Looks extra flossy ahead of the big fed meeting next week. Hell tell you how to make it rain and beyond meat is up more than 800 from its may ipo im shocked, shocked. So are we but if you missed out on the run, mike coe has a way to buy it for less. Hell go above and beyond on the trade. Its time to risk less and make more the action begins now. And were going to kick things off with a big kahuna, apple gearing up to report next week the stock has soared 20 from its june low, and the Options Market expects an even bigger move after tuesdays results traders pricing in a more than 4 jolt in either direction for those, keeping score at home, that is a 42 billion shift in market value the stock still down from the october high how should you trade it into the earnings dan, you put a bullish bet on the apple right when the stocked bottomed how are you trading it now late may, early june in the Worldwide Developers forum, we were in agreement since they reported the prior quarter just a month earlier, the stock had gone down nearly 20 in a Straight Line. One of the things you mentioned, this is one of the last of the megacap tech stocks. I have my apple, google and amazon this one is obviously squarely in the middle of the trade sort of issues we were discussing to me as soon as the sentiment shifted from may to june, you had this stock up in a Straight Line 10 but here we are now, and ill let carter speak to the charts, were kind of at that gap level from late april. Its kind of hitting some technical resistance if you look at microsoft, you look at amazon, you look at google, its a tale of three cities amazon had as okay print to negative, google had an unexpected good print and it went up allot. Google, alphabet and many, expectations were low, off 10 or so from the alltime highs while the others were hovering around t. The option is implying a 9 monthly between now and next fridays close. On average the laviolette four quarters the stock moved 6 . Thats a heck of a lot of price action for a name this big i actually think that expectations are low they put up a decent enough print into a weird quarter i think they almost have a mull began with the trade stuff i think the stock goes higher. Options prices are probably pretty reasonable enough where you can make an at the money bet to get a break out above that level. The trade is simple to me if you have were bullish and you think it has the potential to outperform the way google had today, you look at august expiration and you simply buy a call today when the stock was trading at 2. 08, you could buy the august 2. 10 call, that breaks even at 2. 14 and a quarter thats up 3 from the current stock price year you youre risking 2 of the stock price the next three weeks i want to make one point tyler, you said it a few minutes ago. We have apple, fed, jobs we have trade. This is kind of an easy way if youre willing to risk 2 on a name that has a big you like that call on calls what we know is that your targeting where the action breaks even is at the 2. 15 level. Thats where the stock faltered on its earnings. Gapd up, closed on the low and took the market straight down. That was the peak for the market we had the may sell off in many cases 10 . So a 4 move would get us right back to the point where last earnings were good and yet faltered and thats your break even do you think it will go much higher than that or do you think its that sort of i think simply, if we have a similar dynamic to what we saw in alphabet where there is some incremental surprise and investors feel like, okay, this is going back to the high, then i think thats the level that you want to target this is actually the key reason you would want to use options in this particular case because obviously we have a lot of macroeconomic and broad market factors at work here. Youre targeting a break out level and because options are relatively cheap to the moves you were identifying, thats the story here these options are cheaper arguably than they should be based on the way the stock has behaved. You can look at it one of two ways one way you can think about it you, youre inclierchd to be long the stock, it could move 6 to the downside, take a look at what 6 of the downside is its more than youre spending on the call option, considerably more youre risking considerably less to make that bullish bet really the only thing you have to worry about here is if apple happens to trade dead sideways to august expiration there are a lot of reasons to think that might not happen. Thats a great point. I want to make one last point. When we do this, were really risking what youre willing to lose these are binary trades. If you buy the dw if youre ln apple, i want to protect myself to the downside. It would only cost you 2 for one week insurance thats not a great thing to do too frequently my point is options are cheap enough whether youre picking a hedge or looking to speculate on a greater than expected move they lineup well especially when you consider the Catalyst Next week lets move on to the dollar, making it rain trarking for the best month since last october with the big fed meeting next week, the chart master says the green back is about to get a whole lot greener. Carter, youve been a very bad boy once again go over and take your punishment all right go over to the monitor and walk us through the dollar index. The dollar is obviously an important its the greatest security of all time i think total value of trade in the equity market, bond market is double that, currency market is double that this is the biggest currency its the most important security, hard stop bar none i think theres more to come here it has had a good month or two, but here is the all data chart this is the plaza cord when governments got together to agree to weaken the dollar interestingly that was september of 85 the dollar peaked in march just that kind of thing. If we were to put in the trend line, what is so important is if you have a well defined trend line and then you break above it, the key here is after breaking above it, it checked back and is now pivoting off the line again that confirms the major reversal thats been underway here for the past and theres so many ways you can draw the lines. You can call all this. The reality is this set up, to my eye, we have more to go lets zero in a little tighter this is the equilibrium. Weve basically been stuck the last 12 months, not a lot of character. I think this is about to get resolved lets draw some lines. This is one way to do it again, an ascending what it represents is equilibrium. There are periods of equilibrium. They dont last. The betting here is the resolution is going to be up and out as depicted there. So now the really short term, just over the past three, four, five months, what i see is a very well defined head and shoulders bottom you see the lines there. At a minimum that projects to the highs, and then we would have our setup here, and we put our arrow back in here, ultimately implying that the vehicle to use is the uup, an etf that captures that is already making slight new highs. Heres your head and shoulders bottom we have already taken out the highs. The set up is good the betting here from my seat is more to come, long u. S. Dollar is there a better ticker symbol, carter, than uup up. Mike, whats the trade here, man . This is one where we have to keep it Pretty Simple. The reason is because options are actually quite inexpensive and this is not a high volatility instrument. So telling premium there really isnt any premium to sell. By way of example, look at the september 26 calls these calls are in the money already. When i was looking at these earlier today, those were about 65 cents they were in the money by about 55 cents urie essentially paying 10 cents if the trade is wrong to the downside below 26. Another way to think about it, youre spending a small amount of money to have up side leverage there are a couple ways you can consider this. There really is only one way to play it and that is to buy calls here it really is. Youre risking less than 2 to have the exposure the next two months we know theres going to be a lot of macro sort of headlines i want to make one more point. When you overlaid that uup versus the 20year u. S. Treasury, pretty correlated. Theyre telling you a story. Bonds have been bid, yields have gone lower the dollar is stuck here in this range, you know what i mean . To your point, it looks like a break out. Put those things together and im not so certain thats a great scenario for stocks either for whatever thats worth. Thats a separate segment. There is a correlation here, the math i son trade the math i son trade, whenever math i son goes to europe, the dollar will sink and the euro will rise. I have no plan to go to europe so the dollar is rising and the euro is sinking. Follow the mathisen trade. We have much more options action ahead. Heres whats coming up. Welcome to good burger, home of the good burger can i take your order . Announcer its been a sizzling week for shares of beyond meat. Mike coe has cooked up a way to buy the hot stock for less youll have to see it to believe. It plus, calling all options action parents. Reach into your pocket, not your phone, and tweet us your question at options action. If its nice well answer it on air. When options action returns. Mno kidding. Rd. But moving your internet and tv . Thats easy. Easy . easy . Easy. Because now xfinity lets you transfer your Service Online in just about a minute with a few simple steps. Really . Really. That was easy. Yup. Plus, with twohour appointment windows, its all on your schedule. Awesome. Now all you have to do is move. That thing. [ sigh ] introducing an easier way to move with xfinity. Its just another way were working to make your life simple, easy, awesome. Go to xfinity. Com moving to get started. Im not really a, i thought wall street guy. Ns. 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 welcome back to options action. Beyond belief . No, just another unbelievable week for beyond meat lets go to aditi roy with all the details. No doubt its had an incredible lead up to the results, this week along the stock is up 33 of and since the companys ipo, beyond meat shares are up more than 840 making it the best performing ipo this year. Its current market cap is about 14 billion. Thats as big as food giant conagra. Bigger than mole son coors triple the size of macys and foot logger. Despite the skyrocketing price, interest in it is still high, 16 of the float keep in mind that number might be skewing higher since its before the lock up expiration coming this fall that puts it bigger than most of the ipos including pinterest, uber and lyft, but not zoom. Theyre making deals with dunki Dunkin Donuts and carls jr well look for big names when the results come out tuesday thank you, aditi. If youre looking for beyond meat for less, we have a tasty treat, cheap meat. Take it away, my friend. I dont know whether you should substitute beyond meats impossible burger for the burger you would otherwise be eating. But i can tell you for sure that you should substitute an options trade for this stock if you currently hold it because were dealing with a very highflying and exceptionally volatile stock here that high Short Interest is one of the signs, and we have many others, that there is something a little bit fishy going on here were in the midst of a short squeeze. What were definitely going to try to do if youre still inclined to be long it, is to do so at a lower cost and to risk less and i will tell you that the Options Market right now is flashing some significant warning signs. And if you take a look past october 29th, which is when the lock up for this stock ends, thats when it gets particularly dire were going to take a look at a trade first lets look at the price of options we can see right here its hard to put this in context we can see its moving around a lot. That is 110 thats the implied volatility. This is essentially unheard of we dont look at stocks that have these types of option prices, off the charts so is the stock. We tauld about a call spread for owning the stock that call spread doubled a couple months ago. Remember the strike of the call we called, 140 the stock was trading almost 240 today. Absolutely remarkable. Lets look at the trade here all right. What we are trying to do here was we were looking to sell the 150 puts, buy the 235 calls, and sell the 260 calls you can do that whole trade for no money, okay what does this tell us were going to get profits from 235 up to 260. And if you end up having to buy the stock back that you replace with this trade, youre going to own it at 150. Thats an 85 discount to where the stock was trading right now. If youve seen a run like this and youre thinking, i still want to have some up side exposure, can you not think about taking some of it off after weve seen a run like in at the very least say, okay, ill take the risk and buy it back 85 where it is right now if you own the stock you want to start substituting options for it thank you and work your way back dan, what do you think about that its interesting, mike is talking about a lot of technical dynamics this is a weird situation, a 14 billion market cap for something people dont know what to do whats really important is you think when all of these headlines weve had about all of these partnerships at some point that will revert the other way. You will have some of these guys dump the product because no one wants it thats one of the reasons why all this uncertainty is causing this tremendous implied volatility the price of options the at the money straddle, the call, the stock at 235 is worth 45. That is the implied movement between now and next fridays close. Thats telling you options traders have no idea which way this is going to go and theyre not willing to really price risk accordingly. Take a look at the price of the straddles that go out further in the year, november or 2020 were dealing with straddles over 100. Heres another interesting thing. Look for the strike where the calls and the puts are the same price. That essentially tells you what the forward price of the Options Market thinks. Right now the january 185 calls and 185 puts are priced about the same so what the Options Market is telling you is it thinks there is serious danger, and the stock could go lower, maybe considerably lower the point you make about people not having a clue, thats the function of crisis cover theres no way to model it except extrapolating minor trends with the r not a lot of data its all hope after that here is on the screen a fairly well defined chart, 60minute chart since its ipo. You can see it tracks its trend line beautifully you can also see it is fairly far above that trend line. At this point the word trim comes to mind. Take action, do something before, as they say, someone does it for you. Meat substitute, stock substitute you definitely want to substitute options for stock here mike, thank you very much coming up shares of tesla hitting the skids, down more than 11 on the earnings report. But well tell you why that is great news for one of our traders. Plus its friday, so you know what that means. Tweet your burning questions to our twitter handle at options action. And i may just let the traders answer it on air youll have to tweet and find out. Dont go anywhere. Theres much more options action right after this indistinguishable muttering that was awful. Why are you so good at this . Had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at Td Ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom mad skills. Education to take your trading to the next level. Only with Td Ameritrade. What do you look for i want free access to research. Yep, Td Ameritrades got that. Free access to every platform. Yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. No hidden fees. No platform fees. No trade minimums. And yes, its all at one low price. Td ameritrade. Welcome back to options action. Time to take a look at a couple of our open trades just last week dan said tesla could be headed for a crash. If it youre long this thing, you might want to consider some protection because if they do tweak down that fullyear guidance in any way, shape or form, maybe its margins, maybe full year deliveries, that stock is going down maybe toward 200 to me its a Pretty Simple trade. Stock was trading 259. You can buy the 250 put spread that was just a week ago, and that stock is off, dan, 11 since then you must feel pretty smug. No, i dont, i get a lot of things wrong as our viewers know we already knew what the q2 deliveries were. There was skepticism about the margins they disappointed on margins. They did not take down another full delivery. The stock has gone down 35 bucks or so in the last weekandahalf. I think you take that tradeoff, it costs 9, its worth 21 or so. I think there are lower lows it becomes hardpressed as it gets some support. Ill go to carter. You made the call of the century june 3rd when the stock was 175. You said it was about to ricochet i loved that call. I was looking at the level around 250 saying i think thats a great level to put it back out. We sort of navigated this well and now to some extent its a pair of twos there is not a big hand, meaning a stock that goes from 175 to 266, up 50 off its low, a stock that basically had crashed going into that, and then fails dramatically with a gap on news as its just done, its now at an equilibrium price where probably spends a lot of time backing and filling and theres no great actionable trade. Meaning there are times when you can make big bets. I would say this is a time tochbl a big bet i would look for an opportunity when it gets frothy again in front of a catalyst where they have the potential to possibly lower that full year delivery guidance because that can set up as a good trade lets pivot to Facebook Mike said facebook earnings would set the stage for more gains going forward. Listen going into a catalyst like earnings which youre going to see the near dated options higher premiums, we do see that. The other thing i will point out is that longer dated options often arent affected quite as much i was looking at the august 205, january 2020, 2005 call spre5 c. That will be laying out ten bucks. Facebook spiked on the earnings its where it is friday. What do you do, mike id stick with the trade. Its working out whats happening is the near dated options the trade was up slightly even though the stock is down slightly its kind of working the wait we want it to when august rolls off or they get exceptionally cheap, were going to roll out and sell another call against it. Get into synthetic carter . My hunch is to say the same thing. We know that facebook, one of the big, big names people are counting on, its the one with netflix that essentially didnt deliver. Not necessarily its fundamentals, but price action was tepid. But now that thats out of the way, it doesnt feel here as though there is a lot of directionality to it i would say this becomes a dormant asset. Its been surprising, its volatile if you looked at last july the company had the huge gap, the largest one day market cap loss, estimates for the next year just got destroyed. And now were all the way back here a lot of people thought it would get back up to the prior high. The fact it didnt, we face regulatory issues, forget the ftc thing. Thats one thing the other thing, i expect you see the stock around 200 in a bit. Lets take another break. Up next, your tweets and the final call i dont know whats going on. Ive done all sorts of research, read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with Td Ameritrade. Wthats right. K pretty disappointed. Buckle up. There he is. Im not really a, i thought wall street guy. Ns. 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 welcome back to options action. It is time now for the final call carter, what you got the dollar, i mean, the invesco dollar etf, uup, it looks poised to move higher despite already moving higher. We talked about that ticker symbol, the u, p i love it. Mike buy the uup sep 26 calls. If you were going to buy 2700 worth of uup, would you spend 10 to insure it below 26 . Buy the calls instead of the stock. Sir the apple, last megacap one, sets up pretty interestingly if youre inclined to think it breaks out of this range, the at the money calls in august make sense. Have a great weekend, gentlemen. Really fun to have you here. I had fun with each of you that does it for us on options action. Do not go anywhere because mad money with mr. Cramer starts right now. The following program is a paid commercial presentation for total gym fitness. [music] everybody work out. Feel the energy. Build a better body. The best you can be. Another body easy as 123. Oh. Ahh. Better body as easy as 123 with total gym
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