Investors on a Magic Carpet Ride theyll tell us what it is later, mike ko has a five star uber rating. How will he rate ubers stock headed into next weeks earnings buckle up. Its time to risk this and much more options action beginning right now. Lets get to it earnings season is in full force. Dan says the stock can can injure up some magic when it releases earnings on thursday. Lets get into money now dan take it away back in july it was outperforming the market we have a fiveyear chart this thing had been range bound, finding a lot of resistance for years at that 120 level and it broke out in april when they gave some color about this disney plus service, the streaming service they are rolling out in just a couple of weeks. And so that chart is really interesting to me. You see that island that it spent in the last six or so months trading above 130 kind of interesting setup. When you think about wereings, the Options Market is implying less at 5 in either direction which is kind of double of the average move over the last four quarters obviously, that big move in april did not come at an earnings event but a products announcement when you think the week before the launch of disney plus, my guess is you will not get color on subscribers that investors dont have yet the announcement deal with verizon, its a great deal, unlimited customers in the u. S. Will have one year free of this disney plus service. I think it will be a sticky service. This is at the price point of about 6 this will be a force to be reckoned with. Heres the trade into the report i dont know if 132andahalf is in front of that Earnings Report there is that gap that if there is any disappointment, i think it can get in there. I think this is a name as you head into 2020 that you want Long Exposure for. Once investors are able to model out what subscriber growth looks like and the profitability could look like as they get to tense of Million Office subscribers, i think the stock goes higher. Heres the trick, i dont know if 132andahalf is a great entry point. Today with the stock closing at 132andahalf, i think you look at a risk reversal that would be selling a downside put and using the proceeds to finance the purchase of an upside call. This kind of gives me some room on my entry point. Today when the stock was trading 132andahalf, you can buy the january 120140 risk reversal at 1. 20, buying the january call at 2. 20. That costs me 1. That is my masks risk the stock on expiration is 120 or lower as if i am long 120 shares, long it and have that exposure below 120 to the upside, i have unlimited exposure it costs mae dollar for that heres the thing i have this risk reward i think is very favorable. I think 120 is a level a lot of people will come back and buy it before we get breaking trade, lets go to eamon javers with that reporter President Trump is speaking to reporters on the south lawn a few moments pay go, talking about the stockmarket. The president seeing the rally today as a real endorsement of his priorities as president of the united states. I asked him about his tweet that he had made saying that the stockmarket would be much higher if it wasnt for the impeachment debate going up on capitol hill. The president said he thinks it would be much, much higher if it wasnt for impeachment oddly, the president also told me he believes that the dow went up about 300 points today because of the release ought ukraine transcript, which, of course, was released a couple weeks to ago so the president is sort of tying all those elements together in his argument that the market very much is tracing the fortunes of his presidency he says if he were to be removed from office, there could be a real crash in the stock market the president also talking about some possible locations for his next meeting with xi jinping negotiation on the china trade deal are going well. Not offering new specifics there throwing out the possibly of iowa as a meeting location for his meeting with xi jinping. He says its all about the farmers. The president says thats not a definitive yet its something they are considering, they do need a new meeting location now that chile cancelled the apex summit. The president is working through the list on that an interesting analysis of what happened with todays 300 point rally in saying ultimately because of the release of that uk transcript. Did the president mention the jobs report . Reporter he did, he is enthusiastic about the jobs report and he quoted the old line, its the economy, stupid all right eamon, thank you, eamon javers in washington, d. C i havent heard that that analysis in terms of linking todays record rally in the s p 500 to the release of the ukraine transcript no. Yes. And disney is at an issuing level. I love it listen as he brought up, if you dont have nothing nice to say say nothing at all talk about disney. Lets resume our discussion about disney, dan had some interesting charting. The key is obviously if you get something thats unhappy, have you the risk of a physical fill of that gap and dan is aware of that thats why hes done the 120 level if its put to you it will be at the gap where its extinguished so to speak basically disney has been stuck ever since that really epic breakout and gap on 65 million shares back in april so now the standoff continues. This is the way to get long. Mike in vegas, what did you make of dans trade . Well, there are some things i like about it, if you sit there you have an upcoming catalyst, thats usually not a Winning Strategy he is looking to offsaid some of the long premium he is purchasing, selling some relatively short dated puts. Less than 90 days is the kind of premium im looking to sell. We have seen some gaps lower in disney earnings. One of the most profound was certainly in august of 2015. You are not collecting that much as a percentage of the current stock price. Valuation in disney is trading close to its all time peak. You might not see that in the stock price, why is that theyre taking on a lot of debt. About 40 million of incremental debt on the balance sheet. That is one of the reasons why we might be seeing a higher implied move volatility of the equity will get higher we are seeing that going into earnings, so i like buying the calls there for 2. 20. Im not sure im comfortable at selling those puts at only 1. 20. Lets move on from the Magic Kingdom to sin city. The wynn resorts are up 25 . Los vegas sands up 21 mgm 19 higher the chart master is still feeling lucky rolling out the dice within unof these names you see those numbers, those are market performing number, inline with the s p. Were going to look at lvs and see perhaps there is something setting up which should left hand itself to a pop let me just clear this disney and we will move on to lvs yes and no okay. So there is a bit of a skew and there it is. Perfect show what ive done here first is the Consumer Discretionary etfxly which casino stock is discretionary. We know this lag irrelevanttive to its sector is either a problem or it has been a problem thats about to change and to be something good thats my premise. Lets take a look at this chart another way, rather than a comparative line, this is the relative line, meaning this is lvs on top and relative performance on the bottom now watch, look at the next one, take a look at the following whats happened here i will zoom this in, is that we have now broken above the relative down trend line lets get rid of that, thats an important development. Take a look at the top we have not broken out on an absolute basis weve started to move higher we are outperforming the sector of which it is apart we havent broken out on absolute basis my premise here is that we are actually for the first time now going to rather than fail at this level we are going to break out. Why . Because i think what youve got here is a perfect minor head and shoulders bottom and the setup calls for that lvs long side, simple as that mike, since you are joining us from sin city, why dont you give us a trade . Yeah, so los vegas sands, interestingly, isnt so much a los vegas company. So less than 16 of their overall revenues come from the united states. Less than 15 of the net operating income, comes from the united states. Most of it from macaw and secondarily from singapore so you are talking over 80 of the revenue from those two places and macaw is very important, because we know one of the things hurting this company was there a crackdown on some of the junkets from people from carolina to macaw what they have done to try to mitigate that is they are going more towards mass market the nice thing about mass market, even though they bet much less, the win percent sam higher 30 versus 10 for the higher baccareat players. I want to fund longerdated calls. I was looking at the novemberjanuary 65 call spread. That was going to cost me approximately 1. 30 the idea is those started dated calls which expire two weeks from today, that will offset the that longer date call purchase hopefully next month i will sell more calls and hopefully higher strike ones. So if we start to see this go up towards sky, i will still own those longerdated 65 calls. Maybe i can look to successful 65andahalfs and 70s if we get the rally carter is talking about. I like the stock i am a little uneasy generally getting long stocks or short naked puts here. But i like the stock and i think this is a way we make the play on the trade side. What do you think, dan . He didnt like the down put, that was 90 days out, 10 of the money. I dont like him selling a call only two weeks away a couple bucks out of the money and half a percent from the stock price i dont think it does much for you. If you are bullish the way mike is i think you buy a call. Head to our website, while there, check out our newsletter. Heres whats coming up next. Its been a bumpy road for uber since its ipo, if you are betting this stock will make a uturn on earnings next week, plus, calling out options action fans, grab your phone and tweet us your question at options action. If its nice, well answer it on air. When options action returns. Announcer optiooptions act is sponsored by here, hello starts with hi mple. How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Its got all my favorite shows turn oright there. Boom, i wish my Trading Platform worked like that. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. Welcome back to options action. If you thought disney was the only reporting agent think again. Its a full slate of Earnings Report after the bell monday thats not all the insider locks up wednesday, freeing up shares that can possibly hit the market. If you want to get in on the action, free up your seatbelt. We have a strategy for you mike, what is it yeah, so 2004 taking a look at a call calendar here. You know as you pointed out, theres two meaningful catalyst, there isnt that much of an earnings history in cases like this where you have stocks, where they recently ipoed, very often the earnings tend to be more volatile than they are in subsequent years and investors are better able to digest the news and information that they are receiving. Okay, the lockup expiring is also potentially a big catalyst and potentially can put a lot of pressure on the stock. You know one of the things that causes exceptional high premiums that would translate to a market capitalization move of 2. 7 billion on the stock the point i would make is there is two opposing forces, this is a company burning through a lot of cash. Were not expecting them to turn a profit so i think they could potentially offer some form of an upside surprise, the ought thing is there is a significant highshort interest in the stock, close to 30 of the float. One of the things that does when you have a lot of shorts in the name they could create a measure of support you could create pressure from insider selling. You could create support from Short Covering so those two things might actually mean the stock could move less than a lot of people seem to be anticipating here so i was taking a look at essentially at the money call calendar, the 32 strike, novemberjanuary this was expensive because of the high price of those near dated options. You can spend 3. 10, buy the january calls, sell the ones that expire in one week for 1. 80. Thats a net outlay, the idea is if the stock doesnt move as much as anticipated, you could see decent profits and look for other things to do here. On the flip side, if it does get that big move, the most you will risk is the 1. 30 that you spent. This is a way to move the play get to own that longer dated call if you wish and play for these two opposing forces to potentially mitigate one another. Carter, what do you think personally, i think this is flipping coins when you dont have a lot and i talked about and you also have something that is a valuation vacuum what sit really worth you havent quite settled that, we know it can happen when you see a thing like pinterest or beyond meat and how they can plunge or a more mature stock like twitter, the risks are something unhappy happens, so, obviously, its the way to cope. It is some sort of options trade. Just to go and make a directional outright bet with the stock is that, its a coin toss. Actually, its an interesting discussion i think mike laid out a scenario where it could go either way, if you are positively disposed to your name, this trade could set up okay. But i agree, if mike was coming out saying buy calls, because i think its going higher, thats a tougher sell i think he is taking advantage of very elevated premiums, shortdated premiums, if the stock doesnt get creamed, this works out okay i like the trade from that standpoint i agree, were out talking options trade, i would think about the move they had over the last two earnings quarter. We know the direction that stock has been i dont think the trajectory will change either name on one quarter on a dime and give you an opportunity probably in uber to buy it lower. The lyft on earnings was good the stock action too. That was good, lyft came out earlier than uber to me im more focused on lyft. I think its a better pure play. There is a lot of things going on in uber, some can be good, theyre getting handles on other levels i just dont know when the bottom is. Even lyft after pop popping is giving it back to dans point, i would say uber is better positioned tan many ways. The cost per rides is half of that this is a business where scale matters, fundamentally, whether its lyft or uber will make money, i would never advise you run out and buy any of these stocks the october auto sales race coming in at 16. 58 million and that rate is notable because it is the lowest in six months, this according to auto data. Up next, one industrial stock tested metal against the street and won. We will tell you why that is great news, its friday, tweet us your burning options action. You might get you are your answer on air. Much more options action right after this welcome back to options action. Just last week dan said u. S. Steel would showits metal with a strong range support. The stocks at 2018, if you look at this down trend, it has been something, take a ruler and draw a line right there. Its been bouncing off the 10 a handful of times in the last couple months here shortages of 33 wall street analysts hate it you know, i look at this and i say to myself, they dont even have to say anything good, they just dont have to say anything bad and this stock probably rallies, the 12 calls with 1170. We are offered about 58 cent well, x beat the straights surging 15 so what do you do now, dan so there is a few options here obviously, you can take the profits when its up more than a double do you that in half. If you are still convicted, you let that run, roll it up or out or take the profit it was a good trade. It was a constrarn trade, obviously with the fine risks, it doesnt go this way, sometimes it makes sense to put them in the bank this is the ge, the kraft heinz, something down and down and down and gets a pop. Grab it and go a couple weeks, the rally in the Home Builders might be ready for a breather. Another nice thing about spreads like this out of the money credit spread, they tend to have a better than 5050 probability of profit. The reason for that as we are about to demonstrate is that you can have three things happen to a stock. So we can see here what has happened with pulte. My bet is we had a really strong run coming in here maybe we hit the pause button on earnings specifically the call was the november 39, 40 call spread. Well, after a postearnings pop, pullty pulte is down within have you your spreads on this is now in the money. So actually you are paying essentially to own it. I would actually blow this out on monday and look for another opportunity to reenter it i would say the market string thats this hasnt relatively been as strong as you otherwise may think it would be. For the structure on the options side, its moved along, in terms of the premise, a group thats overbought and needs to rest and give back that part is intact. It is and it is, its had a very bad week for Home Builders the thought that they will quickly get going is not a good get. Do you agree . They have overshot, who knows if rates are going back down lower, it may be a support level for them i dont know up next, final call this piece is talking to me. Yeah . So what do you see . I see an unbelievable opportunity. I see bestinclass platforms and education. I see awardwinning service, and a trade desk full of experts, available to answer your toughest questions. And i see it with zero commissions on online trades. I like what youre seeing. Its beautiful, isnt it . Yeah. Td ameritrade now offers zero commissions on online trades. 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 final call, mike. Uber call calendar is going into earnings and the lack of expiration. Carter. Walgreens, lv dan wow, listen, disney had a really nice bounce off that 200 average moving day well see you back here next friday for options action. Have a great weekend mad money starts right now [narrator] the following is a paid advertisement for the hoover smartwash. When your throw rugs need cleaning, you toss them in the washing machine, easy. If only you could do the same for your carpet. Instead, heres what Carpet Cleaning looks like for many of us hauling around heavy, bulky rental machines. Theyre a hassle. 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