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tv   Fast Money  CNBC  February 2, 2012 5:00pm-6:00pm EST

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s&p 500. energy and financials won the day. that included materials and health care. a fantastic evening, everybody. i will see you tomorrow. thank you for being with me. follow me on twitter and google plus. stay with fast money. it begins now. . here are tonight's top three trades. apple is near a record high. will the next catalyst with i tv. an analyst is tracking what could be the next big device. lots of pain for pennings and which are facing the greatest shortfalls and the latest tracking the other lives of traders. we are tracking a high stakes venture of one trader ahead of the big game this weekend. this is fast money. let's get right to the under the radar tech winner. microsoft hitting a 52-week high. this is a slow mark higher for 2012. >> it has.
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when you are buying microsoft here and buying the embedded enterprise opportunity here, they can get windows 8 on to mobile and the enterprise with a huge opportunity. i'm not sure they have the management to actually execute the plan. they have yet to do it. there was a big, big opportunity. the market think it's happening. >> you mean steve palmer? >> they had a lot of opportunities to get a lot of opportunities beaten after a game by facebook and a lot of different people. another chance they could do something right. he has to prove it. >> 'is it that we believe in windows 8, but not windows 7 and other iterations of windows as a catalyst? >> if you are a money manager and look at microsoft, you should be believing the story. the fundamental story that has been the same the last three years, but and the overall market environment and sent to
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the fact that the portfolio management with growth and value. we under owned it and we talked about it last week. you have a market that is moving in a tortoise fashion and that gets the attraction of dividend and the cash and most importantly think about this for one second. it's $3 above the moving average, we have not seen that since men wearing vests were in style. >> for had to come up sooner or later. >> not necessarily about that, but i agree the best part of it. microsoft is basically in this spot. they have been in favor and dividend-paying stocks. >> i have been saying this since october. it was very, very inexpensive and when you look at the technology going on right now, irrespective of what's happening
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with that, there a lot of players benefiting. it was the golden age. microsoft has all the attitudes and it has been dead money for so long. pete was talking about this when it was $24 stock in october. up $6 as you mentioned and crossing into a tremendous surge and about 2-1 calls and 127,000 calls to 67,000 puts. strong activity and pushing to the upside. it goes to all three of the gentlemen have said. the belief for the first time in a long time. maybe the stock could break to the upside further. not just stall out when it hits. >> let's get the technical take on microsoft as well as technology in general. the technician at appen himer. what does the microsoft look like? does it look strong?
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>> exactly as articulated just now. it's 29.95. you put that in context and 50 billion with n five or six weeks. the market will tack that on, moving from the lower range to the higher range. the high comes into play around 31. a dollar upside and that's 3%, at that point you start to get interested sellers and people who were trapped from here and now you return money to them and they are interested in taking it on the back. i would say it's trimming and doing something. >> wow. do you reevaluate higher? >> i'm more entitled for a break up and they may do something besides buying back stock. they could make a good acquisition. >> could break outs be on the way? >> you must return to the level
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from which you are seth up. you never show this and never break out. you get to the top and the reason you stop there is for the people coming back here on loan. they want the money back. that's where the dead bodies are. if you back in for many, many weeks at 3031, you could set up for a break out. the first approach is very, very good. >> if you were to look at the analysis rather than just a channel, would it lead you to believe that we tag the upper end of the band and down to the middle and break out. >> that's another way to look at it. it speaks to what the condition is and you touched them here. i guess we have google here and jump into the next one. google is interesting. that might work. it's down to level support. that is to say a quick move and 15% all taking place this year. principal potential.
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that's the biggest of the nasdaq 100. >> the last thing you were on, you advised joe on what to do with it. what do you do with it. out of half and the other remaining half, we were holding the stock against the moving average. that's 562 and can't lose any money on the trade. thanks. >> sometimes they work out. i'm glad you did it. >> i happened to have the queues here. >> this was actually the trader's card and accused of not seeing this level since 2001. that's amazing. >> this is a top-heavy index.
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gaining 15% and microsoft and google are halfway. what we have is a classic conventional buy. we have been at the tops for a long time. just now we are breaking out the tops of last february. look at the five-year chart. >> this was depicted again. this was the circles i drew on the last one. that holds the epic low. flattening the top and tick cally that reflects a debate. >> the biggest components and that would be the likes of apple and ibm. do the individual charts and the biggest components? that's to study the parts and apple being the biggest is fine. not extended, just breaking out
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itself. number two, microsoft has come a long way. the parts in aggregate. >> over jpmorgan, we may have a three-month pull back. does your technical work show that as well? >> it would be reasonable. >> they are all getting it as they were quite negative in october and november. that's the reciprocal of the other side two or four months ago. we have come up a lot obviously. 1330 on the s&p and is it due for a pause? sure, but it's the pause that sets it up higher. >> thank you for coming by. from oppenheimer. are you going to be refreshed?
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>> i actually don't see a pause over the next three months. i have a very big melt up here and they have a lot of bearish output still even though we came up a fair amount. we will see tomorrow and that will be a catalyst. >> if you want to see a melt up, they have not seen the greatest and we don't want to be in technology. you want to be in other parts of the market. >> probably the best area is completely unloved. up 3% today and not a lot of support behind if you think it's weak. a man for thermal coal, just talk about this hated sector. seeing the performance from
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large cap technology, that is so emblematic of the mind set of the market. folks want to be in the market, but they want to get past the head winds and go incredibly defensive. names like ibm are names with great balance sheets and earnings with the market that will gravitate towards the name until we can prove a lot of other assets. >> let's in and zenga since the ipo backed in december, but the company did spike and that's yesterday and that's the relationship and let's welcome zenga. the research on the fast line. zenga has been unfairly treat and unfairly valued and now fair valuations back into the price. . >> aggressive sellinging and the
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focus was around facebook had way too much leverage and a fear that facebook would do something to damage zenga as you look out over the next 12 months. as you learned last night, we certainly expected when we initiated in december. facebook needs zenga to be successful and need the social gaming category to be successful. this is a strong component and they site sight it as a risk factor. interestingly if you look at the quarterly data in the filing, it actually shows 20% sequential growth in the payment segment and coming from zenga today. that's a bullish sign to people looking at zenga shares. they are listed as a competitor and an actual head to head competitor with facebook. a concern might be with the
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zenga bears. facebook means more to zenga than zenga means to facebook. facebook can replace that payment stream with some other company. >> absolutely, but you have to look at the other side. a healthy social gaming category from a macro level, they had a social gaming company that drives visitation to the site with a virtual spent. they have to advertise and where are they advertising? on facebook. these are not just virtual currency drivers for facebook, but driving advertising dollars on the platform as well as the most important thing. zenga is probably the number one reason for engagement on the facebook platform. people are playing the games for over 30 minutes per day. that's creating tremendous daily engagement and a reason to come back to facebook.
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that's a very important aspect on why facebook is promoting resources on how to keep them happy. >> i hate to go back in time, but me why zenga is not for kids's entertainment. the districtor of pokemon and the faddish type things kids were into. they have angry birds and stuff that people are at the moment preoccupied with and what's to ensure the fact that they deliver on that level of interest? >> i think the real primary reason to be along the stock is they are really focused on expanding their wings and adding to the number of games in the portfolio. they are not sitting still and hoping and praying that farmville will be the breadwinner for the long-term. they bought a company that they came out hanging with friends and they came out with scramble with friends, a take on a game
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that came out and is doing well. they launched it for the first time with the hidden objects that disney play and has done well with. the hidden kronle game and may get into the sports category to work on the poker. they are diversifying. they are not just targeting one niche. they haven't been able to get the franchise. they are dominant and spreading their wings and becoming more dominant. >> any chance zenga gets bought by facebook? >> i was never say never. this is really early stage in both the growth and social networking in the world. very early in the growth of mobile device. just yesterday there was the crunchies that played out and
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the ap was worth the friends. "wall street journal" this morning and an article about how the giants players were playing and i thought it was a zenga game. we are early in the life cycle of social and mobile. that bodes well and this was the new way to kill time. zenga is one of the new cures for boredom out there. >> it's always good to week with you. zenga by the way hitting a fresh 52-week high off the back of this facebook frenzy. you are not a believer. you never played any of these games. you don't get it. >> my wife and kids play and i have family member who is are playing across the platform and i have seen a million fad stocks over 28 years and we have seen them come and go whether it was restaurants and for kids's entertainment and that was until they were 25.
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then you stop playing. i don't know how long it lasts. people get hyped up for things of the moment. >> and the time spent gaming, it's a half hour. let's say that's an actual documented number right now. a half hour spent gaming. i worry that that's down from 48 minutes and that's down from 52 minutes. i think it's going towards zero minutes. that's why i wouldn't buy the stock. >> how much time do you spend playing games? >> not a great deal. the biggest game is the market itself. as you take a look at the options, taking a very short dated view. most of the activities concentrated in the february contract expiring in 18 days. one of the things that a lot of people look to is a big bump in call volume and traded today versus 60,000 in interest. 42,000 contacts and 26,000 open interest there. a lot of people see this upward
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movement and think this will be volatile. some are playing for the downside for sure. >> we will take a break and the ultra low rate policy with the pension fund into the ground. we have the real deal in your financial future as well as the futures of a lot of companies who are facing big obligation this is year. winners moving big time off the earnings and we have the trade on that one. all energy development comes with some risk, but proven technologies allow natural gas producers to supply affordable, cleaner energy,
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revenue fell short and also the despite r put with the business partner and they have been hanging over the sheriffs for sometime. you noticed this trade. why do you think it's trading lower here? >> they gave up the games and down to 117 at the lows in the after hours session. they beat on top line but they missed pretty badly on revenue
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despite doing phenomenally well. another almost 10%. it's certainly not the problem. it's the domestic that seems to be holding back. >> they came out yesterday with full earnings. we have wind and a different picture. what accounts in terms of the mix and the sands and the mix of wind. i thought they were almost fairly similar as well as that. >> i thought so too and the las vegas sands. they are off this high. i like picking it up because it's one of the best in the space. i believe that. >> that's really the playo these if you want to be in the space and get it on the chief here, but it concerns me that vegas is
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not doing that well. that gets a lot of airlines. >> i was just there and it wasn't as bad as three years ago. it's busy again. i'm glad about that. >> let's play nice and move on to the next trade. we have continued to monitor the effects of the ultra low rate policy and pensions. it's not just an issue. according to a report from credit suisse, they will face a 36% pension shortfall this year. in fact take a look at the ones that owed pennings more than 25% of the market cap. look at this. this is one reason cited by the bank of america and merrill downgrade today. the pension obligation that is 99% of the market cap.
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isn't that staggering. itt. 83% of the market cap is pension obligation. >> they tie the discount rate that is at historically low levels. obviously we talk about the problems that where low interest rates present for senior citizens and in addition that, the pension liabilities is a serious issue. in 2012, it's going to be recurring. you talk about how to contribute $80 million. this will stay with us throughout the year. >> liet's bring in one of the most independent consulting firms. we have analysis of this problem. it's great to have you with us tonight. joe here hits on a good point.
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a lot of plans assume a return that is simply too great for this market we are in. 8% or so. if they mark that down, is that implying that the contributions will have to go up? therefore that money will have to come from someplace on the balance sheet. >> the liabilities are on mark to market. at record low interest rates and they show it's down around 4 and 1/4 percentage. the record low interest rates are i had sporically high liabilities. we are going to see record levels of the contributions. not just last year, but 2012 and 2013 for sure. >> you must be the goldbug's best friend. the way i see it is the only way out is they put up cash or they start going into the stock market and ben bernanke prints a lot of money and gets asset
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prices higher and they fill the gap. is it possible if they go into the stock market and it makes 10% a year. >> 10% a year is going to produce gains and not enough to alleviate the need for additional contributions. you will need 20 to 30% returns to make up for the gap we are talking about. the plans were funded at about a 17% level at the end of 2011. that does change the equation. do they have to add cash and cut benefits if they are in the benefit situation? >> the benefits only stop the bleeding and all the funding ratios are approved to date and can't cut if they are approved. you will have to make up up the shortfall. that won't help the shortfall that accumulated. >> we heard from u.p.s. who told
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us there pension accounting change that will occur and it will be mark to market. that will have an after tax charge in 2011. is this something that others will come forth and do? >> u.p.s. has taken an option to take the change in status through earnings. there is a handful of companies that have done that and the rest of them will amortize the liability losses the last year and still result in probably record levels of earnings. >> will we see this pick up this year? i'm wondering because we have been hearing about the under funded pensions for quite sometime. what causes companies at this point to start recognizing the problem and dealing with it? >> it's accumulating and paying off the 2008 asset loss and this past year it's all about interest rates. they analyzed the market rate and the interest rates dropped 118 basis points.
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the liabilities are going through the roof. give us another update on this problem facing this. is this a reason why you stay clear. we had this from the company and it is pension obligations. would that prevent you from investing in the companies or would you think twice before buying them? >> as you guys all know on the desk, what mainly drives me is unusual activities. if i see somebody getting excited about the stock or see somebody starting to hate the stock and buying a lot, that's one of the primary drivers into the stock. as far as pension liabilities, i have experts like this to figure it out. >> they make me think twice. 20 to 30% in terms of the year to make up the gap. even if the stock market went
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up. that's a big gap. >> we have to take that. it should be a social conversation. our life expectancy changed dramatically. there is no reason for them to walk off the job. if they are in an industry that is knowledge-base and not taxing physically, that would make a big difference. still not having the conversation. >> right and think everybody would agree we had the conversation on a broader basis. nothing has change and it doesn't look like it will change immediately for investors. therefore when you see the problem and you think about companies having to have returns of 20 or 30% to plug a hole, that's got to make you think. do you think that's a valid concern. >> the statistic is for 1 percentage point decline in the discount rate, you have to have a concurrent 15% rise in equities. that's an incredible figure. when you put it up and throw it up again, you will see series on the list.
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understanding the fundamental model for series and understanding that they do have a pension ability problem potentially and at the end of the year, there is a goldman sax investment. i wouldn't touch sears. >> it's not to say the pension. >> it's the confluence of intricators, but if your holding period is more than a week or two weeks or three months, you have to know what that is. >> right. we have to move on to the next one. the playbook and closing below 18. >> that's right. the first time since july 22nd. they have compressed down to about 1795. like i said, july 22nd and the dow was at 12,724 where we are right now. as far as the s&p 500, 1325 is where we are now. we are about 1340 back then. i'm surprised and i bet many of you watching are surprised that
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ahead of the big employment number tomorrow morning at 8:30 eastern, we have seen volatility compress and i thought it would have held closer to 20. maybe even part of overconfidence about how good the number might be. the whisper must be higher about the numbers to see volatilities down this issue. they could be disappointed if it's not. >> for it's higher, theoretically, the market could be at the upside and still be higher because of the anticipated move. >> exactly. in other words if we create more jobs, what we are anticipatinan 40,000 will come off the temp jobs that were seasonal. instead of losing that 40,000 and taking that out of the calculation they are doing already, you see gains. that's what the outperformance would be. >> so this afternoon i looked and they protect myself about
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the payroll numbers. didn't look like i would make any money. even if the market got out 200 points. >> no, i still think it is really active track of how wide the swings will be in the market. look at the ranges. we haven't seen that 200 point move. you can barely see 100 point moves and that's less than a 1% move in the market. >> next, we may have uncovered new evidence that shows apple is coming soon. we will share it with you next. >> breaking news, the facebook ipo filing is out. >> up to $5 billion is what they planned to offer. >> 482 million daily active users. >> they will price in may. >> a lot can happen between now and then. >> $3.7 billion. up 88% year over year. >> as long as they acknowledge how they put up all the money to get into this allocation and i wouldn't hold it long. uh oh.
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the other office devices? they don't get me. they're all like, "hey, brother, doesn't it bother you that no one notices you?" and i'm like, "doesn't it bother you you're not reliable?" and they say, "shut up!" and i'm like, "you shut up." in business, it's all about reliability. 'cause these guys aren't just hitting "print." they're hitting "dream." so that's what i do. i print dreams, baby. [whispering] big dreams. live at the nasdaq, the apple tv, gene said apple has
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been reaching out to component suppliers to support his theory of the i tv that will level launch this year. you call all your channel checks and the suppliers and they say yes. then you go back to the model and figure out that it's going to be 2.5 billion in revenues to 2012. how do you figure that out and what are you using and projecting they will look like and sell like in order to come up with the number? >> first to get confirmation is really good. we had several things. i think that's a big piece. the real revenue hits in 2013. how do we get to the numbers we get to. we look at the connected market and 116 million units. it adds about 3% and the margin is the problem. the same gross margins.
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with revenue and products, investors will be excited about it. >> a basket of chicken fingers. i never heard of them being compared to a basket of chicken fingers. >> i don't think they are very high margin. >> i think that was clear. . >> your numbers seem conservative too based on if this launches and they produce 1.5 million. i think you thought of the 106 million internet enabled televisions, that's a small percentage especially for apple. that doesn't seem like you are going too far out on the limb if they deliver the product this year. >> we are not going too far out. right now people typically buy a tv once every seven years. before if you look at computers, you look at a mac they buy them about 20% faster in between computers. you could even build an argument that the overall tv market could
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increase as people buy tvs more frequently. the reason people don't buy tvs is no innovation. it's not the price and the $1,000 price, they need innovation. apple will continue to innovate on the platform and back to the numbers question, yes it amounts for only 3% in 2013, but ultimately this could be something that could move the needle for apple. >> let me ask you this question. we are talking numbers here. apple with almost $100 million in cash. understanding the innovation and now we have a product in itv. do you think that means the apple management holds back from distributing cash in the form of the dividend which is what investors seem to want. >> i don't think they will hold back. we have been hoping for a difference in the last couple of
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years and i suspect by the end of their fiscal year they will have a dividend. i hope it's 2% to 3%. even with the 2% to 3% dividend, they could add between that every year. even with the television and the investment and the supply chain we are past the point of any rational and reasoning to have this money. we are at the break point and expect something this year. >> thanks for joining us tonight. of piper jaffray. you are an earlier doctor of technology out of the technology. do you buy an itv? i recently bought a tv. >> for those who do nlgs you are buying multiple tvs, i think they are going to miss and that's why maybe a million and a half out of 106 million is not a bad or too conservative of a number.
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on the other hand, the apple and people out there waiting in line to get this are going to love this. i believe it's going to hook up with your voice commands and all the rest as well as the ipad. >> why today's rally and cold stocks may be raising a red flag on the rails. tspark card from capital one... spark cash gives me the most rewards of any small business credit card. it's hard for my crew to keep up with 2% cash back on every purchase, every day. 2% cash back. that's setting the bar pretty high. thanks to spark, owning my own business has never been more rewarding. [ male announcer ] introducing spark the small business credit cards from capital one. get more by choosing unlimited double miles or 2% cash back on every purchase, every day. what's in your wallet? this guy's amazing.
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welcome back to the nasdaq market. stocks were on fire, but weak pricing and the prices are surging on the pull back in supplies. the rails and the transport and the coals. it is embarrassing for the rails. everybody is betting on this. there is an awful lot of money and the stock prices and asking prices. you want to buy hard assets. this is akin to shut ins in the oil and gas area.
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that's what happened here and that's why they took off. >> the crude oil spread and is widening once again. they are down. >> we have a dichotomy going on between the european, crude, and u.s. crude. we have a larger supply than we had in years. we confirmed this and the iea did that two weeks ago. it was confirmed by the domestic council and we have an enormous oversupply. on the other side in super, we have a threat that needs to be taken more seriously from the uraniums than closing the streets of hormuz to cutoff the greeks, italians from their supply before the boycott as they get under way. you have a price that is reacting.
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>> you went long on a couple of big movers. > . >> the volatility goes down as a trader and i can it will my stocks. in the last week and a half, i have been getting out of most of my positions. the only thing that seemed to interest me are the speculative plays. one was particularly because of this deal they made for a shallow water driller. that struck me as not going to be a big deal and they wonder why it made this deal on the front end. he's got a hard time changing this company for the last four years for what has been a natural gas stock or a company into one that is over-50% oil.
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i think that will continue that process with this buy and i don't think it's as bad as they make it out to be. that's a decent buy. >> good to see you. coming up next on fast money, a big gamle on this weekend's big game and the secret lives of traders next. [ male announcer ] we know you don't wait until the end of the quarter to think about your money... ♪ that right now, you want to know where you are, and where you'd like to be. we know you'd like to see
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the same information your advisor does so you can get a deeper understanding of what's going on with your portfolio. we know all this because we asked you, and what we heard helped us create pnc wealth insight, a smarter way to work with your pnc advisor, so you can make better decisions and live achievement. my job is to find the next big sound.
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>> next on "mad money," cramer has the big guns tonight. all about looking and feeling good. health and wealth. the ig enchilada. the botox maker and allergan is coming up at the top of the hour. let's look at options actions. ways to play pioneer natural ahead of the earnings. >> yeah. it's interesting. this is stock up almost 75% from the lows a few months ago. a great rally and the things people need to look at. they did exceptionally well and a lot of that was one-time items. we need to fate the move over 4% and make a bearish bet. i will sell the february 95 puts and collect about $1.15 for those and buy $1.60.
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this is a situation where the stock pulls back and that's the best possible outcome between february and the expiration. i'm inclined to keep the puts on. good insurance if the market happens to pull back on one of the higher beta stocks. >> more options actions every friday tomorrow and follow the show on twitter. cnbc options actually. we get updates. we are answering your tweets and reveal the secret lives of traders. stay tuned. hello, how can i deliver world-class service
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for you today ? we gave people right off the street a script and had them read it. no, sorry, i can't help you with that. i'm not authorized to access that transaction. that's not in our policy. i will transfer you now. my supervisor is currently not available. would you like to hold ? that department is currently closed. have i helped you with everything you needed ? if your bank doesn't give you knowledgeable customer service 24/7, you need an ally.
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>> welcome back to fast money. we are live in times square. many traders juggle many ventures. other careers are in the high skak series. tonight she is here to tell us about how another straddles two worlds and companies and all on multiple screens. >> electronic trading has taken away from trading floors, but it may be opening opportunities for other ventures. most love taking risks and thrive on the high stakes they are involved in. many may be trying their hand on
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sports. here's a trader who is capitalizing on business opportunities in the big trades and the big games. >> i start off with what's taking place in the markets. i want to cover equities and currencies and fixed incomes. energies. >> that's not all. this futures trader is betting and looking ahead to two events. the much anticipated jobs report. >> depepping on where they are right before the release time, they will go on the s&p and go from there. if they come out and blow thing away, i will reverse my position and get a long s&p and long oil and long bureau and maybe even other commodities. >> the other event is the super bowl. >> with the europe bowl i think minus three to play. >> what better place to run than in the gambling mecca, las vegas. >> how do you have this where other people are trading with you? >> other people that i rely on
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with a close network. both appreciate the opportunities for price discover. they are very much on the super bowl and the players are loving to fly to las vegas and love the action. they love having a stake in the game. >> trading the number is not much different than wagering on the out come of the big game. >> it comes down to how well you can process or qualitative information so you can generate a positive return for your bank. >> like most, he loves the competition. particularly the out come of future events and making the winning trade. >> we will join the fast money halftime report and see how his trades on the job actually pan out and if he changes his way on the super bowl. see what he has to say. >> i'm curious, you brought us a couple of traders to straddle two different goals. is there a goal to switch over? >> all of them love trading.
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the ones on the floor, that business is changing and they are figuring out how to reinvent himself. he is doing both at the same time and trading while he is placing bets for these games. it's interesting how you can do both and the screens that show it all at the same time. it's interesting. >> i wonder what it's clients think. >> unfortunate for these two things. >> thanks so much for bringing us the great story. we want to hear a couple of your tweets. as someone who bought bank of america near $5, it's hard to hold it here. time to take profits. >> yes, it is. it's time to take profits and not that i don't believe in the story, but as one of the large real estate plays as far as banking and finance, this has moved almost 50% since the middle of december. i say take the money and run. we can reload later.
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>> writing about tripoint. they left following brought com and qualcomm. they have much more given the low expectations. would you agree with them about that? >> no. >> it's buy high sell high. >> what was that again? >> we will mention it again, but it's a classic example of buy high sell higher. it's a name that you can continue to sell. >> we love getting them and we have to take a break. uh oh. should we be letting him p-l-a-y with our t-a-b-l-e-t? [ mom ] i think it's fine. it's the new element from at&t so it's w-a-t-e-r proof.
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zero-to-sixty in less time than a porsche panamera s. the 429 horsepower genesis r-spec. from hyundai. time for the final trade. >> you want to hedge when you cannot and you have to. two to four-month ochgs look cheap to me. >> dr. j? >> i am like the jobs report to beat tomorrow. >> ron insana. >> i am getting ready to like the u.s. dollar. >> if he thinks, buy mhk. >> stay with american express. sunday giants 34, patriots 20. >> we are going to score too. i hope you are right. thanks for watching and see you

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