you simply can't keep this market down. >> the market doesn't give you this long to sell the highs which means probably we're going higher. >> so we've got to ask the question -- what could stop the rally? a china recession? >> i would take issue with almost any of the corporate accounting in china. it is that bad. >> what about another computer glitch? >> i'm playing poker with a bunch of guys and six months after i'm losing over and over an over, they say, we're cheating. didn't you know? everyone knew. >> what keeps the street from sleeping at night? let's find out. this is "fast money." live from the nasdaq marketsite in new york city's times square, i'm melissa lee. you might as well call it the market that just won't quit. stocks managed to rebound today. but should you be on the lookout for what could derail this rally? we thought we'd put the traders to the test. we always like to put you guys

to the test. we came up with a multiple choice sort of. one of the answers is going to be right. what could derail the rally? a, fiscal cliff. b, inflation, c, unemployment, d, china slowdown, or e, none of the above. it is very exciting to see where you guys sit on all of this. >> the bigger risk factor beyond the multiple choice is earnings. you could say "a summary of all the above." earnings slowing is a big issue all of a sudden. it's one thing ben bernanke hasn't been able to bend. norfolk southern down today 9% on a big volume miss, there's a lot going on there. broad base growth slowing is starting to translate into earnings. when you look at the bull case, growth is good, earnings are great and stocks are cheap but now you have earnings at risk. >> i think the unemployment picture has to get better. if the unemployment picture

doesn't get better -- and i don't really think it will, that's why i think we're in such a dog fight for the presidency here. i also think that if we get an obama victory, then you're going to see that fiscal cliff get much steeper and that's why i'm so worried about one feeding in to the other feeding in to the other. >> josh? >> i think i have to bring, too, what is the existent factor from china. we're seeing that in heavily cyclical and economically sensitive countries. they don't have a lot to say in different regions. the other thing to throw in the mix, the fiscal cliff is very real. we're blowing it up and talking about it a lot, because there is a reason. you could see 25% of the expected economic growth for next year shaved off -- if we go into sequestration, go lineally line, defense budget alone could be $86 billion in spending ripped out. those are the two that i'm most worried about. >> with the fiscal cliff we may be seeing the economic impact of the fiscal cliff happening as we

speak. companies can be holding back because they don't know what is going to happen. it is not necessarily when we hit sequestration, that will be the real hard line impact. but whether or not it is impacting us now, we don't really know. could be. >> the fiscal cliff when combined with massive global growth slowdown, economies are dead, that's when a fiscal cliff kills you. i'm going to e, none of the above. anybody for get about europe? bottom line is we have major -- >> shh! don't talk about europe yet. >> spain issued $5 billion of euros of bonds today at very decent levels relative to where we've been. but europe printed 44-month lows on pmis this morning. china last night gave you 11th straight month of contracting on their pmi. with china, this is now 11 straight months is significant. it is not just at 47, not slightly higher, wasn't

bombastic, it wasn't terrible. but china's snapping back quickly. again the velocity of a china move back up is not happening. it is not going to be what everybody expected it to be right away. to me it is global growth, it is all of the above, then all of those things become the problem. >> then you put on the calendar. because you mentioned europe and i'll include greece in europe. 11 days from now they have a vote in greece. that's going to be something on the calendar that we should be paying attention to. next friday is the last business day that we can react to how apple's sales have gone which start, of course, the real sales start tomorrow, not presales. then the week after that we've got the president and mr. romney in their debate which is very pivotal for the markets. i think the fourth category -- or fifth category should have been calendar, because it is all about the calendar and what's coming up in the next three weeks. >> technically that would fall into none of the above. >> i think all of the risks everybody was articulating, those all make sense. but one that hasn't been

mentioned are geopolitical risks. territorial disputes that are going on in asia are certainly one place where you could see a flame-up. that could be dangerous. of course the middle east is always a threat. netanyahu has indicated some concerns there. and if anything -- we see any escalation in either of those two issues, those are going to hit equities hard, too. >> the problems with all of these choices is earnings is where it all shows up at the end of the day. that's probably why you went with "e." >> sound like professor lee is giving keith the "a." >> no, in this kind of world, everybody gets a medal. >> i'm a root cause guy. >> the key is what did bernanke give the world in that picture. he gave them inflation. when growth is slowing, there is not a lot of producer price inflation you as a company can take. hong kong, the cpi doubled sequentially month to month as exports in singapore down 11% year over year.

japanese exports down 6% year over year. these are demand issues with costs rising. if you're a company you know what i'm talking about. >> qe3 was supposed to give us inflation in all the commodities, right? but crude oil prices, falling for the fourth straight day. what's behind this move lower that we've seen? joining us, head of commodities research. you think that the move lower recently is because refiners are just simply moving into maintenance? >> there is a big seasonal issue in oil. it is a very seasonal kind of commodity and we're moving into a period of time when refiners have much lower demand for oil because they're in maintenance. they're fed in like 2 million barrels a day of capacity. until the middle of november. then we'll see what winter brings. >> so at that point where do you see oil prices go? >> we actually see them sliding down because demand for all the reasons you guys have been talking about is not particularly robust. we see demand rising kind of on an annualized tick of less than a million barrels a day.

u.s. and canada alone increasing production by a million barrels a day. saudis are there to make the markets pretty -- >> i want to go deeper. i think the supply factor. the iea was saying saudi's giving the market everything they need but that actually u.s. and canada are going to be the marginal suppliers to the market. is this a dynamic that's going to keep a lid on oil prices? saudi and opec would like to see around $100 on brent. they think that's kind of your middle ground that keeps all sides happy. but are we going to get to a place where supply -- because again are we the saudi arabia of the next ten years, at least in terms of our alternative fuels and what we're doing in shale. >> well certainly north america's become the new middle east in a lot of ways. but i think the main issue that is on the horizon is demand. unless demand picks up, and it won't pick up until the global economy picks up, there's more than ample supply. talking about risk, the only thing that can bring prices up the next couple of years is some

mayor set of disruptions. it is not just one, but a couple of major ones. >> the one big one that we haven't talked about is ben bernanke. the reality is we're talking about supply up, demand down. what impact do you think he's had in the last six weeks to the price of oil and what if he didn't do what he did, where would the price of oil be? >> well i think the price of oil would be where it is now except in the interim the price of all commodities went up because of quantitative easing. and now reality has set in because fundamentals take over in the end and they're taking over today. >> how about the bounce today? we dropped down to $80$80,, the bounced back. did we get down to that support level which i think is $88.90? >> i don't think we're at the support level. i think what bounced it is that northwest european supply is sticky. maintenance programs in the north sea production fields have been extended so we expected more supply in the market in october and it's been postponed until november.

that's $2 in market. >> there's been a really highly correlated trade between stocks and oil in three years but in the last month that's started to come undplued. you're seeing stocks levitate with the price of oil now dropping as it has pretty dramatically. do we ever get back to a situation where stocks and oil trade inversely because the lower price of gasoline at the pump benefits the consumer to the point where that takes over or are we forever locked in this, you know, risk assets trading together? how do you see that playing out? >> i think we're in this locked in, risk on, risk off across all commodity classes and all asset classes until some normalcy returns to the market and the normalcy has to do with where europe is going, where the u.s. is going. now china's a big issue, too. >> it's liquidity over everything else. >> absolutely. in the short run. >> i want to ask you about the impact of qe3. that you canning about the diminishing effect of qe3 on stocks. we've seen a huge commodity bull run over the course of all the stages of qe, up through qe3.

then we saw a drop in commodity prices across the board. when you talk about a run, it's almost a double when you look at s&p index that measures commodities. in the long term do you see qe3 can put that inflation in where we will see the commodity run continue? >> i think those are two separate issues. i think the commodity inflation issue has been hyped. there's a market expectation that qe, whatever, feeds in to inflation over the long run. but we're trading reality in the short run. the short run is a function clearly of the relative value of the dollar, for starters. then where fundamentals take over. and on the commodity bull run, just our generic point on this is that high prices from 2002 to 2008, have real lly spurred on investment cycle that will bring on the supply that will eventually bring prices down to reality. >> ed morris of citi, thanks for stopping by. >> i think ed's bringing up some

major points which is that ultimately the supply's going to catch up but in the short run this is essentially an inverse dollar trade. if you look at commodities and where we came off the lows, i think that's very significant. i think also that specs in commodities probably got a little ahead of themselves. i think guys have been actively trading this space. i think if you asked two weeks ago hedge funds were probably at their spec longs and gold and palladium and oil. i think some of that's coming off. >> tim's right, the dollar has gone down for six consecutive weeks. it is having its first up week in the last seven. you have seen some gnarly moves in commodities to the downside. >> that's a market term. >> if you look back, last thursday we were on the show. you said you can't short anything. well, you absolutely can if the dollar is being burned at the stake. but if it bounces, it is the big s ball under water trade in all of global macro and you have to be aware of it. >> if you were listening to what

he had said about the refinery trade, sounds like you've got perhaps another month to trade out of some of your longs on the refinery side. in other words, it's not over yet. if the shutdowns aren't going to be cleared out and that 2 million barrels isn't moving out of there until perhaps november, tlen i think you still have time in the refinery trade. >> let's get after-hours action here. we've got to get to shares of michael kors, mazing its second quarter and full year earnings guidance. seeing that pop in the after-hours session. this had ln lockbeen locked in bucket of retailer exposed to the global economy, specifically europe, and they've all been getting hit. >> josh and i are buying their products. >> really. man bags. >> look. this is the brand, this is the must-have brands. we're heading into christmas. it is a great back-to-school season. this is not a growing pool of people spending on luxury. >> how much did they pay you? >> josh is talking about michael kors. >> that's michael by michael kors and that's a lower line.

>> woo! michael by michael. >> i thoiink i bought it on the street on my way down. wow. here i was showing my -- >> you showed the label. you walked right into that door. >> i did. i bought it outside the studio. >> plus the point he would normally be buying another brand but he's buying michael kors. forget about how much is being fed on luxury. >> michael by michael. >> that's the beauty of michael. they have different price points and they still convey luxury. you feel luxurious wearing that michael by michael -- >> i obviously felt so luxurious i stepped forward and showed my kind of cheap version of it. >> we'll continue tracking the move in kors in the after-hours session. next, one of the biggest break-out stories that virtually nobody is talking about. we are changing that tonight when we come back. we'll reveal what it is and tell if you there is still time to get in on the trade. much more "fast" straight ahead. e in charge of their own future.

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apple fans already lining up in anticipation of apple's iphone 5 release in stores. >> it was a good week for the stock, good few days leading up to this today but today we saw some profit taking closing at $698.70. we are looking at a little bit higher in the after-hour session but again we saw profits in apple ahead of that excitement tomorrow. i will tell you guys, i am still on the blackberry. hopefully i'm going to be in one of those lines tomorrow getting a new phone. >> same here. thanks for that. dr. j, what did you see in templts optiterms of the options activity?

>> it continues to be people betting on upside calls. there is a lot of activity right around the $700, $705 strikes that do expire after the close tomorrow and people, as always, won't be able to take delivery of that stock. it is just too damn expensive so they will either sell those or roll them out to the next month. mostly they've been rolling them out. that's what i would do given that we've got that data point at the end of next week which will be the phone sales. >> a lot of people expected that october would actually be not very good because the "5" wouldn't show up but actually they pushed forward or pushed back the release date so that there are more days actually on the market and making the phone available sooner than a lot of people had expected. so is the quarter going to actually set up pretty well considered what the expectations were going in? >> i think that's a good call. what i definitely know is that the global rollout is going to be much faster this time. they're going to be in 100 countries within the first 90 days which is significantly faster than they were even on the "4" and the previous releases. i think this is going to be

front loaded. this is kind of my view that a lot of great news has been priced in here. think people expect very good numbers for this quarter and i think you'll get a piece of that possibly from the third quarter. >> people that know this stock well knew the rollout. they were buying the stock under $600 a while ago. you have to be really wary of expectations. more important for me, i got to watch this in terms to what it means in the overall market. this stock is a big component of a lot of the indices which implies a lot of risk. >> let's get some options action here. sticking with technology. skyworks solutions gave weak guidance today so the stock got hammereded. >> they had an analyst day today. the stock opened up sharply lower, then fell after they gave their investor presentations, ended up finishing down about $18. obviously that equity holders weren't liking it too much, but interestingly in the options space we did see some people making bullish bets. we saw buyers of the january 26 30 call spread.

net debit of $1.50. maybe this stock could rebound after this disappointing result. paying $1.48, obviously has to be above $27.40 for this to pay off in january expiration. >> tomorrow we've got an update on an apple call calendar. meantime, about this consumer discretionary and staple sectors have recently risen to all-time highs but there is one sector break-out that no one is talking about. let's bring in the technical analyst at strategus. >> you turn on the tv, you hear apple, fiscal cliff, you hear facebook, all the while health care continues to make new all-time highs. this is the 20-year health care chart. from '95 all the way up through today. you have a beautiful 15-year base that's taken hold over the last 15 or so years. 200-point range. just broken out to new all-time

highs and it's broken out on an equally weighted basis as well. so participation has been very good. all the global names are breaking out as well. we think health care continues to go higher here. if you do a little math, 200 point range, next 12 months it gets us to 550 on this chart. >> do you think people are underinvested so that will lend some natural support to this index? >> exactly. for us a trade is overowned when it gets overhyped. health care is not overhyped right now. i even know a couple of health care pms who don't know the sector is at an all-time high right now. >> what kind of pms are they? >> they don't have charts? >> in all seriously, let's pivot to some of the stocks are you identifying as good students still right here. >> i think pfizer is a good example. it's been on a down trend for almost 12 years. that's why no one knows that health care in general has been doing so well because these charts have been so bad for so

long. pfizer today, 24.5. getting through 24 was a big breakout. we think this one can challenge 30 as we push toward the end of the year here. >> i've been right there with you on pfizer and merck specifically, chris. i think that's interesting though is the whole sector is leading the market over six months and even besides the pharmaceuticals, there are so many facets to health care that people don't consider. so when you look at the xlv, for example, there is a nice chunk in there that's non-pharmaceutical. you've certainly got some areas that are insurance related. they really seem to all be going up almost in lock step. i think part of that is demography. i know you are a technician but part of this is just going to be about the boomers and the fact that they're going to want to replace every body part before they're willing to give up. can you talk a bit about how the demography plays into the technicals? >> i'm a big believer that relative strength leads. and when relative strength is improving the fundamentals are probably improving. what we've seen over the last

six months and what's been a risk-on tape is a risk-off sector work. i think given a broader market that might look a little toppy right here, health care gives you a hedge to what could be a tough couple months for the broader market. merck is another great example of a stock that's been basing for five, six, seven, eight years. beautiful rounded base on that merck chart. you got through 44. >> that's a 12-year down trend they're snapping. >> you got through $44.5, you're looking at $60. you can go through health care name, whether it is biotech and pharma and find these patterns. i think it is one of the most compelling sectors of the market. >> as far as takeover targets, ama amerigroup and these other big pops that are clearly going to be stars going forward. is there a line that you draw as far as how big a company could be and still be considered that takeover target right now? or is it virtually anybody in the space?

>> i think what's interesting about health care, when you look at the market cap breakdown, it is one of the few sectors where small caps are acting just as well as large caps. i think that takeover bid starts to show up in some of those smaller cap pharma names. remember, it's been a market that's primarily been driven by mega caps over the last number of months. fact that small cap health care is working just as well as big cap health care, i think is pretty encouraging for the entire space. that's why i bring up that point that the equally weighted health care index is also at new highs. that's an important distinction to make. that participants and breadth has been very good throughout this move. >> chris, thanks for stopping by. i would call glaxo an emerging market company. these stocks are going also -- they're almost becoming growth plays even though their valuations are dropping. the reason why these have become

so popular in the last couple years which i think have spurred this breakout, the dividend yields. this is like owning an annuity and these guys are delivering that and they are spinning off cash and they have patents that are running out and they're selling them down the chain to some smaller guys. >> things for pms, the charts haven't all hit all-time highs. health care is up 15% year to date. tech's up 24%. the other big thing is will they meet the quarter. if they have a dividend and they can hit the quarter -- again they aren't this big global growth slowdown thing -- that's also appealing too. up next, from a not-so-lucky casino stock to a tale of two very different retail names, all of today's biggest movers. the trade of the day. plays that lies behind this curtain will have you speaking the language of profits. to find out what it is, stay tuned. [ male announcer ] trading's like a high-speed train. and you don't want to miss it with thinkorswim by td ameritrade. you get knock-your-socks-off tools,

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time for pops and drops and movers you might have missed. investors are snapping into their slim jayson williams. conagra at its highest level since january of '07. very expensive stock though, 25

tiles earning. i'd probably lay off. >> not a fan. >> pop here the vix, up 1%. >> i love slim jayson williamim. it should go higher. big expiration tomorrow. part of the move today. >> drop of norfolk southern. >> easily the biggest surprise for global macro investors today. commodity inflation is not growth. volumes are the problem. stock was down huge. i think that will be a big economic concern going forward. >> las vegas sands, a drop down 1%. 3,000 rooms a new casino in macao. the stock's down today. i'd hold off a little longer. >> massive drop for jcpenney down 11%. >> yesterday we highlighted that big options trade in the puts. today ron johnson showed 300 analysts around their prototype

store and clearly they didn't like what they saw. piper said even if you did like it, it is going to take a long time for that turnaround to be effect. not very good news on two fronts. >> a pop for the liliger. the first ever was born in russia. the curious cat has a lion for a father. her mother is a cross between a lion and a tiger. and she was adopted by a regular house cat when her mother failed to produce milk. >> i want one. >> it's cute. >> that's really stepping up to the plate by the house cat. nice. >> drop here first solar. >> i think it is because it is still first solar. at the end of the day you got these short-squeeze stocks. 49% short interest. goes from $14 to $24 on nothing? now it is down on gravity. >> drop for freeport mac. >> preept's been holding up better than some.

$37.50 is i think where you take another shot which is let it drop more. >> it's been 31 minutes and we have not mentioned facebook until now. down 3%. >> this has been a monster winner for a week or so but i thought the news was pretty construct. they've going to get into a little bit more commerce, they're going to charge companies to post offers. i'm actually surprised it went down. >> pop for apogey. >> the company made a comeback. not saying it is a housing play per se but this is clearly the highest level they've been since 2008. beat street by 8 cents. they broke through $20 today. still held on to a 10% or 11% gain. >> pop for the limited. up 3%. >> upgraded by credit suisse, $59 price target. nothing like being late to the party. stock is up almost 25% since late june. i don't see it as all that enthusiastic situation for me here. >> a pop for strong hair.

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we are live at the nasdaq marketsite. oracle is out after the bell with its earnings. revenues disappointing on the quarter they reported n. they also just put out guidance -- jon fortt?

>> got me? >> yes. got us? let's talk. >> after hour the stock is just about where it was at the close. investors taking this with a grain of salt. part of what oracle's saying is that currency headwinds had affected this. they are bullish, as usual, about the prospects of hardware and engineered systems. mark herd going on a bit about that. but as you mentioned, software license there guiding on non-gap basis up 6% to 16%. that's constant currency. a total revenue, 1% to 5%. street had been looking for something more like the 5% number. right now larry ellison talking about social, as kind of a tease ahead to what's going to happen at open world in several days at the end of the month. also talking about how they're going to be offering infrastructure as a service very soon. that's something that i believe you mentioned last year but apparently they're about ready to go live with that. we'll be talking about that at open world. he's talking about social within the context of some acquisitions they've recently made.

also sales force arrival out there had quite a bit to say about that in the keynote yesterday at dream force where i was up in san francisco just yesterday. so that's the direction the call's taking right now. >> jon fortt, thanks for thatup date. bottom line here is that at this point the stock not moving too much in the after-hours session. what can we glean if anything for the other software providers? this is sort of an odd time to report. it is not within the grouping of all of the software. >> it's steady as she goes for oracle. the fact their hardware sales are killing them is not a big surprise. sun micropurchase was a major waste of money. what they're doing in the customer service and essentially the sales force, s.a.p. space is where i would say. i think it is very strong. this is where they are very excited. they should. the stock is a rock. pays an okay dividend, steadily marching higher. i think there is some resistance at $33 but the market is not going to react to this revenue

miss. this is a time in their cycle where people are able to get a pretty good grasp that they're moving in their business direction. our next trade here, is the big bank rally over. ubs downgraded citi, and morgan stanley. is it time to bail on the banks. two seem prudent to take some profits after huge run we've seen. >> same thing last thursday. nobody wanted to short the banks. b of a looks like that field goal. have you 950 in march, back to 650, 950 and falls like a rock right back to 919 today. these things are not without risk. there's a lot more risk than just housing to the upside. you still have europe and these banks having to report the quarter which is i think the biggest issue for the financials. >> you see caution ahead in the options markets? >> i do. i think i tie a lot of it back to that greek vote in 10 or 12 days out. the markets are likely to be nervous about what else? they'll be people rioting in the

streets in greece. there will be molotov cocktails. political parties will be going nuts right and left -- especially on the left -- over in greece. when that happens i think financial stocks in europe slide a little bit. u.s. stocks will react to that as well but i would buy on those dips because i don't think that you want to chase them when they're running but i do want to buy them on the dip. >> gold having an impressive run climbing more than 10% in the last three months. but have you missed a golden opportunity? or is there more room to the up side? jeff kilburg, founder of killer management. where do you see gold going? >> the game changed last thursday when chairman bernanke came out with with qe infinity. right now we are seeing inflows to the gld. gld is really standing up to the highs here above this $171 level. on this chart, if you rewind to last august, september, that $1934, double top, technically

we're going there. >> we saw golden cross in yesterday's session, last time we saw that gold practically doubled in the following two years. >> absolutely. i think technically this is very important. i think we'll have a little bit of a pause here. has a lot to do with the election. one thing people aren't focused on, it is a very opaque market but the central bank purchased bullion. 2011 was the highest it's been in 40 years. they are on pace right now to have another record year. emerging markets are buying it. to all the traders on the desk, if you're contemplating making that mr. t starter kit purchase, now is the time. >> after 12 consecutive up years for the price of gold, the only other thing that's gob up that many times in a row is my weight. you look at bubbles, internet bubble, real estate bubble, now you got a bubble in gold. when does it end, how does it end? >> i don't think any time soon is it going to end. continued purchases. japan surprised us a little bit.

china's going to come up with some prices. we're in this bull market for at least another two years. >> do you believe that there is a bubble in gold? keith is implying that there is in fact and that's probably up for debate at this point. >> there is a bubble growing. preliminary. but i don't think we're anywhere near that. i think gold will go above $2,000 before it is all said and done. >> the only way i can define a bubble is if it makes a low or high versus february. again we have had the man print to infinity and beyond. i don't know what he does after that but it does reek of a bubble to me. >> the risk to gold is that the world doesn't fall apart. i think a large amount of the people using this now as an asset class when five years ago you'd be laughed out of the room, a lot of that stems from the fact people are either rooting for the demise of the fiat currency system or expect a get. if that doesn't happen, i think their that is a bigger risk. we know rates are staying low and the central banks have to print. >> i think you'll also see this

react to the debate. again, october 3rd we've got that debate. put it on your calendar, folks. i think it is debate goes well for the president, gold goes up. so will guns, for that matter. smith & wesson and strum ruger. that's not a political comment by me. just watch it. every time his ratings go up in the polls, the gun stocks go up and gold goes up. if on the other hand romney does well in that debate, watch for gold to break. it was shaky today. i'm with keith. i think this thing could break back down into the mid $160s. >> if romney gets anything close to reasonable punch in this debate, he's going to fire ben bernanke and that's bullish for the dollar. can you not ignore that. >> jeff kilburg, in terms of gold, your target of $2,000, more specifically $1,934 on a technical basis, does that get royaled depending on the debate or the election outcome? >> that's going to produce a lot

of volatility. what keith said hit the nail on the head. this is a dollar story. continue race to the base. the dollar's going to continue to get beat up. therefore goal's going higher. in 12 out of 17 of the fed fellow said rates are not going higher until 2015. therefore you got to stick with this trade. >> jeff kilburg, kilburg capital. doc, you noted some unusual activity in gld. >> i've talked to a lot of the hedge fund clients i talk with are basically setting themselves up saying nobody has that crystal ball and knows what the election is going to be -- yet. it is very close, too close to call in most of the swing states and so forth. but a lot of them are buying up side gold calls thinking that if the president does indeed hold that presidency, that then you get that super spike out of gold. but on the other hand, just as keith said, with that correlation that gold has to the dollar and the likelihood that romney would replace bernanke, i think it goes the opposite dregs if he does well. >> you don't see a lot of action

on the put side. >> no, not yet. >> that's shocking to me. after the move in oil. >> yeah. >> still. wow. >> do you guys out there own spy? a lot of people do, right? this is a story you will not want to miss. cnbc's kay kelly joins us now with a preview of that. we're going to be talking about a phenomenon called dividend strategy trading or even dividend stripping in which retail investors in options may be getting disadvantaged compared to some of the big boys. more when we come back. [ male announcer ] at scottrade,

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"accountability zone." kate? >> thanks, melissa. there was some heavy activity in the options market today as the world's most heavily traded stock etf prepares to pay out its dividend tomorrow. tomorrow it is expected to be somewhere maybe even around 81 cents making a nice piece of pocket change for those who old it but for options holders there is a hitch. unless they luck out through and on secure lottery system, they may not be able to take the dividend unless they already exercised their calls. that may seem reasonable, but to some retail options traders they're outraged by what they see as an unlevel playing field between themselves and some of the big market makers that also trade options. brokerage firms whose names we all know. many of them say these traders engage in a practice some people call dividend strategy trading or even dividend stripping in which they buy blocks of spdr call options late on dividend

day, and capture the dividend payments tomorrow. they may even buy the block from a competitor and sell that seller a same size block so they can both get the call option, exercise it and take the dividend. they can do this because rules on nearly every options exchange, also the nyse, allow them to. gary katz who runs the international stock exchange and does not allow this strategy trading says the practice is wrong and he finds that options trading volume seems to migrate away from his exchange on days like today which he's the buts to some of this activity. so where do we stand with this? some options traders estimate that the losses to retail investors can be in the hundreds of millions per year. nasdaq which owns t-- as of mid afternoon today, options volume was 700,000 shares higher than on an average day earlier this month. much of that traffic was from

spdr dividend trading which it was, there may be some angry retail investors tomorrow. >> shocking but not shocking. this is i would imagine a fairly common practice. >> it was something that i used to do but i couldn't do it the way they're doing it now. >> were you a stripper. >> i was a stripper. >> wow. >> stripping is the term, you guys? did i get it right? >> i call it flipping. but some people might call it stripping because you're flipping over and over again. but back in the day they used to arrest you if you did what they do now. in other words, if you went in with a preplanned trade for me to sell melissa 100,000 and buy from melissa 100,000, they'd say you're painting the tape. they wouldn't let you do it. painting the tape, putting up artificial volume. that's what i disagree with. that's what they are doing now. i think it should be stopped. i paid six-figure fines in the past for even people alleged that i did that sort of activity and you have to settle with the s.e.c. >> why are they able to do it

now? because the exclang all went for-profit? is that what's changed? >> it is. i agree it should be stopped. the fact is any investor who owns an in the money spy call and chooses to exercise it will get that dividend but they'll only get it because they are a shareholder of that etf. >> one of the issues is here you could say, hey, retail options holders, why don't you just exercise your call and you can get the dividend. but that's expensive. the reason people use options, is it a cheap way to play out your hunch and see if it works. you may not have the money to exercise all those calls and turn them in to spdr shares. >> if you hold call options that are in the money, you don't know whether you should exercise it, you could simply sell the option. go in the next day and buy the thing back if that's the kind of exposure you want. really the only people who are being disadvantaged here are the people that hold options and fail to do the right thing. that's all that these firms are trying to capture.

>> kate kelly, great story. one of our contributor has a trade that's sure to have everyone talking. our trade of the day up next.

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it is the time you've been waiting for -- the trade of the day. josh brown, what is it? >> i'm going to talk about nuance. nuan on the nasdaq. people that are playing the smartphone and the iphone trade know this stock, but what a lot of people don't realize is there is a lot more to this company. let's get into the technicals very quickly. we put a trading buy on it this morning. it double bottomed at $20. very, very significantly the volume confirmed, et cetera. so we think there is a really good risk-reward setup. stock probably trade into the 30s. there's not a lot of resistance between here and there. people should understand this is way bigger than just the iphone. this is the voice recognition technology. so you can talk to siri, but you can also do a lot more with this. in autos there is a huge growth potential and they're doing business with all the major manufacturers. health care dictating medical terms over the phone. any time you call customer

service, before you get a human operator, we talk about how this economy is all about replacing humans with software and with robots. this is a really good example. can you carry on an entire customer service related conversation with nuance's interface. i think what's really exciting here, 20% growth is what's expected as far as the eye can see and nuance almost basically owns the whole space. we like the name technically and fundamentally here. >> nuan, trade of the day today. coming up in the next hour on "mad money," a discount retailer that could be on sale. cramer has an exclusive with the domino's ceo. and jim's seeing if it is time to tweak your tech thesis. we've got the first move tomorrow when we come back. stay tuned. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong.

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i know the name of eight and tea parties.expert . i'll have more awkward conversations than i'm equipped for because i'm raising two girls on my own. i'll worry about the economy more than a few times before they're grown. but it's for them, so i've found a way. who matters most to you says the most about you. massmutual is owned by our policyholders so they matter most to us. massmutual. we'll help you get there. time for the final trade. let's go around the horn. >> watch those next dividend dates if you are long in the money call options and be sure to adjust your money position before then. >> i like nuance. >> that's it. keith. >> that's my story. >> underarmour, one of our favorite stocks was down today. buy it. >> i like data storage provider,