in a prison cell in south dakota. he is scheduled to be released in august 2020. >> he just became a really master thief. but master thieves do get caught... but master thieves do get caught... and he did. right now, counting down the biggest week of learning season. tech titans and fast food giants, we will check out the action ahead of the results. industrial surge, traders play a game plan about the big move that we've seen in that sector. later, a look back and head at the china challenge, it's now the time to bet on beijing, or bale? a good afternoon.

this is options live from the nasdaq market. tonight's trader lineup, listed on the screen. i'm the only one on the desk. you guys get to work remotely tonight. let's get to it. let's look at next week's earnings, slk, of around 41%. but after a run like that, the market leadership of technology be fake? >> what do we know? it's dominant in terms of weight, and the big names, the concentration that we've had with us, and at this point, it's important. when people say that top names are too concentrated, the top 10 names average about 20% in concentration. we are at 30% now. we know that apple and microsoft made new highs. the sector itself, slk, is now just back to in slightly above its eyes, before the bear

market began. that was on january 4th, 2022. you can look at this, and you consider laggards to play. is this a double top? i'd a minimum, before you typically see a high, you back feel out at the high. or back away. the opportunity is to look at google. look at this relative two lines, one thing compared to another. with the sector back to a time. google is still 20% below. now, one could say google is not in the tech sector, it's telecommunications. that's not the point. it's a tech company. that's all that matters. it has the elements of a point reversal treating with 20% below. its former highs. you like google on the long side. >> say that again? >> i like google on the long side. >> okay. mike? what about you? >> i think it is google, it is

difficult. i think it's difficult to be buying anything in the space. but, the thing is, alphabet is still very reasonably priced. if we actually take a look at it, relative for different flask flow, is actually the same place as the market, probably in the case of free cash flow yield. and yet, it is growing eps and growing free cash flow at a much faster rate. and actually, if you compared to microsoft and meta-, i would argue with other companies, doing better this year, since 2018, this is probably have grown and comparable amounts. i think alphabet has grown three class flow a little bit late trades. so, i would rather like it going into earnings. i think if you are looking for something that is arguably more the value play, this is it. >> and are not many of those.

brian, good to see you. what about what we've been talking about? >> i hope to sort of replicate the s&p 500. sort of a barbell approach. but, carter is right. it is run tremendously to the upsides, and google is a stock that we are overweight, in our portfolio, it's evaluation that it is compelling. if it stays above this one 19 level, maybe i expected to make some commonly consolidation. but i expect them to get to the upside and continue to bring them back towards the year. >> with is one of the group now, with a bunch of names that report next year. you have chipotle, the golden arches, which is climbing more than 12% this year. that is nothing compared with some of the stocks in the tech area. and mike is laying out a trade

that you think these gains could make a double, like? >> well, i don't know if they are going to double. i will make the following observation, which is that when you take a look at any area of consumer discretionary spending, restaurants, i look like we see services hold up a little bit. it has had a good run. my only anxiety i would say moving into earnings when i look at the name is the fact that it is trading at a relatively high multiple. we were talking about alphabet, that is 21 times. mcdonald's is closer to 27. the stock might be relatively expensive, relative to its own history, the options on this one are not. so, if one is inclined to make a bet, that sets the opportunity. i was taking a look, and options traders have radially been less. at the bottom of the barrel in terms of options and premiums, on the put option.

i always look at the september calls, you can buy those over a little bit of $5.35. getting yourself nearly two months until expiration. then you get some near upside participation, if it does continue to go through earnings. and, if you don't get that or you see the market rollover, and this market gets carried with it, they take a great deal of risk. >> i think he makes a great point. option premiums, the put options, astronomically low levels. and so, playing the upside seems like a very cheap play. and, we talked about consumer discretionary. the automobile industry is shifting on the upwards retraction, that brings into other discretionary funds. and although i like the barbell of tech and consumer staples, here is the discretionary space that i do like. you have a chart on this one, carter. >> what we know, a very

defensive, if you will, sort of restaurant. mcdonald's operates a business that is almost in perpetuity. but, the truck, it reaches the highs, in the first days of may. here we are, three months later, at the exact same level. that's a good set up in principle for the breakout. does it have to break out? no, but that's my judgment. >> thank you, folks. let's switch gears to autos, a lot of talk about tesla and vivian. i like to find ev space. let's not forget about the egg legacy auto names. we take a close look at all of those. >> well, jim was in the news. we heard them assume a whole bunch of shares of gm in order to buy the semi conductor, the stock kind of sold off a little bit. the entire industry, i'm foolish. we talk about it, was tesla, doing some sort of call spread,

risk reversal and vivian. but i'm not going to go overboard. i think there was something towards kathy woods, and i would like to take the opposite side of a lot of her trades because i think she's wrong more than right. but if you are going to limit the risk in the industry, i think gm is presenting itself the option in terms of selling options. i'm looking at selling the call spread out to august. this place an earning picture which is coming up in the next few days, when earnings come out. the stock tends to not move a ton after earnings. only 6% a couple of times the last five years. looking at the 39-43 call. i purchased the 43 calls, stock myself out. i think that is a decent amount of premium. if i am wrong, our trades on review in tesla, i think that goes a lot higher. this is a long short trade, on the high flair, takes the

option premium which is sort of elevated into the earnings that's coming up. >> how you look at general motors, the options trade that he laid out, or more broadly, the autos? >> i mean, the options trade is the way to do this because as equity goes, we know what happened to general motors. or many times around. it went under. this is the new general motors, ipo in 2010. when trying to tell you, is that you have a plunge, covid, and in the search, post-covid. but what is it? back to where it was, in fact, the stock is the exact same price as the ipo back in 2010. that ipo being new shares, from a bankrupt company originally. i do not see the way forward, as an interesting investment. >> mike? >> well, the first thing i would do so is that i would like to say this is a trade

structure, generally. price of options has been quite low and a lot of names. a lot of trades that we have talked about today and actually for the preceding couple of weeks have been long premium trades. but the nice thing about a tray like this is that three things can happen. the stock can go higher, sideways or lower. and in this instance, this is a profitable trade. this stock does not move a whole lot on earnings. this one has a higher probability of success, if not a huge payout. so, i think it's important reminder from investors that we in general do like to sell premium when we have the opportunity and gm, the higher volatility is higher than we thought. the trade structure is the one i like. >> brian? one final thought? >> yeah, the reason i take those strikes, you saw the chart. the $40 level on the upsize has been the upside cap on the stock. that is the break even point on selling this call spread.

i take that for no reason. the technical thing lines up. and then pick my strikes accordingly. >> we are going to take a quick break. and gentlemen, check out the newsletter, and website. there is more options action right after this. still to come, industrials are on the rise. but, not all are built equally. find out how we are swapping power management for post-its. plus, calling all options fans. reaches your pocket, grab your phone, treat your question. if it is nice, we will answer it on air. when options actions returns. >> ♪ ♪ it's an entire trading experience. with innovation that lets you customize interfaces, charts

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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. options action here. brace yourselves, we are inching closer to the easiest week of earnings season. now, we will hone in on a group which is a heavy lifter of late. industrials, up over 5%, performing the broader market. two names against the results coming up. the chart master is here to set the table ahead of a huge week. take it away, carter. >> thank you. obviously, and importantly and economically sensitive area of the market.

we have industrials as constructed by standard sectors. it's making new all-time highs now. but it's not all areas of the sector. let's look at a couple of charts. this is the etf, and we just now moved to new highs. compare this, though, to the next chart. this is the sub industry group and it is also making new highs. and, what is interesting about this thing, is the third. this is road and rail. the first one, was machine rail. so things like caterpillar roads, road and rail is lacking. the opportunities to play this for catch-up. but, in particular, one is so good it's bad and one is so bad it's good. 3m, everybody hates it. all sorts of problems. the fundamentals are three out. it's trading at its 2007 peak before the financial crisis crash.

i think you play for a bounce. on the other hand, eaton -- too much. too expensive. full cell. >> all right. mike, you are trading ahead of next week's report. i think that is in a category that is so bad it's good, according to carter. >> the earnings, obviously, generally speaking, this is when stocks move. in the case of 3m, i think the new news is the liability. we did get some recent bumps, when we started to hear conversations about a potential settlement with respect to these chemicals. those are the forever chemicals and liability for those with the companies they're playing in the space, which includes 3m, includes names like dupont, is really quite tremendous. i do not know that that $10 billion number is really where the liability is going to and if it did, that would be remarkable for the company,

when you consider its trading to a discount to its higher valuations. of course, catching a knife is very difficult. but we did see that any positive news on the liability front could create a real pop. but of course we could get some transparency out of earnings. the way to play this one in a risk mitigated way would be to use the call spread that we were looking at, this one: 15 call spread. the cost around $2.76, when i was looking at it today. those who follow the show who know, i look at these debacle spreads, looking to spend about a quarter of the distance between the spreads were less. slightly higher premium in this case, justified, given not only the fact that we have a catalyst coming up in earnings but the fact that we have all of that liability and i think that justifies the options premiums. >> your reaction, brian? >> yeah, i mean, i think he's right. 3m is so bad it's good. they use the call spread to

limit the risk. play the upside. the chemical area of the industrials has been beaten down. this is a sector and an area with 3m that will continue to push the upside. >> let's move onto the other industrial name that we are looking at in this segment. that will be eaton corp., up more than 30% this year. now, like carter, brian is not so sure this can keep writing higher. >> welcome as a major that i have in chemical engineering, getting out of chemicals with 3m and heat and mass transfer, eaton manufacturing here in the u.s., a lot of big play on that. not just from the u.s. manufacturing more in the united states, but also other countries coming to the u.s. to look for manufacturing, coupled that with cooling systems which is a play on data centers, ai play, we say why the stock is doing so well. it's about time for a bit a pullback, maybe the earnings, sell the news, once it comes

out. look for the downside. i'm looking out at a spread, but plays on the short side. find the 200 foot, at the same time, selling the 190 put, i paid $200, and this payout is almost eight dollars. almost a form, to try to take a shot. not risking a lot of capital. two dollars is 1% of the value of the stock. earnings comes out, 7 news, boosting the downside, profit- taking happens, a high probability of success. >> mike? >> you know, if you have on the stock this is also where you can consider potentially heading our exposure going to earnings. this is not a name that has moved materially, to the downside following earnings really over the past several years. you probably look at pullbacks, somewhere in the 3-5% this range, and this is what the put spread is trying to cover.

this is not, you know, rash protection. this is a good company that is having a big run, maybe, it could take a step back, or pause a little bit. this is a way that you can protect yourself if you on the stock. >> carter? what you think about this? >> yet, so, again, sometimes, when you describe the concept of sequencing, a thing gets so overdone to the downside that you get a counter tremble. that's the premise. they are the reciprocal. it is overdone to the upside, and all great uptrends are punctuated by countertrend moves. dips, selloffs, climb downs, whatever word one chooses. but it's due for one of those. soon i think you very much, carter. objects, a china check in. brian manages the ethics i trade from last month, do not go anywhere. we have more options actions

coming your way in two minutes. >> michelle is sponsored by think or swim, by td american trade.

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a week now out from expiration, how are you managing the trade? >> when we look at it, we talk about the dollar the last couple of weeks, when i look at that, we look at it. we see how they respond to the weakening dollars. china has been stuck in the mud. area where maybe it kind of sticks around here. any side of foolish bet that i put on emerging markets, i will close this out. i would use this like it i and see why. of next, your tweets and the final call.

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time to take the tweets. what you think about k dp earnings coming up? brian? that is a question for you. >> i think if you want to place the upside, purchase a call, play the upside. maybe it is bottoming and it is upside potential. >> how do we feel about the october $60 calls on it twl oh? this recent pullback has provided a nice buying point around the $60 area. >> three things to think about, the timed expiration and the strike that you choose and how much the premium is. you are giving yourself time, slightly in the money. the thing is, the premiums are high. consider selling against the law in october 60. >> one more tweet. this one, can i buy leads on alibaba here? >> your thoughts? ali baba close that 92.

the june 20 2400s are going for $13. the last time they were at 113. that was at the beginning of the year. a minute to play. final call. you get to go first, carter. >> sometimes trends are overdone. eaton is trends to be done. 3m, that is judged. >> all right. brian? >> thank you for working hard at the desk tonight. but, gm, dead money, call spread, takes the premium. >> i miss you guys. i'm all alone here. except for the plenty of people behind me. mike, your turn. >> yeah, mcdonald's. the options are cheap. purchase a call going into earnings and i also like alphabet, reporting. good value play. >> we have the fed, a lot of earnings as we are talking

about and a lot of action. we will be back next week at this very same time. that does it for options action. we will see you next friday. special tech check starts right now. live from times square. >> ♪ ♪ >> cnbc, living viciously. ty set for ageless skin? (female announcer) find out how in this paid presentation for meaningful beauty. (male announcer) as cindy crawford unveils her newest >> of next, how would you like to get the celebrity secret for ageless skin? radiance recovery duo,dible $110 dollars-worth of youth-revitalizing treatments, absolutely free! (male announcer) and coming up, find out what happens when cindy crawford invites grey's anatomy star ellen pompeo