Carter Worth And Mike Khouw's BlackRock Trade

On CNBC's "Options Action," Carter Worth of Cornerstone Macro spoke about BlackRock, Inc. BLK. He said the asset management stocks have significantly underperformed the S&P 500 since 2018, as they had no gains in the last three years, while the market gained almost 40%.

BlackRock is one of the asset management stocks, but it managed to outperform the market and it is now trading significantly above its 150-day moving average, said Worth. He expects the stock to move lower and he would take profits in the name or take a short position.

Mike Khouw is not inclined to short the stock, but he wants to sell a call spread in BlackRock. He wants to sell the January $710/$740 call spread for $9.50. The breakeven for the trade is at $719.50 or 3.50% above the closing price on Friday. The maximum loss for the trade would be $20.50.