there, and mike hit the right point for the stock. because if the dow and dow jones goes higher, unh might get

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because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back. welcome back to "options action." time to take some tweets of yours. our first fan asks, i have been rolling my 170 apple calls every week to avoid getting my shares called away. time to the considered or to you dee a pull com backing to continue rolling >> next week, nasdaq has a major rebalance and the top seven stocks are over 50% holding waiting in there that's going to cut back around 30% waiting. apple is one of them, so there might be a pullback next week, so i would wait to role calls before and let's see if there's pullback in top names in the na nasdaq. >> next fan asks, a while ago i sold a september call.

should i repair the trade, and if so, how mike. >> first of all, if it was a while ago and september you might want to consider shortening up the distance out in time that you're selling these calls. that's the first thing i would say of course. this is already done i would take a look at the extrinsic premium that's left. if all you are is in a call that's trading at parity, that's a short position, and i would actually consider just taking that off and possibly rolling up, but because you're so far out in time, i might just close it. >> one more tweet them one asks, thoughts about an ishare silver trust october 27 call. could be -- dollar trends and weakness may cause slv to go past carter >> welsh that's exactly right, it's about dollar weakness a big strength in silver, silver outperforming the all commodity index. overhead supply notwithstanding. i would stick with the trade >> time now for the final call

from each of you carter, you go first. >> let's go with silver, slv. >> there you go, make it easy. brian? >> netflix, buying a call spread, selling a put. i don't care about the actors strike i think stock goes higher next week, earnings. >> mike? >> tesla, take the -- off. put