welcome to "opons action." i am misee, he here is where e action is tonight. bank onit. which a which wil grab the headlines, with e smart money tching big blue on earnings, we will tell you why. >> i want to -- >> "options action begins right now. >> welcome tth show. these are the option action traders re on the desk and across thenation n ccago and philadelphia. a bearish chill taking hold as

theummer is heating up. s & p., touching t lowest level since may 1st, rocky rnings season ahe? confirma of our massive rally beginsn tuesday,when goman sachs releases. and s. & p. down 3% forhe week. not expecting action next week. a much smaller mov than we have tycally seen in this unprecedentedyear. is armagdon off the table? >> not entirely. one of the thingse saw this week, and toward the end of the week, buying in th the form of a foot spread, 57 cents for 157 thsand of those.

sing stocks,els fargo, one thing i would highlight, this is prottion it is not a be on a olent move. i think what we are is expectation th the move alread took place. >> a lotf namesthat you had up on the board are now 10, 15, 20% in the last month. some expectationhave bn daen in the what we have seenn the last month or so. the implied mes, mid single digits or so we have gotten comfortable. the armageddon may be off the tablhere, but there is portunities, if you want to be able to sleep bett at night against your long division. >> its interesting that dan points out the impld moves are about the me. the are very,ery different stocks and behe dferently. >> iould say, i don't think we can comfortably sit here and say

argeddon is off the table at all. it going happen tomorrow? absolutely not. i would say to my point, looking at some of the individual mes, wells fargo, bank of america, bb & t, we saw aggressive put buying, if armageddon happs, meone's got protection for i protective septemb puts for trading. we did see shorter tings, in the ju call-buying, taki a shot. i don't look at it as bullish earngsill be great and we are looking f an upside. things are muted. we have seen a lot of moves we are no going to see at much. thgh, one of the things i wish, it is a low probability that w will se any of these big types of moves. high probability event isot a bet. >> how do u intpret this

scott? goldmasachs out of gate, the implied moves on t stos ange as time goes on? >> goldman shs is secretariat, and a lot of the oer fancial names are regrets at the ildren's petting zoo. tion traders never take the idea of armageddon of the table completely. what happened is you get your head handed to you. the fincialsave been aneck tol. earnings don't happen in a vacuum. earlier, when things were beer, but preannncement, our earnings will b okay if we were set up for big disappointments, we would have se management of expectations we haven't seen thathe put back is anecdotal.

sglp lien, i tnk goldman has a goodquarter, and has a good outlook, i don't it will propel the sector. goldn is considered an out ladd. the one thi that can turn the sector to theown side would be an outlook for the second half of the year by goldman shs a bit less than expectation. >> i am n se i will -- cred losses wereoing to be dismalhe second ha, that -- could change t conversation. >> early march, when the ceo s different commen. >> let not go deeper into bank of america. you have a trade there. >> they rept next friday on expiration. he i a company that traded as low as $3. and as high as 15 t seltzedack inhere below $12. as i look out to next week's earnings. this company has t said a word any what the biness looks like

in the last couple of months. one thing i want do, they 1.25 billion shares, a 10.77. i looked out and saw the july 11 put, if you bout that stock, when you saw the st go to $15 an back down. you didn't sellany, y may want to think about protecting that stock. interestingly enough, you buy that 25 cent put, and in july, you are protecte at that level of $10.77. 10%, dollar cheapf you own at stock. >> mike what do you ink? >> i aee generall i don't lik to buy short-dated options, 25 cents thrvegs a stock tha moved around abit. you probly should buy that. >>nd this is a secto that will it be on everybody's radar. technology, the be pforming grouthis year.

teflon tech, is the option foresting any direction based on earnings? >>f you loo at the qq opons, it will give you an idea of tax sentiment. 33, that isprotecting some of the tech earnings here. unlike the financials, i rugglehen i am trying to find individual names. microst, with bullish trading, i feel like i am streting t has en a qet. wiser here. nobody is positioning for much. look t google,he average mover, been aroun 5%, ibm, look to intel. not pricing in muc more than that in neral, i would say it resembles the financial ctor.

although, it is lightly different, i don't see theame proactivput bing than in the actual stocks. >> this i ybe good news, if we are a gla half full mood? >> a lot of the names e cycle names, in thast 1 months o so, look at intel, ibm, what ey will say for their outloo, intel's ceo mentioned, on the last earnings report that pc has bottomed. it is down on the year. it is one of those this that under performs. iam not sure th the option market, en invests are taking what they he to say at face value. >> how do you read theea leaves, sct? >> ibm and intel, the important on, in the financials, and ogle is the secretariat of the space.

we can't pay so much aention to the expectation for a move in google, . intel and m, the fact that expectations of the move from earnings are muted. it is probablyood. they are likelyto lead u out of the space. supp chain problems figured out. people drawing down cp inventories, buying a lot from intel, was a problem earlier in the cycle. it seems to haveone ay. the companies,well, we don't expect a least, that is good. they are going to lead us out of the doll drum >> goldman sachs saying they expect a recery in hardware. you got a trade on ibm. what i it? >>ui correction here, first the right time, it was e aust puts not july. going intoearnings, fiown stock, andi participated in this rally, sticking to the trade i recommended.

fothe last three months, i like it the july 95 put, 70 cents, i am cap, i wantto finance t offer out that july strike called, 60 sent, bung protection. down 5%, get called away roughly up 5%. e thing i want to stress about ibm, the last five years, two quarter th is ibm moved more than 5%. january, over 11%, he to go back to april, where iwas down 8%. i don' expect this trade to workout. whh is fine. >> you don'txpect it to work out. >> i think it is. i will defend your tra more th you are. the reason wt good news will see to drive ithigher. i don't see a lot. the certainly, vol tifltbasis,

if we are going to s anything f the econic news we are seeing will be any dition, that new could be negative, the put buyers are doing the right thg. you are doing the right thing. like the trade it a srt trade at ibm. >> coming to your defense, stacey. >> moving on. >> that is pat benatar, isn't it, dan? >> living an '80s time , my hair is not big enough. dan anmike agree on the directioof a stock, hit each other with the besthots over rategy. thelast time they tangled it s a draw. they both call apollo earnis, when t parentpany of general electricreleases results. mike, e first shot. i willontinue the theme here, the first is we are not expecting a lot to come out of

earnings, the play isn't cessarily, i won't lay t a nch of premiums. i am willing to recognize,e uld see new data pointsut of ge or her earnings, as earningseason progrees here. i will sell the puts for 20 cents and bywo payingbout a di for this thing. the prices may not -- tring about even. e idea ere, i won't lose anything if the stock goes down 7%. a sharp upward move, not saying i expect tt i ha leverage. i need protectio

>> you are buying o, two of those upsidell >> three. >> what i want do here, i t so fused on earnings. he i a stoc between 6 and 15 in the lasfew months here. it really hasn't fou a home yet there. is a lot of movg parts, think ll street has their hands full, trying to get their arms around it. what theoutlook will be. ing for it, i think, it has potential to beolatile. earnings, 6%. onverage or so. what i want to buy the august10, 11, i want to pay 115 for that bre even byugust expirati, 12, 15 on the up side, 8, on the down side. a proxy of wha could happenn themarket, if w are inflection point that may cause, you know, the may cause the market to go

one y or theother. will pticipate one wayr the other. >> i willav to with mike on this one. i like dan's the sisz. you don'tave to pay athing up front. i like that. >>. >> notry trade is a winner. we will call out one on tom. after this friday. after the break. feyou'll never go backcker y

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>> black and deer. 10 t times itsormal volume. welclcome backcking to"opti

tion." we check the chatter. the sizzle index. e blac and d decker calls,s, earlier today. at do y make of this activity? >> a great example off what can ppen on a qet dada 1010 times theverage calallolume today. coupuple ofhings i wouldsay,y, i put high probabibility that somethg is happenining this weekend. no. thcompany is expecting to reportrt arnings. itas after they cut their divivinds. it has been t there. i think it isinteresting, i just don't't think is haening thisis ekend. >> move oo then time to get cacalled out. update you o on l losing trades. it i is the less sucssful os ththat can tch you tobe a tter trader.. no pain, no gain. dan's fans callili for aalming violatation.

just becausese youre spending leless to make more, doesn'tt m you wi a always come out ahead. das palm spread.. >> i wawant to buyhe july11 eight-t-put spad in palm. >> they are makin aa arish bet the stock will go lower and buying put a against t by selling that s strike pu you redudu the cost ofof the trade, d limitinggbetween theput that y bought and t one that you sold. in t case of das tradad he thouought pa was overhyped. >> i wldn't short t this stococ with y yr money. bought theuly 111th put spread, selecting 30 cents to to sesell the july 8 strike put. 80 centnt toto make a possibly

2.20, minus t the cost the trade. inin order tmake t 2.20, he needed the stock to fall to $8.. >> all the hope ofsurvival onn one product.t. >> if president obamama taut u anythingngis tha hope is a powerful s source. >> yes,we can! since d d me his move, palm stock llied from 28%,aking his trade, hopelessssthat is because as the stock risis, i solv. now, witith it out o of his han he must use h hehe. "optioion action" fans are leleo wonder, whatat will n do now? >> keepll the legions ofans waitg. had you shoed palm stocks, you

woulbe l looking at gger lolosses, the quiui spreadad. havi said at dan. whatat is thexpiratation. >> the thing i worthss. you lo your money. i don'n't take it ghtly. it i is the mosost seous thing can n do wh we a are vesting in the market. one of the reasons we wer clear, iwas very cleaear. wouldn't short this stock. still woululdn't herere, up 20 o percent, when n suggesested th put.t. if anything,, i am morore negat. thcompany released earnings since they announced this prodt. they won't't say a word a about units of this palm prpree device i haveve played with it.. i don't thihink is a great phon nono sort of mpetition toapple if yo watch whahat apppp did, sold a milli iphes in a weekend, andnd monday morning, annoced it. what thehey are hiding?? i wt to roll this thingut

anandbuy the nember 14 put spread, with aax motential gain, two tes my money,i lieve strongly, this thehesis will play t. you have e to b -- i a a with dada palm is the ththird player, tha is not a a place you want to be i am wonring if ts is not dan'n'great white whale. how many timeses do yo roll thi thing g out? maybwe move on. >> t losses were cut. >> i think you can get caughtt into a trap. if you continueo persistently thw preremium at a trade idea. it c be a trap. over time you a digging yourself aole that youuave to ke a lot of money to get out of. sundaus an e-mail. it is the fuel that powowers ou

equip optionon action." i doead e every e-mail. i am not kidding you. is it is our chance t ucate you. at is ght after the show.

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timeorhe final call, the last word. stacey. >> earnings nextweek, know what you have on, he a lan. >> i like the ge strangle. i could ownhat before expiration for almost no erosio i likeuyingthat bank america july 11th putor25 cents. >> i will go with the vat put buy. >> our thanks to t traders. we will see you back here next week. ve a great week, everybo.

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