Name . Well tell you which one. The action begins right now. That doubles every day, particularly bad. Biotech stocks posted their best in more than a month. The biotech, the ibb rallying more than 3 this week. It comes as the group lacked to the broader nasdaq 100. So is biotech finally playing catch up to the market . Should you buy in . Yeah, well, i definitely think so. Look, we did see some bullish activity in the biotech etf earlier this week. Looking for a 15 gain in there. Probably by about september. There are a lot of reasons why you might think there is room for a rally. For one thing, some of the political headwinds that were the talk of the town. We havent we heard as much lately. These are actually kind of rare these days, cheap stocks, if you look at them on a trailing earnings basis, a lot are trading barely in the double digits. If you look at an area that has seen consistent revenue and earnings growth, this is one of the places to look. Its a good weekend to talk about it with asco. I have been in chicago t. Super bowl of these cancer stocks. There was evidence when hillary was leading in 2016, this group was taking it on the chin. Thats ricking. Some of the rhetoric out of the existing administration wasnt particularly friendly. There is the hope of mna, when i look at the ibb, at this point, with new all time highs, obviously, we talked about the russell getting back up there. The nasdaq has been a oneway train. At some point, you have to expect this thing to break out. Its 25 from those 2015 highs and its been in a nice, tight consolidation for years. Its growth, right, there is leading with the strength in the last three, four months, since a sort of a give back. If not years. Yeah, what we know about biotech, it was the leading single place it should be. Then it drew down about 38 . So this is, if theyre going to catch up, this is the time. You are playing in particular through which name . Well, the biggest one of all, amgen. There are a couple charts. I want to talk about what mature Growth Stocks can do. So i started a 30year chart, which is where data is s p 500. I told you to keep your eye out on the number here. Not so bad. Lets move on. Now, if i have mcdonalds, all of a sudden, that makes the s p, you got a fourbagger compared to s p. Thats another stock and if we were to add, all of a sudden, i dont have it funnier, look what nike does and mcdonalds, you cant see it. You got mcdonalds, keep going. These are mature Growth Stocks, now if i put in nike, it exceeds the numbers over here, home depot, and then the fun, apple. Now r now, surely, nobody beats apple. Watch this. Apple is down here. Like a play thing. Then you cant even see it. Now, this is pretty impressive stuff. For fun, the issue now is hardly the single best performing equity bar none, except for petty stocks have done better. Literally bar none. Is it ready to go again. First, lets have some fun with this. If you took 10,000 and you put it in those instruments. You have a 147 grand, have you 2. 3 million if you did nike. Moving on, home depot 2. 7, 3. 5 ten grand, ten mill. No one is even close. What im thinking now after what has essentially been a twoyear consolidation. The s p, to my eye, i think you are setting up a wedge of sorts here, were going to explode out the upside. I think they draw the lines that way or this way. But if you just were to see an arrow here. I think this twoyear consolidation is likely to set up for a powerful advance, arguably the number one stock ever. You have to trade, mike . I do, actually, im looking out to september, splefl e specifically at the september 160, 175 call spread earlier. You can buy the september 165 calls for 5. 85. Its a net debit of 4. 65. You know, this is a situation where the market and these stocks in particular have been low volatility. This is a less expensive way and a less risky what i to make a bullish bet on this base. This stock is trading 12. 5 times earnings. Their particular headwind has been that neulasta are two drugs coming off. They do have new drugs in the pipeline. And they have in the past about ten years ago, have similar revenue slow downs and managed to recover. The Health Care Space isnt going away. I think you have gone asymmetrical. You have a stock thats done nothing for almost three years d. Point, who would doubt this at this point . Not me. Well, you also, you guys are targeting gap to fill. So looking at that call spread, i think it makes a lot of sense, you are getting up to the mid70s. 180 would be that gap fill. I made one point. Listen, this is a sector like you said, its owning premium, with spot vix below ten on the close today is a tough way to make money. Maybe in a very slow summer, one trade i might consider is buying one dated casualties, like mike is doing in september. Then selling something shorterdated, doing a call calendar, to finance that a little bit. Ohing that premium, its a chunky call spread. One of the things you certainly could consider is selling potentially out of the money to help finance it. Look, this is an environment where the market has been doing one thing only. Volatility is incredibly compressed. It is the toughist time to buy premium. It might argue able be the best time when it has gotten as cheap as it has. Lets switch gears to apple. Its hosting the World Wide Developers conference on monday. Josh is out in San Francisco with a look on what to expect. Reporter scott, this is a Developers Conference the focus will be on software t. Expectation is apple executives will announce ios 11 our u offering new capabilities for your iphones and ipads, ios covers 60 according to ibc. That is, of course, a distant second to android, but the more than 5,000 developers at this conference are less concerned about market share and more interested in where they can make the most money. Apple just told us this week that it has now paid out more than 70 billion to developers since 28. And that downloads have grown over 70 over the past year. Analysts will also look for any clues in that new os about the new iphone in the pipeline, for example, they will be on the lookout for new signs of ar features. Excitement about that fine and the upgrade cycle that bulls are counting on is of course a big reason why that stock is up more than 30 this year. It wont be just software, though, an update to the laptop line is expected on monday the mac represents about 10 of total company sales. Perhaps a whole new device with reports suggesting apple could unveil a new sirienabled smart speaker. Right now, amazon controls about 70 of that market. They have advantage in the space. Huge install base of s fans, 500 stores in a Big Marketing budget. Guys, back to you. Thank you, josh lipton. I think that last bit with josh has been the most important point t. Siri needs to come up with something here. They are a distant number three behind amazon. They need to wow investors here a little bit. Obviously, this is a software conference. I want to make one point, quietly the air pod, which theyve released last year, its been released in many, many years to me the expectations arent particularly high t. Options market is pricing it 1. 7 , moving either direction between apple between now and next week. I think if you have gains in the stock, its up 34 yeartodate. You have High Expectations for next weeks conference, and High Expectations about the phone that josh detailed that may or may not come out in september, you may want to consider calling. We talked about one last year, excuse me, last week in amazon. Its a strategy where you are long the stock. Are you overlaying that. You are allowing for upside up to a certain point. You are giving up a certain amount of upside or protection. I want to layout the trade, if you are long the stock. You close around 155 today. You look out to september expiration. You could buy the september 170, 140 caller for even money. You would be selling one of the i guess 100 shares of stocks, then 1. 85 using the proceeds to buy one in september 140 putted for 1. 85 that costs you nothing. If the stock were to appreciate, can have gains up to 170. That about 10 of the stock price. On the down side, if the stock were to trade below 155 to 140, you would suffer losses, but you are protected below there. The reason i chose september expiration the company usually will lease it. That new phone, they do the unveil in the first couple weeks of cement. If for any reason that phone is pushed out. This stock goes back to 140. We have the stock up 34 . To me 140 is a very big deck nickal level. I think there is a gap filled down to 130, 125 we low that. To your point, they have been hardware oriented. Im surprised. As i was when you outlined the caller in amson. The math is working very nicely here. As we discussed before, usually when you do these protective strategies, there the a cost for ensuring its. Very often you dont get equivalent upside to down side when you put these trades on so this actually looked really nice here the fact that you can take 15, you can flip a coin if you own the stock to gather another 15 bucks worth of profits on it. Think it makes a tremendous amount of sense. The point of view from the charges as set up. This is a stock that drew down 45 in 13, it drew down 35 on the lows, now up 100 almost on an 18thmonth basis. You trend. You take profits, you do a dance on that. Nothing goes to the sky. This is one of those signifiess also, take a look at how the stock behaved over the last two years, generally speaking, when bad news comes out, what happens . They dont take the stairs back out. You take the elevator down. When the math happens to work as it does here. Even if the next nickals to you, carter, even if the technic also are favorable, you would still perhaps take money off the table because of the run. There is a setup in apple still looks good. In a good chart, theyre do you good, whether its 35 of air or 70 over, you have a situation where, who is the incremental buyer. It will probably be this new phone. Its the best of both worlds. You are still long the stock. We have much more options action ahead, in fact, heres what else is coming up. Options takers see a dividend coming from one of these companies. I will tell you which one. Plus, calling all options action fans, reach if your pock, not your phone and tweet us your question at options action. If its nice, well answer it on air. When options action returns. Logical. Welcome back to options action. Talk about a tough week for crude, Jackie Deangelis has more on what is trying practices lower. Thats exactly white. Were hovering near yeartodate low, the pressure is opec members may not be committed to production as they publicly stated. This comes as u. S. Productions, the u. S. Is pumpingt million per day up 7 from a year ago. That number could continues to climb this week, 11 more oil rigs were added in the u. S. , thats 20 straight weeks of addition dating back to early january. Is it a coincidence that rates havent fallen once since opec started cutting . Well, i will leave that to you. Meantime the u. S. Also exported a record amount of crude Oil Last Week 1. 3 Million Barrels a day t. Opec is a cut of 1. 8 million a day. So u. S. Exports almost can selling out the opec cuts. With all of this coming as the Trump Administration pulled out of the paris accord, just the latest in a series of moves to repeal regulations that would increase Domestic Energy production. Bottom lean here, more supply means lower prices for oil, that helps explain why energy st. Worst performing sector in the s p this year. Scott. Jackie, thank you so much. Jackie deangelis. So, will the decline in crude put a number of Big Oil Dividends in jeopardy . Lets see if the Options Market is giving us a clue. Mike, can you break it all down . So we often thank you about to the Options Market is implying for dividends, how do we do that . We have to calculate the forward price with the put and call of the same strike and expiration, for example, of a 50 strike, i take the price of the call. I add that to the strike. I take the price and deduct that. That gives me the forward price of the stock that options are implying. Remember, stocks pay dividends, options dont. Then im going to compare those two prices, i will take a look at the difference between the two of them. That will tell me essentially the carry cost or the Interest Rate and dividend impact. So lets take a look at some of the dividends, 77 cents for exxon, 1. O 5 for chevron. I want you to pay attention, slum berge, all service based, 55 cents t. Options market is implying some pretty big cuts, about 20 cents each for former chevron and exxon. 30 cents for royal dutch, which is most of the 47 cents you already had. A warning sign that dividends might not be sustainable. Take a look at the yield. Its over 7 for royal dutch. Thats a troublesome indicator. Weve discussed this ehere. These companies are low to cut their dividends. That i generally dont. No one wants it on their watch. No one wants that on the epitaph. You are the one that cut the dividend. Talk to me when oil is like 20 bucks. Not 47 bucks. Heres the thing, thats what theyre thinking. First of all, sort of the nonagreement in opec. Guys are thinking, its going 20. I dont think theyre cooperating at all. But then theres this. Exxon by far is the biggest one, you have the live billion. The next close is maybe chevron, 100 billion left t. Energy sector is making 15year relative lows to the s pment something is wrong, it probably will be the cuts. One of the thungs you have to consider is if companies have to take on Additional Debt to basically sustain a dividend, weve had incredibly low rate environment. If rates were to rise, how sustainable would that be . They havent been replacing all of their reserves. For a long time. Thats right. So that has to come from some place. That will reach a Tipping Point at some point . Does it surprise you guys, though, last year when we saw oil at its lows, the high yield index is getting slaughtered. Its 52week highs. There seems to be a lot of dischecks. One of the important things is not just that. Actually, i dont know there is a big disconnect t. High yield space that issuance was coming from drillers, for example. The e p space. That is contributing to the supply jackie was talking about. From the integrated oil perspective. They make the money in the value of their reserve is measured in the price of oil, thats going down. Thats the problem. I think an approved rally, 18th off the low t. Energy stocks never moved. Now were giving it all back in the commodity. Still ahead, goldman sax is the worst this week and the charts are pointing to more pain ahead. We will tell you how bad it can get when options action returns. [pony neighing] what . Hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at Td Ameritrade. You wont see these folks they have businesses to run. They have passions to pursue. How do they avoid trips to the post office . Stamps. Com mail letters, ship packages, all the services of the post office right on your computer. Get a 4 week trial, plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Welcome to holiday inn whether for big meetings or little getaways, there are always smiles ahead at holiday inn. Steve, other than making me move stuff, im here at the Td Ameritrade trader offices. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. The trade last week. Sedan was banking on a big drop for goldman, heres what he said. To me the trade is pretty simple. Look out to july expiration. We will catch that earnings event. The stock was trading at 222. 50. You could buy the put spread july paying 5 for that. That your match risk. The worst performing dow this week. I think it has more to go to fill in that gap. We were all in agreement on that. The trade was a double in a week. In this six, we have such a short drop in a short period of time. You play with the house money a bit or you roll it down. We are hovering ominously. I think what i would do, if you want to press it, look, you are well between the strikes. You definitely want to roll to an algorithm, give yourself a little bit of time. This is definitely working your way. Lets move to gold. Last week, mike ko and carter said the precious metal could shine. Long gld . Im looking long to august. I think you can buy the 121, 127 call pred, they were 2. 65. Can you sell the 127s for 85. Against it . Zb ld was up 1 this week. What do you do now . Thats not exciting. Is it down . Thats true. I think the key is it was up very strongly. That says a lot. I think there is plenty more to go. Yeah, we have plenty of time. It went out to august. I think this is just the first step, we are reviewing the trade. We made the first step on our hike t. Journey has a long way to go. This is funky stuff. Gold is is up, equity is up. The gld. 30 year rates. Its going down. There is funky stuff going on. I expect gold, all this risk stuff, risk options stuff, it will work at some point in summer. Up next, your tweets and the final call from the options pits. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at Td Ameritrade. What . Pony neighing] hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at Td Ameritrade. Welcome back to options action. Its time to take your tweets t. If irs is from matt who asks, what do i have to do to get the tweet on air . It turns out nothing between us. Congratulations, you did it, but, he wants to know, what are your thoughts on foot locker and a rebound. I was i contractor thinking the august 60 calls. The rebound. But, if you are going to play for a long side bet, youd have to take the august call, its 2 worth of rick versus 60. Thats a broken stock. Well support that at 50. You may want to see it in the mid to low 50s. They pulled it up on its quarter. Middle rebound, i would say. Any more cliches you want to break out for the world o athletics . Nothing to blame. Or just get its head cut off. Stock pulled dynamic. Next question, you talked about a possible amgen breakout. Does this bode well for cellgene and biogen, carter . We are talking a stock consolidating at an all time high. Cellgene is a weak stock trying to bottom. I like it. The feds know its coming. I like cell celgene is. Does not any friday, its National Donut day. Ma marco is asking which favorite . You always go with the glazed. Glazed, krispy kreme. Powder jelly. Wow. Thats a mess right there. A surprise. A big mess. All right, its time now for the final call. That is the last word from the options pit. Carter, you are up first. Amgen. Do not be tempted for hot dividends in oil stocks. Yes, soon apple, if you have fantastic gains, its selling the money call, buying the money put, protecting your gains to offerings. You guys have a great weekend. Its been a pleasure being with all of you. It looks like our time has expi. Well be back next. Theres always work somewhere, i promise to help you find it. Mad money starts now. Hey, im, kraim, welcome to mad money. My job is not just to entertain but to educate and teach you. Okay, so ware not creating as many jobs louis lot of people thought
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