germans about whether or not he gets to do what he would like to do we presume. >> we wish him well. >> that does it for "closing bell." >> "options actions" starts right now. >> facebook shares hit another all time low. how to get your money back in just under four months. plus, how would you like to buy one for just over a buck? it's an options trade on the aerospace giant. and they will show you how to make money, too. it's a rare occasion that only scott nations can explain. the action begins right now. >> and live, i am mandy. happy friday, everybody.

>> guess what? the markets are getting a bernanke bounce. but, there was one stop that was really breaking the hearts of retail traders yet again and that would be facebook. is there any hope for this fiasco? let's get in the money now and find out. i believe this performance comes on a day that tech was quite strong. >> first things first. you thought you were going to have us talk to a chair. >> that's later on in the show. >> listen, we had the bounce and a lot of risk assets. i don't think investors would categorize this as a risks a st. the thing closes at all time lows. you have a real sentiment shift. it's getting worse and worse. people had targets in the stock when it ipoed in may.

now they're hitting the teams. >> let's get the rest in here. >> i think that there has been a lot of speculation since well below the ipo that this was an overpriced stock but they are not really the issues here. there is just too much stock is really the biggest problem. you can have an overpriced stock for quite some time. there is really no hope for it and people who are in it, they start to bail out, that creates more supply and lock outs expiring. so regardless of your fundamental outlook you have to recognize when there is nor stock for sale than there is to purchase, the stock will only go in one direction and that's lower. >> an evaluation is still way too high. today, everything was higher exempt for two thingss, facebook and the vix.

people think it will pull a facebook from today. it's just now kind of a joke. >> i will tell you what turns it around. the sentiment has gotten so bad so quickly. where were the analysts months ago. the lockups were always well disclosed. a three month and now a six month. >> really just too little too late. >> you always see this. right about the time that everybody was saying sell, you probably want to turn and say you know what? i will take the other side of the trade. maybe not as fast as everybody thinks, but there is some money there. i heard some people say where is the bottom? zero? i don't think so. you will not take companies that are making billions of dollars in revenue and say that it's worth nothing. >> i do hate it when analysts

put a sell on a stock after it's had a horrible run and you make a great point. there is a bunch of insider stock to sell. i just don't know who is left to take the risk. >> none the less, it is like trying to find an apple there. >> you know, it's funny. if you look at the chart, there is no technical set up here we do have dates. they will report the second quarters in late october. there is going to be shares coming on loss. >> what i want to do is i don't. and create a trade that plays off of the environment.

>> let's crack open the play book to see exactly how it works. you buy a call and to finance that purchase you sell a nearer dated call to reduce your costs. how do you make money? you want the stock to fall just below the strike of the call that you are short on the first expiration but above the strike of the call you are long on the second expiration. this requires a bit of timing. with that said, what's the trade? >> i'm not just outright buying calls. i don't think it's a great buy. but the calendar sets up really well. the stock is about 1818. i bought the january 13. the 105 that cost me 45 cents. what i would like to see, i would like to see the stock move higher.

the reason i want to own january is once all this lock up stuff gets out of the way, 20% shortage. i think you could have a dog sort of set up here in the new year where people are like a lot of the overhangs on the way. >> i really do like this trade. there are a couple catalysts that he spoke to. usually it's a situation where the stock would break one way or the other. i also like the strikes, too. i think you want to give yourself a little bit of room in case you get int the short squeeze. >> one of the reasons that we like calendars is they can be neutral. their's is pretty bullish.

that is less of an advantage. that's kind of the case here. i do like this a lot. the worst thing that could happen is you lose the 45 cents and you have to thread the needle time wise. >> i saw somebody buying the 14.65 calls. i don't know if i would do that. >> everyone wants to be negative? this is a low premium way to get upside exposure through the calendar and events. >> you might be thinking if facebook has found a flaw, the answer is found by playing a little stocks versus options. that is provided that the insiders have any left to sell.

it will set you back just $45. interesting risk reward. moving on to your next option. okay. the dow has been up. small on the action here. it has been the transport lagging. that was one technical analyst thinking that the dow is tied and it could be ready to take off. let's pull the charts and find out why with the man who is always flying first class, right. love that name. >> here is the two year trading action of boeing. a series of higher lows or lower highs. in the context of the lower chart, the next chart takes a look at really where boeing is

in relation to its own lows. right on trend since the '09 lows with a series of flattening tops. this is the definition of a debate. the debate comes to an end shortly. and one of the things that is driving this is how much of an is underperformer it has been. take a look at boeing. this is the the touj touj, of course, of which boeing is one of the kpaents and then boeing. it is literally the dog of the dow. >> the presumption is at this point that boeing is actually the place to be. >> thanks for much.

>> they have a lot of secular things on their side as well. now it's over 50%. >> this is really a real growth factor for the company. low double digit growth for the company. enterprise value trailing ebitda. >> so clearly you agree here, mike. let's talk about mike's strategy. he is simply buying a call. this is about as simple as it gets. let's hit the play book again. this is a bullish strategy. when you buy a call you want the stock to rise above the strike of that call by more than the

cost of the trade. that's all it takes. >> i just want to buy the 75 strike call. i think i could see the market move around. i wanted to take advantage and lever that trade a little bit. that's why i am looking at an outright call purchase. i'm not risking a big deal. >> that's what we want. less risk more reward. >> you can't argue with a call

purchase especially as we enter september and people are thinking that we get a bit more volatile at the end of the day. i would just take a little issue with a name like boeing. when i look at like coke recently. more ris, phillip morris has sold off a bit. i see these as potential canaries in the coal mine. >> i agree that that is not the place to be. >> i like the company with mike but i hate the stock. they had a bunch of 787s i just don't think that the stock is going to go anywhere.

you don't have to get too fancy. >> found its way back into other cycles of things. >> more risk on cyclical things. >> nice yellow ribbon on this. 100 shares of boeing would set you back over $7,000. mike's call only risks $125, and that is why we talk options. we will see carter later on in the show. now if you have a question you can send us an e-mail. i love to read them. the address is optionsaction@cnbc.com.

we will answer it. this is what is coming up next. >> talk about weakness at tiffanys. last week a bearish bet on tiffanys but the stock looks rock solid on earnings. can they polish the trade-in time? >> it's time for pump up the volume. the names that were heating up the sizzle index this week. would you like that cooked rare? this company is a processor of rare earth elements. the stock serged after news of a new california mine. hopes that with the new mine up and running the company will be in rare form. who is it? the answer when "options action" returns. [ male announcer ] trading's like a high-speed train. and you don't want to miss it

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with thinkorswim by td ameritrade. use the news links breaking stories with possible breakout stocks, options with potential opportunity, futures and forex with in-depth analysis. it's an all-you-can-eat buffet for all things trading. thinkorswim by td ameritrade. it doesn't just deliver news. it's making news. trade commission free for 60 days, plus get up to $600 when you open an account. >> where were options traders pumping up the vol this week? molycorps. >> it's been happening. i'm going to take a look back at trades that are neither winning nor losing and give you our next

move. con nor decided it was try to brak fast away from tiffany. the stock has since rallied but they haven't lost any money. here's why. just because you risk less doesn't mean you will always make more. that is what happened with carter's bearish trade on tiffanys. he thought the shares were a little too rich. >> tried to sell into the strength. >> but short stg stock? you said it. so to define his risk, he bought the strike put for $3.40. now to make money, mike needs stock to fall below the put strike price by more than the cost of the trade. but paying $3.40? >> i never could do that.

>> and neither could we. >> let's try to dpo it for less. >> selling the strike put. >> that's the spirit. >> so to spend less, mike sold two of the november 2 strike puts for a total of $250 and created his one by two put spread. but he did something even better. he made making money easier and here is how. between $3.40 he spent buying one put and $2.20 he made selling, mike reduced the cost of the trade to just $1.20. and now instead of needing tiffanys to fall below $56.60 to make money, mike can soo profits if tiffanys falls below the strike of the put by more than he spent on the trade or below $58.80 by november expiration.

relax. there is a trade-off. and since mike sold more puts than he bought, he could be forced to buy at the lower put strike price or for $352.50 even if it falls well below that level. however, even if mike did have to buy at that price with all the money he made on the way down he wouldn't zbin to see losses until below $46.40. but since the time of the trade, tiffany's shares have risen 2%, making this trade a loser. options actions fans only want to know one thing. what will these socialites do now? >> hopefully this will soften

bad feelings. however, if you bought mike's bearish options trade. is it magic? the value of the two puts that mike sold have decreased more than the one put he bought. in short by being short options he was able to be wrong on the direction of the stock but still right on the money. so should you stick in this trade? let's call back to carter. what do you reckon. >> i think we will stick with this one. it's raemly young. we will stay on the short side. >> mike? >> you know, this is one of the situations where i have been saying a lot that i would prefer to be long options at this period of time. of course since i am long, the issue is do you want to take

this off? i will be inclined to lean to the short side. you might want to consider covering the short putting. >> i agree with that. to me, this is one of the real head scratchers of the week. i think the trade has been on here. people were focused on exposure. you know what? sales were not great but the guidance wz not as bad as expected. >> we talk about how town side puts get juicy and they bailed mike out. >> if you want uptates, be sure to follow us on twitter. and dan posts regular updates on twitter. >> the final call from the

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plus get up to $600 when you open an account. >> it's touted as the world's largest tomato fight. it's all in good fun. the annual festival kicked off in a small town in spain. the method of choice? ripe, juicy plum tomatoes. revelers used hoses to get clean. it is typically held on a last wednesday in august. >> what's the final word here? >> i think i like dan's trade on facebook. >> i'm not a buyer of facebook. i like the calendar set up.

>> it looks like our time has expired. male the markets keep moving.

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