Way to make money in apple if the stock goes up, down, or nowhere at all i dont believe it. Is that possible it is possible and hell show you how to do it its time to risk less and make more the action begins right now. After lagging the market are year, suddenly, stocks are showing signs of life. Surging 5 as oil hit 60 should you stick with Energy Heading into the new year . Mike when you take a look at the entire space, you know, its the integrative names at the top of the list they represent the largest constituents of that index and as oil prices rise, theyre essentially a big bucket of oil themselves the oil service names, i like that space a lot i have even when oil prices were lower because weve seen a lot of basically the fracking businesses have been able to make money, innovation in that space, helps it Oil Service Companies more than anybody. I think you have two things going on in the oil business right now. Weve seen crude get above 55 a barrel thats been key for the oil names, for the fraccers and whatnot. Thats been a big boost. Once we cross that 50 mark, thats when xle and all the individual names start to take off to the up side the other thing you have with the brent and wti spread that we continue to see at 7 a part that is very good for u. S. Based companies to export that oil overseas and make profit there and obviously a bunch of those top 10 holdings are the kind of names youd like to see get the profitibility with that. They did not move when oil first moved. Now theyre playing catch up with oil sitting at 60 i love names like occidental they are the top ten holder in the xle. Carter, head over to the board and explain. Energy worst performer in 15. Best performer in 16, now bottom of the barrel in 17. Its volatile stuff and if you get it right, you win, if you get it wrong, it hurts so you got two lines they speak for themselves. I want to look at the spread between the winner and the loser. So over the past five years this is tech and this is energy youre talking about well, almost a 10 bag or spread. Lets zero in tighter. Heres the past five years and this is telling. Lunch. Not only lunch down a little bit versus tech. 40 spread on the year here comes the year to date chart and well look at a few others this is well, this is the chart we just had. Its the same spread lets go on to the next and see what we pull up here okay so now weve got the year to date this is incredible the question is what i think youre seeing here is a little bit of a hook down and a hook up and i think thats the beginning of something ha is going to be more enduring. Here is another way to look at that chart we just looked at this is the tech sector on top and this is relative performance to the biggest sector to tech. Energy on top. Here we go this is the key to the whole thing. S p 500 energy, which, again, has all the luck of a bottoming out. Not only is it going up, its starting to outperform the ver thing that dominated it market its a bottoming out action. Lets go to the chart itself heres a fiveyear chart you can draw the lines this way. Weve clearly broken above trend and thats an important development. Thats energy and now take a look at this and this is the whole story, right . Brian was just talking about it. Youve got crude oil and youve got energy the presumption is Energy Stocks will go the way of crude i think you want to over weight this in 2018 mike, how do you trade this the way i look, you could look at the march 72 call, spend 2. 50 for that the options are quite cheap here, a volatility off of an alltime low of 13 . So, the options are quite inexpensive here the other reason you dont reach out and buy the stocks is more tan 20 higher if you go out five years, five year crude is lower. So we have this inverted curve a lot of times people will say that is bullish when you start to trade than in a more normal tangle where the front month is lower. But the fact the elongated stuff hasnt gone up is why the integrated space isnt my favorite right now we have a Global Growth plate going on right now in the oil markets. Its giving a boost to oil like i talked about over the 50 55 an a barrel oil spot, these are going to do great. When had volatility is cheap and you want to play to the upside, buying a call outright makes sense because its a cheap premium to take a shot on that i think its a real play i think theres a lot behind it. Look still coming down the pipeline coming up the saudis need the price of oil to be higher thats all been a boost. I think oils here to stay above 55 in that case, you want to be in xle. And if you want to be more aggressive, 40 weight, you go after halliburton or you fade vulairo which is at all time highs which is the defensive of all. Mike, last word youre spending 3 if it long end goes up higher and you can see more volatility. You can always spread, thats the thing. So if we get a rally, you spread. Lets move on here. You hear that sound . That is the sound of volatility this year. The vix hitting alltime lows in what has been a quiet year for the market bob is breaking it down from nyse hi, bob. One of the most Extraordinary Development was the continued run of low volatility. S p 500 had a total of eight days this year in which it moved up or down more than 8 . The s p 500 had 78 such days 39 in 2014 with such low volatility its no wonder the traders vix stayed low it averaged 11 thats it lowest on record the average in prior five years was almost 16. They traded under 10 a total of 92 sessions in 2017. So why exactly is volatility so low . You could partly site the fed and global bankers which hav kept rates low, you could also say strong earnings. There are also longer term forces that may be at work for example its possible, likely even i think that the growth of passive investing is playing a part in tamping down volatility overall Trading Volume has been lower than average for several years. Back to you melissa and happy new year to the whole gang thanks, bri on. So, brian is a volatility expert on the desk tonight. How are you trading it i think whats going on is really intertsing. He makes cases in the flow into the market thats limited some of the volatility. But i think its the pension on the institutional side when you look at something called the skew index. Okay that measures the price of the puts the demand for puts on the down side relative to calls that is at record highs. People are buying insurance despite having no volatility anytime we get a sell off in the market, the protection is at play we get stuck in this range here. And i think thats why we have such low volatility. I think thats why the market continues to creep higher. When you talk about passive investing, one of the things that can cause it to decrease is dispersion, one stock gos up and the other goes down. People rotate from one stock to another. Passive investing doesnt work like that. It flows into the market, people buy everything, rising tide lifts all votes. When i see that high skew index, what it tells me is when money starts to flow out of the market it will do it basically in a mass liquidation and youll see an increase in correlation and i think thats what accounts for the fact that theyre trading at a bigger premium and just to put it in numeric form, not volatile actions, and this one, weve gone 286 sessions without one the third or fourth longest on record going back to the 20s. It doesnt happen january 1. In 2016 the market went up you could easily get a calendar switch theres nothing wrong with pull backs. Theyre the only thing that allow a mark toot go higher. You definitely want one at some point. There seems to be an assumption that because volatility was low all this year, its gone higher is that your thinking as well or can it remain this low thats been my thinking for quite some time and it hasnt happened, right . Whats going to happen is i think we need one or two quick shakeouts before we can get a more significant shot of the downside or see people reach to the calls at the upside. Have shots with leverage to the upside we just havent seen it leverage plays to the up side that would get people over leverage and shake us out one of the reasons people always think volatility is going to rise is because its always been about 15 therefore, it should go back to where it usually is. Were talking about fundamental changes which suggests the mean itself could go down so it wouldnt surprise me if we continue to see what historically, we characterize as low volatility for everything options action, check out cnbc. Com while you are there, sign up for our super cool newsletter. How else would you ring in the new year heres whats up next. Worried that could happen to apple shares next year we have a way to buy protection. Plus, calling all options actions fans reach into your pocket, not your phone, and tweet us your question at options actions. If its nice, well answer it on air when options action returns. Logical see thats funny, i thought you traded options. Im not really a wall street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade well, itsonce again. Eason yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from Td Ameritrade. Welcome back to options actions. Tech has been one of the hottest trades of the year but there are signs popping up there could be trouble in paradise josh is breaking it down from san francisco. Hi, josh melissa, tech was the best performing sector in the s p 500 this year by a long shot, a gain of 37 put that into perspective. The silver goes to materials with a gain of 21 facebook, amazon, netflix all up more than 50 . Apple up 46 alphabet tacking on more than 30 . But now attention turns to 2018 and some are betting on a fall take a look at the short sellers. They have painted a bulls eye data from s3 partners shows which spoks, professional managers are short selling the most on absolute dollar basis. They say apple, amazon, intell, netflix, microsoft, alphabet and facebook have some of the highest levels of no show Short Interest in the market they make money by betting against companies they taing are value. And the one stock that has seen its Short Interest rise it most into the year end is apple in the past 30 days its Short Interest increased over 1 billion, bringing the total to 1. 8 billion on an absolute basis. Strategists are underweight bu theyre concerned about crowded positioning among other worries. Melissa, back to you just to be clear these are absolute dollar terms. So the bigger the company is, like an apple, it more likely it will have a greater dollar amount of Short Interest, correct . Thats correct. Okay. Josh, great reporting, thanks a lot. Josh lives in san francisco. If youre worried any of these stocks koulds take a hit, what should you do . Take it away, mike were going to take a look at selling a call spread. Why do we like to do these number one they have a higher probability of profit than simply selling out right secondly they can have very attractive risk reward relationships and finally this is something you can do whether you hold the stock or not. So the stock, heres your teaser on that is apple and we can see obviously here that the stock hasnt performed that well. This iphone x, the iphone x is one of the reasons it was seen as cheap they thought of as exceptionally cheap and if this thing doesnt sell 50 million units, maybe we decide. Net net, 2. 20 thats a nice, risk reward relationship if it sticks here, drops or rallies to 170, you have profits if it goes slightly higher it is above where you see losses brian, what do you think of the trade . It makes a lot of sense to look at some of these names that have such a great run in the and maybe make short bets to this so im looking at the 169 level as a key support level at apple to Pay Attention to. We break there starting it new year, maybe we do want to put this call spread on. Because certainly there could be more down side to this thing theyve had had had such great runs having said that you talked on fast money. The u. S. Technology sector is a place to be. I dont think you get completely out of it. I think thats why mikes doing a short call spread. Right and also, the thing about Short Interest rate, its not so much the dollar value, its the ratio of the shares outstanding. If you look at apple, amazon, facebook, google, theyre all below two and theyre all about 12 to 17 thats the shortage in the spy theyre just market shares the question is and we talked about it a little bit last night. Apple is the market. If the markets in trouble, apples in trouble and vice versa. In a way its defensive play based on evaluations and based on its chart theres nothing wrong with the price. Amazon, alphabet, they are companies with other tail winds behind them that apple does not possess. Still ahead financials on fire will the trade last . Someone at our desk has a warning sign for you find out what he is seeing end the year right with one of our traders answering your question live on national tv much more options actions after this see thats funny, i thought you traded options. Im not really a wall street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade well, itsonce again. Eason yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from Td Ameritrade. Welcome back to options action we have a news alert on riot block chain. Riot blockchain ceo selling around 30,000 shares, cutting his stake in the company by 1 3. That, according to the latest sec filing a biotech recently renamed itself to better reflect its new venture into blockchain. Back to you. Thanks. Actually the information i have is that he owns 12,500 after selling 30,000 shares. So thats the majority of his stake. Thats 12,000 shares too many whats remarkable is the little skin he had in the game thats less than half a per cent total, even presale. The optics of this is that this company used to be known as bioptics changed its name to Riot Blockchain the stock sky rockets. Weve asked him to come on fast money. They said they could not find the ceo, nobody talked to him in days and now hes sold the majority of the shares he owned, the night before new years day. If it looks like a duck and walks like a duck, dont touch this thing the optics on this are terrible terrible if you are listening, come on. Shifting gears carter and Company Warns of a Bank Breakdown theyve made no progress. Flat on a relative basis financials have not paid you in fact, negative alpha, so to speak. They are good for financials very benign in the environment i was looking at the spread in slf you can spend 35 cents for that. Since then it is up about a per cent mike, how are you managing that trade . Well, you know this is one of the reasons when you were looking at this. Thats only 10 cents today and consequently is worth 30 now and considering it would be worth as much as two and we have until march, i say you stick with it the problem with banks is the rate environment is not on their side you can talk about the short and long end but basically theyve underperformed all year until a spurt at the end and banks have underperformed i think its dead money. Dead money . Quickly, shouldnt the environment, overall, change next year . If thats it case, if the market is thinking that, shouldnt it be priced in . And you talk about the fundamentals and yes, some of the regulatory if environment will be favorable for the banks here you look at it two year, 10 year is starting to narrow. That is not great for the banks. And if we continue to get a rising Interest Rate environment, you get the inflation or reflags, by the tax code that got passed now you got Oil Prices Moving higher we get a couple good jobs numbers, youre going to see the front end of that curve continue to move up that will be bad for banks up next your tweets and the final, final call of 2017 from the options desk stay tuned see thats funny, i thought you traded options. Im not really a wall street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade hello there friend hi hey there. Im an Imaginary Friend of a kid just like you. Youre going through a lot right now and i know youre scared. But youre stronger than you know. But look, well get through this together. And remember. We at the Imaginary Friends society always have your back well, itsonce again. Eason yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from Td Ameritrade. Welcome back to options action time to take your tweets our first tweet is from mike who asks i bought out of it money mrk. Their Earnings Report coming up. Do you like mrk . I dont like mrk that much but if i was going to make a bullish call, calls are it way to go. This is from a familiar twitter handle, producer kristen and shes dying to know what you drink on new years eve . Champagne and water long spain and spy. I think we got a little bit to go carter . Xle energy get along. Mike . Call spreads on apple happy new year, everybody thanks for joining us. Mad money is up next [narrator] the following is a paid advertisement for the 3 week yoga retreat. Brought to you by beachbody. Are you a woman of a certain age . If you are, pull up a chair and sit with me, because this is for you. Im Leeza Gibbons and it was a big year for me, i turned 60, and im all about aging gracefully with empowerment, and all of that, but lets be real, there are some parts about getting older that are just hard. All the symptoms of menopause from a to z, i have them. My body is changing. Im not as flexible as i used to be