Lesson and this stool with an atomic number of 29 tony zhang has a play that will see you through. Its time to risk less and make more options action starts now. A news alert. Lets go to leslie the deadline is not until monday, but we have seen a couple of filings hit this afternoon. The third point filing is out. Interesting move notably increasing exposure to chinese plays. Alibaba up he increased his stake in facebook to almost 300 million. And keeping his stakes in microsoft and pinterest at the same level and he bought a stake worth 21 million and good rx worth 27 million. As with all of these filings, these stakes and values are as of the end of the quarter, in this case end of september and may have changed in the six weeks since. A lot has changed for some of those. Mike, i dont know where you would go i was thinking about alibaba and how much market cap it lost. Thats an example of how greatly things can change at the end of a quarter when they are filed versus now that was a big hit on chinese stocks, generally the tech stocks, what happened there. But it is also a situation where if somebody liked the name, a lot of the stocks were hard hit. It is possible they took that as a reason to change direction, but also possible that they took that as an opportunity to add to positions if they think the position could and will change in the next 6 to 12 months carter, what is your take on some of the position changes that is probably the best one, alibaba, a meaningful giveback it is an excellent entry point if you are involved and have already taken a hit, stay. Did you know because of the vending industry and counterfeit industry, there is a law that prohibits redesigning the 1 bill, but there is also another law about the dollar bill. And that is gravity. Take it away the dollar is under a lot of pressure gravity as you say there is always a reason why some people say its the ever widening deficit some say savings is too low relative to national income. Which it is. Only about 1 1 2 versus 7 the first chart, there is your u. S. Dollar index. I have annotated it with a double top there was a peak in late 16, early 17, we approached that and failed this is the same tenyear chart, 2010 to 2020 and we have broken a trend. Next chart, two welldefined formations, a double top, break in trend and a draw on the arrow, every indication we are heading lower. Longterm chart. This is data going back to the 1970s. We are working into the apex of this wedge, if you will. This kind of thing usually sets up for something considerably worse. So the uup is the trade, but first a shortterm chart of the dollar you can see the breakdown potential and finally the uup, to put on the trade. We think this will break and break sharply. Mike, whats your two cents my two cents will only be worth about one cent by the time this is said and done. We had other symptoms what is going on with the dollar this week everybody has been talking about bitcoin, but that is symptomatic of the larger issue. The situation we find ourselves, none of those reversing in the near term. If you are looking at trying to trade with options, currencies tend to be low volatility. Thats good news in one sense. Options are relatively low priced but it makes it challenging. If you are looking to sell options out of the money, there is almost no premium these tend to play out over a longer period of time. I was looking out to march when i was looking at those today those would cost about 45 cents so less than 2 of the uup, but in a currency basket, that could be quite considerable one other thing i would ask people to Pay Attention to compare those march options to the january puts as well essentially you were paying an extra 14 cents to own that, mitigate mitigati mitigating decay, giving ourselves time to look for opportunities potentially spreading the roll tony . As carder said, we are not in the why business, but for investors, one place to extract a view for the dollar is looking at the fed policy. The fed has been advocating for strong fiscal support, the Monetary Policy to continue the economic recovery. From the current perspective, a large fiscal policy is unlikely. There is a net negative for the dollar if you take that into account and look at uup as an etf, it has been in the range since mid july you have a break down before this 24. 80 level. And it breaks at 24. 55. So substantial downside. I like mikes trade and him going out to march buying him quite a bit of time. If we below, you will have a good lets look at it. What emerges next . Before we look at the charts, lets discuss it if you have a weakening dollar, many emerging economies are debt heavy and they have borrowed in dollars and a weakening dollar reduces their debt a weak dollar helps commodities. Many are dependent on Foreign Investment and a weak dollar helps. Emerging markets, no judgments on that chart. Next chart we have a welldefined breakout much to think the s p has yet to clear a welldefined up trend. So we have broken out above the apex of the triangle, free to move higher. Mike, how do you trade emerging markets from here taking a look at eem. This is a follow onto the conversation about the dollar. This is particularly true of eem. Eem is not a currency haej etf we have data out of china that looked relatively strong we have this dichotomy going on with the pandemic. Are we going to see follow through on good news with the vaccine or see an upsurge in cases . What is good for china is good for markets generally, etf but we have come so far so fast and any bad news for the market will affect that as well i was looking to january you could spend about 60 cents, spending a dollar. Thats a net debit of 40 cents thats more than we would like to pay sometimes i think thats well justified here because, number one, as we just pointed out, we have seen such strength already and sometimes paying a premium is justified. I think it is here tony, do you like this trade . I do. If you look at eem, you understand there is exposure to china, taiwan and korea they have only about 200 cases a day in coronavirus for those three countries life is going back to normal. From a sector, half of this is transgression ri when you couple that with an eem at 46 and couple that with a weaker dollar, the exposure in this etf, i think eem can be substantially higher over the next 6 to 12 months. While i like mikes trade, i understand he was trying to reduce his risk. The call option is reducing the risk of the trade by 40 as opposed to outright buying the call options but because i believe there is substantial upside, i would prefer to go out to february and spread this. Mike, a quick comment on tonys alternative trade i think thats a good play. I will tell you why i chose that to sell, actually. That is probably more tonys domain than mine, but i was looking at technicals, and it seems to me that we fell off a level around 51 of eem not that long ago generally speaking, when you have that kind of experience, you will run into overhead supply that is longterm bearish or resistant type of thing. We are only looking to january so we are looking at that as a pause point. Thats the reason i was willing to sell that call. We have to take a break this is what is coming up next ic. Conduction, construction, plumbing copper can be thought as the global thing in economy. If the world wants it, you should want it, too. And tony shouting mine, mine, mine plus options fans, reach into your pocket, grab your phone and tweet us your questions. If its nice, we will answer it on air car vending machines and buying a car 100 online. Vented now weve created a brand new way for you to sell your car. Whether its a few years old or dinosaur old, we want to buy your car. Go to carvana and enter your license plate, answer a few questions, and our technowizardry calculates your cars value and gives you a real offer in seconds. When youre ready, well come to you, pay you on the spot, and pick up your car. Thats it. So ditch the old way of selling your car, and say hello to the new way at carvana. Welcome back we started broadly with a dollar now et cetelets narrow it. The atomic number 29, symbol cu, obviously its copper. Tony, lets cu you got. See what i did yeah. For investors who didnt chase this, i think you have an opportunity to seek Long Exposure if you look at a chart, copper to gold ratio. This is a twoyear chart copper has largely underperformed if we zoom into a sixmonth chart we see the copper to gold ratio break above the moving average. And this last week it broke out a major resistance level from an indicator perspective, what gives me confidence in is the shape and recovery of the Global Economic recovery from covid19 this is a chart, a stock all over the place this stock peaked around 20 down to 4 in four years. Now its just on the verge of a breakout at the 20 resistance level. I see a target of 24 in the next two to three months so the trade structure reflects the 20 upside target for fcx and volatility rates are low over the past 52 weeks so the trade structure is going out to february, giving me about 90 days worth of time and buying the 20 24 vertical netnet here paying about 1. 25 which gives me about a 6 move in order to break even on this tone i feel like tony didnt like the period oughtic table humor, but i think you did. I did appreciate it and i like the trade, too. There arent a lot of places right now where you have a lot of tail winds and valuations that dont look too stretched. I think this is a good entry point. Given all of the things we have talked about, options are the right way to do it quick thought, carter the incredible thing is on the low, pandemic low it was below its financial crisis low and now its up. The race for covid vaccine. We map out a path on moderna, next its a thirteenhour flight, thats not a weekend trip. Fifteen minutes until we board. Oh yeah, we gotta take off. You downloaded the Td Ameritrade mobile app so you can quickly check the markets . Yeah, actually im taking one last look at my dashboard before we board. Excellent. And you have thinkorswim mobile so i can finish analyzing the risk on this position. You two are all set. Have a great flight. Thanks. Well see ya. Ah, theyre getting so smart. Choose the app that fits your investing style. 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. Time to look back. Several weeks ago we laid out a bet on japan this is a low volatility etf. It is slightly elevated like many global indexes. I was looking at the january, calls. They were about 65 cents and selling november against it at 20 cents net, net, you would be laying out about 45 cents since then this trade was worked out mike, what is your move now . This went right to the stripe we put on. What you want to do with the short calls is cover those hang on to the longer ones that hangs on to all of them we had in november. Cover the calls if they are in the money. Promise of a vaccine. Big news from pfizer we will lock at another player as well. We will be back after this m jus. Thats why Td Ameritrade designed a firstofitskind, personalized education center. Oh. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. 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Ho ho ho, yeah need workers comp insurance . Get a quote in 3 minutes at easyaspie. Com. Welcome back we have some blockbuster news in the pharmacy front pfizer said its vaccine was 90 effective. Mike, you saw some interesting action in moderna which we should mention that in the rose garden press conference, the doctor said he expects data from moderna in the next few days they saw more than three times action we have what is going on next week that is a potential catalyst the 90 strike calls, 100 strike calls and even 105 which expire a week from today. Stocks who have moved this much, people who want to use this bullish play are trying to measure it carefully and using options to do it what did you make of this action action, tony i didnt see this action. But just like with pfizer where the stock is trading back where it was before the news i think it will be the same with moderna. I am not one who will chase this do the charts of the vaccinemakers look okay, carter . They are starting to separate the winners from losers. Several vaccine related stocks are down sharply from their highs. This was the first to come to life when covid hit the market capped down february 24. Moderna went from 18 to 30, but it looks like it will take out its highs. I like it a lot. What, in your view, is the best way to play positive vaccines because it may not be a vaccine maker at all we have spoken about this before the etf was one of the things carter mentioned maybe disney this is a stock thats been under considerable pressure and may see light at the end of the tunnel it is the hardest hit stocks that have the best opportunity time for the final call carter, what do you say . Short the dollar and long in merging markets eem. Tony . I like copper on the Global Economic recovery. I am using the call debit spread give yourself some time when you are trying to put those puts on you can cause calls or call spreads to use you my mission is simple to make you money. I am here to level tl plain field for all investors there is always a bull market some where and i promise to help you find it. Mad money starts now hey, i am cramer welcome to mad money. Welcome to cramers america. I am trying to make you some money. My job not only to entertain you but to educate and teach you, call me at 1800743cnbc or tweet me jim cramer talk about a market that has no memory yet it
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