Atomic number of 29. Tony zhang has a play that will cu through its time to risk less and make more options action starts right now. We start with a news alert. Lets get to leslie with some of the details. Thats right. 13 app deadline is not until monday but weve seen a couple of notes hit the third point filing is out. He made interesting moves in the tech world increasing his exposures to some chinese ecommerce plays alibaba, upping that stake by about 26 , worth about 742 million at the end of the third quarter. J. D. Com, upping that stake by 37 to about 345 million at the end of the quarter in kind of the faang spaice, increased his space on facebook while keeping in kind of other u. S. Tech world, keeping his stakes in microsoft and pinterest at the same level. He also took stakes in two ipos palantir he bought for 21 million and goodrx worth 27 million. As with all of these 13 f filings, the stakes and values are as of the end of the quarter, the end of september and may have changed in the six weeks since. Leslie, thank you a lot has changed for some of those in particular. I mean, mike khouw, i was thinking about alibaba and how much market cap it lost after the suspension of the n financial ipo. Thats how greatly things can change from the end of the quarter when theyre filed versus now yeah, that obviously was a big hit on chinese stocks. Generally the tech stocks, what happened there but it is also a situation where somebody really liked a name, you know, at the end of that quarter, saw that news a lot of those stocks are hard hit. Its possible that they took that as a reason to change direction but its also possible that they took that as an opportunity to potentially add to positions if they think that the situation could and will change at some point in the next 6 to 12 months carter, whats your take on some of those position changes well, i think you talked about the best one baba, thats a meaningful giveback, right down to trend its an excellent entry point if youre not involved if you are involved and youve already taken this hit stay all right lets get back to options action now. Did you know, because of the vending industry and counterfeit currency industry theres a law that prohibits redesigning the 1 bill. That is true but theres also another law thats governing the dollar right now, and that is gravity carter will explain. Take it away thats right. Before we look at some charts, the dollar suris under a lot of pressure, gravity. Theres always a reason why. Im not really in the why business but some say its because of the ever widening account deficit. And some say the National Savings is too low lets look at the charts the first chart, there is your u. S. Dollar index. And i have annotated with a double top we had a peak in late 16, early 17 and reapproached that this year and we failed right there look at the second chart another way to draw the lines. Its the same tenyear chart, 2010 to 2020 you have two welldefined formations ive drawn the arrow there theres every indication that were heading lower. Now a longterm chart, this is all data looking at the u. S. Dollar going back to the 1970s and you can see here were working into the apex of this wedge, if you will and this kind of thing usually sets up for something considerably worse so the uup is the trade, but first, heres a shortterm chart of the u. S. Dollar and you can see again, the breakdown potential. And then the uup which is the etf to put on the trade. We think this is going to break and going to break sharply mike, whats your two cents yeah, so my two cents will only be worth about one cent, i think, by the time this is all said and done. We had some other symptoms with whats going on. Everybody is talking about bitcoin. Thats symptomatic of the larger issue. If you look at the secular trends, the Current Situation we see ourselves sees none of those reversing in the near term theres something you want to Pay Attention to currencies tend to be low volatility thats good news in one sense. Options tend to be low priced relative to the price of the underline. But it makes it challenging when it comes to spreading. If youre looking to sell options out of the money, theres almost no premium there. These trends tend to play out over longer periods of time. I was looking at all the way to march. The at the money 25 strike puts when i was looking at those earlier today, those would cost about 45 cents thats less than 2 of the underlying uup but, of course, bear in mind the 2 moves in a currency basket can be quite considerable. Thats the other reason were looking out a significant amount in time. One other thing id ask people to Pay Attention to. Compare those march options to the price of the january 25 strike puts. Essentially youre paying only an extra 14 cents to own that option were giving ourselves some time to revisit the situation between now and march and look for opportunities to potentially spread or roll tony, whats your take on this trade yeah, so as carter said, were not in the why business but for investors looking to seek perspective, the one place to extract a view for the dollar is looking at fed policy and the fed for months have been advocating for strong fiscal support with in conjunction with the monetary supply or Monetary Policy to continue the economic recovery here but from the current perspective, a large fiscal policy, a response, is likely unlikely and the fed is left open for more qe and thats a net negative here for the dollar when you take that into account in conjunction with the technicals and you look at uup as an etf, its been largely range bound since midjuly and you have a potential breakdown below this 24. 80 support level here and a breakdown below this range projects all the way down to about 23. 50 to the down side substantial down side for uup. So for those reasons, i really like mikes trade and the fact hes using a straight put and going out to march, buying himself quite a bit of time because i see if we get the breakdown below 24. 80 youll see a quick and fast move and a straight put allows you to take full downside exposure here on uup to the down side lets play this all out and look at the impact of the dollar so, carter, whats the next logical step what emerges next . So emerging markets and before we look at the charts, lets discuss that if you have a weakening dollar, we know many emerging economies are debt heavy theyve borrowed in dollars. Weakening dollar deflates their debt we also know that many emerging economies and countries are commodity exporters. A weak dollar helps commodities. Of course, also many of them are dependent on Foreign Investment and a weak dollar helps as well. So just a handful of charts. The first is the etf that tracks emerging markets no judgments on that chart next chart, well, we have a welldefined break out to think that the s p has yet to really clear its september high eem is on its way. And then the final chart, you can draw the lines this way. A welldefined level from which were breaking out, and a welldefined up trend. So weve broken out above the apex of the Triangle Free to move higher. Mike, how do you trade emerging markets from here yeah, so taking a look at eem. One quick point, this is a followon to the conversation about the dollar and thats particularly true of eem because eem is not a currency hedged etf. We had some data coming out of china. Their export data for october. That looked relatively strong. We have this sort of dichotomy going on right now also with the pandemic are we going to see followthrough on good news of the vaccine or are we going to see some pressure as a result of an upsurge in cases. In any case, whats good for china is good for emerging markets, etfs generally. The way to play this is with options because weve come so far, so fast and any bit of bad news is going to affect that as well i was looking out to january the 4951 call spread. Spend about 61 for that. Selling at 51 against it for 40 cents thats a net deficit of 50 cents. Thats a little more than we like to pay for vertical spreads. I think thats well justified here because, number one, we have, as we just pointed out, seen such strength already and sometimes paying a premium is justified. I think it is here tony, you like this trade i do. And because if you look at eem here, to understand the strength, you have to understand a little bit as far as what youre getting exposure to in eem and something important for many investors when investing in the etf to understand that we look at eem from a geography aspect, twothirds is exposed to china, taiwan and korea which collectively have about 1. 5 billion in population. Those three countries predominantly, life is going back to normal here. If you look from a sector perspective, half of this index is consumer discretionary, technology and financials. Three sectors we think are going to do fairly well through this recovery when you couple that with the breakout of eem above a major resistance level, you couple that with a weaker dollar that we just pointed out, the exposure you get in this etf, i think eem can be psubstantially higher while i like mikes trade, i understand he was trying to reduce his risk and the 51 call options is reducing the risk of the overall trade by roughly 40 compared to just outright buying the january 49 call options but from my perspective, because i believe theres substantial upside, id prefer to take a little more risk take on a little more delta or go out to february and spread this to about 4953 to the upside or buy the january 49 call mike, you want to give a quick comment on tonys alternative trade . Yeah, i think thats a good play ill tell you why i chose that 51 strike call to sell actually and thats probably more tonys domain and carters than it is mine i was looking at technicals and it seems to me we fell off a level right around 51 in eem not that long ago and generally speaking when you have that situation in my experience, you will run into some overhead supply that isnt a longterm bearish or resistance type of a thing, but were only looking out to january here i was looking at that level as a potential pause point. That was the reason i was willing to sell that call. Dont forget our options action newsletter and website. Heres whats coming up next conduction, construction, wires and plumbing copper could be thought of as the most precious of metals to the Global Economy if the world needs it, then you should want it, too. And tony has a play to help you start shouting mine, mine, mine. Plus, calling all options action fans. Reach into your pocket grab your phone and tweet us your question optionsaction if its nice, well answer it on air. When options action returns. There were tsunamis fourtin the world. And once they happened, we were in a major hurry to get to those regions to provide aid and support. It was very humbling to be able to help out all those people. Its my dream now to go into clean energy and whatever the next new fuel source is, thats where i want to be. I want to be on the front lines of implementation. Welcome back we started broadly with a dollar focused down on the impact on emerging markets and lets narrow this funnel to something more elemental on the periodic table. The atomic number 29, symbol cu, obviously its copper. Tony, lets c what u got i want to look at Freeport Mcmoran which for those investors who didnt chase this who are being patient, you have an opportunity to seek some Long Exposure if we look at a chart here, i have a chart of the copper to gold ratio this is a twoyear chart we see that copper is largely underperformed gold for the better part of that. Since the march lows it started to stem that underperformance. If we zoom into a sixmonth chart, weve started to see the copper to gold ratio break above the moving average and just this week on the vaccine news, break out above a major resistance level. This solidifies for me the underperformance and now the outperformance of top copper to gold this gives me confidence in the shape and the recovery of the Global Economic recovery from covid19 so when we look at a chart of fcx here, this is a chart, a stock thats all over the place. This stock peaked at around 2014 of about 40 declined 90 down to 4 in less than two years and now is one of the strongest stocks in the s p 500. And its just on the verge of a massive breakout here above the 20 resistance level so from my perspective, i see an up side target of about 24 in the next two to three months so if the trade structure that im looking to utilize here reflects the 24 upside target that i have here for fcx and the fact that implied volatilities are relatively low here, only bat 10 over the past 52 weeks the trade structure im looking to use is going out to february, giving me about 90 days worth of time and im buying the 2024 call vertical here spending 2 for the february 20 call options and collecting 75 cents for the february 24 calls. Net net here paying about 1. 25 which gives me about a 6 move to the upside in order to break even here for fcx on this trade. Mike, i feel like tony didnt like the periodic table humor, but i think you appreciated it what do you think of this trade . I did appreciate it and i do like the trade, too you know, this is an interesting situation because when you look at a stock like this one, where basically its just appears to be going straight up, its important to remember that sometimes that doesnt necessarily make it expensive. This one isnt particularly actually its trading at eight times less value ebitda you have valuation that dont look too stretched to me despite the big rally, i think that actually this is still a good entry point of course, given all the things weve talked about, options are still the right way to do it carter, quick thought the incredible thing is on the low, pandemic low, it was below its financial crisis low and now its come up smartly but its nowhere near where it can go much higher. Coming up, keeping up with the global theme, we look back on our trade on japan and the other big story this week, the race for a Covid Vaccine we map out a math path on moder, 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. A livcustomizeper iquickbooks for me. Okay, youre all set up. Thanks that was my business gi, this ones casual. Get set up right with a live bookkeeper with intuit quickbooks. 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. Keeping the global theme alive several weeks ago we laid out a bet on japan this is a low volatility etf. That sets up well for making directional bets but it is slightly elevated like many global indices were seeing implied volatility surrounding the election largely. Seeing a little bump there i was looking at the january 63 calls on ewj about 65 cents when i was looking at those and then selling the novembers against it for 20 cents. Net net youd be laying out 45 cents per contract since then, this trade has worked out so, mike, whats your move now yeah, this went right to the strike that we basically put on. What you want to do with those short calls is cover those you can hang on to the longer ones and that same thing actually applies to all of the calendars and diagonals we recommended in november cover the short calls if theyre in the money up next, the other big story of this week the promise of a Covid Vaccine big news out of pfizer and j j well drill down on another major player in the space. Options action back after this im searching for info on options trading, and look, it feels like im just wasting time. 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. So its like my streaming service. Well except now youre binge learning. See how you can become a smarter investor with a personalized education from Td Ameritrade. Visit tdameritrade. Com learn that selling carsarvana, 100 online wouldnt work. Visit tdameritrade. Com learn but we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. Learned a second languageument applied to college applied for a loan started a business started a blog shared a picture shared a moment turn your wish list into a checklist, with internet essentials from comcast. When youre connected, youre ready for anything. Welcome back to options action. Weve got some blockbuster news on the pharma front. Pfizer saying its Covid Vaccine is more than 90 effective that got us thinking about ways to play what is playing out for some of the other drugmakers in the race for a cure. You saw some interesting action in moderna which dr. Slawi said he expects data from moderna in the next few days or so. What are you looking at . Yeah, so moderna saw more than three times the average daily options volume and call significantly outpace puts we have whats going on next week thats a potential catalyst that most active options with the 90 strike calls, the 100 strike calls and the 105 strike calls, all of which expire one week from today. Obviously, when you have stocks that have moved this much, people who want to make bullish plays are trying to measure that risk very carefully and using options to do it tony, did you see this action what do you make of it i didnt see this particular action, but just like pfizer, where the you had the big reaction and then quickly fading, the stock is back to where it was trading right before the news. I actually think you might see something similar here for moderna. The options are extremely expensive. Im not particularly one thats going to chase this. Do the charts of the vaccinemakers, carter, do they look okay . Well, they are starting to separate the winners from losers for sure several vaccinerelated stocks are down sharply from their highs but thats not the case here important to say, of course, this was the very first one to come to life when the socalled covid hit the market, we gapped down in the s p, february 24th very rarely get a gap in the futures. Moderna went from 18 to 30 it now looks like its going to take out its eyes. I like it a lot. I want to ask you more abstract question, mike. Whats the best way to play positive vaccine news . Because it may not be a vaccinemaker at all. Yeah, i think probably and weve spoken about this before things like the jets etf was one of the things carter had mentioned. Things like that maybe a disney would be a way. This has obviously been a stock under considerable pressure and might actually see some light at the end of the tunnel on Something Like this. It takes time for those to play out but its the hardest hit stocks that have the best opportunity. Time for the final call. The last word. Carter braxton worth, what do you say . Well, i want to be short the dollar here. We want to be long emerging markets, eem tony zhang . I like copper here on the Global Economic recovery im going long fcx using a call debit spread mike khouw . Yep, for uup, give yourself time when trying to put those puts on. I looked out to march. Use calls or call spreads in eem to make your bets there. Mad money starts right now. [narrator] the following program is a paid presentation for the oxypure air purifier, brought to you by nuwave, llc. Asthma and allergies are at an all time high, and it seems to get worse every year. Its not your imagination. Allergy season continues to get longer and more intense as temperatures rise and airborne viruses are becoming an epidemic problem worldwide. With the changing environment and unseen dangerous air pollution surrounding all of us, you need clean air more than ever. If you suffer from mold, dust, pet dander, smoke, odors or sleeping problems, discover the Nuwave Oxypure air purifier,