now you stay safe. bye-bye. this is options action. tonight, bullion summer bummer. >> sell, sell! >> gold has it worst quarter on record. but turn gold's pain into your gain. explain how. plus will karl icahn bid for struggling blackberry. how you can profit from a potential takeover. and think apple's going below 400 bucks a share? scott nations has a way to

double your money if it trades down to 395 by the third week in august. we begin now. live from the new york stock exchange in times square, these are the traders. another volatile week, the first losing month of the year in the books. there's trouble ahead in earnings season. why it wasn't the performance of stocks that reported this week, but perhaps what the companies said this week, and a couple of notable examples, dan. >> a week that was really come natd early on by fed speak. we got a glimpse of what we may see in july for q2 earnings. nike was good for all intents and purposes. they did speak to china in the second half. could be worse than they expect. not different than what we heard from fed ex. they are talking about weakening demand in asia or the weak

global economy. and the sen jury that gets their revenues from overassess, levered to global growth and i.t. spending. they are talking about weak asia. these are themes into q2. >> and blackberry, incompetence, that's your friez -- >> blackberry is stock-specific. one theme in the smartphone space may be the high end smartphones are saturated. the z-10, that is a high end smartphone, and not selling well. >> i would say with, the only litmus test, is everybody carried a, i'm not sure how many of us do? i don't. do you? that's the question. they make a device that was once in demand, they had clients they no longer do. you are looking at the parts of this company, is somebody going

to bid it? that's a speculative exercise. don't chase that until you get a firm bid. and with china, look at the broader economic data, but look at electricity generation in china, that's declining steadily. manufacturie ining activity is down. the evidence suggests things are slowing down. they have tremendous reserves, and the fed could step back in. >> i think the story this week and the last half of the week was china. look at names tied to the dollar or china or both, they're having a tough time. i think the interesting story was deere, they announced earnings, beat by two cents, but talked down the forecast, and see names like cat and joy global, just the poster children for how china should work out, and the charts look horrible. lower highins and loess, and because they're tied to china. >> and i would add one more theme.

facts or research had it out today, guide down rates hitting the highest levels in years and years. when you think about companies, but, you know, almost a fifth of the s&p 500 had guided estimates down. they're hitting lowers estimates. this is a theme we were going to see, and don't forget companies are buying back stock hand over fist. that helps the earnings per share number. >> all right, you guys are gloom and doom across the board. you're going to fedex-specifically for a trade ahead of earnings, why? >> they reported, it was a lackluster quarter. they derive a lot of the future growth and overassess, 30% from overseas. the quarter was met with enthusiasm, it was up 3, 4%, and then got sold down. it's at a good technical resistance level, and i think the themes we are talking about are going to take center stage.

create a structure in fed ex that defines horrific and gives me a wide band to be profitable on the down side. >> this is a put fly, it's tricky. here's how it works, bearish strategy where you sell two lower strike puts against it, but then buy a lower strike put, it's complicated, but the goal is simple, go to the short, that's where you make the money. what's the trade? >> it's not as complicated -- what i'm doing is buying in the money put fly in august when the stock was 99.5. i looked at it today, august, 195, 90 put fly, and costs about a dollar. i was buying an august 100 puts for $3.55, and sold them at $3.20 total, and bought one for 95 cents.

cost me a dollar. it's at 99.5. how i make money, on august exprigs, i can make up to four times my money. remember, this is in the money, right now. i lose that dollar gov 100 or below 90. that's a good range. if you are bearish, i think it's a good name to pick and good structure. >> would you pick fdfs? >> i would choose it. when you have international economy is slow, what that does with them, it hurts their most premium services. you might have people shipping, ratcheting down to lower margin services. that's a really big impact on the eps. does anybody expect that to change materially who's sitting here or watching the show? i doubt it. this is a good way to make it. >> the premium services are the high margin services. if you look at chart, it's not got no business over $100 a

share. this makes sense. you can leg into this a little bit. buy the 95-100 put spread, and sell the down side. remember, a butterfly one spread against another, it's a great way to do it, use limit order the to put it on, and willing to take it off earlier than expiration. otherwise you're threading the 95 dollar strike price. >> move to gold, some are calling it a precious medal. bullion got a significant bounce today, but gold bugs could be in for more losses. >> reporter: melissa, gold lost 5% this week, capping off the single worst quarter on record. the fed may to blame due to the easy monetary policy through inflation. the dollar index is up 5% on the year. and now that bernanke is openly

talking about the end of qe, a major rationale for owning gold is going away. non-income bearing assets like gold become less attractive. the yield hit its highest level in almost two years. where is gold going next? according to ii trader, since 1970, there have been five gold bear markets. gold has lost an average of 48% from the high. if that figure can hold, you could be looking at $1,000 gold. >> thank you very much. and a thousand dollars is what they said gold was going to head to. >> well, i would say, go back and look at what gold did in 1980. that was sharper than 48%, dropped 63%, that could go to 700 an ounce. it it is non-income producing asset, it's not an invest. why does the investment

portfolio contain it? you are not backstopped. see how far the market has seen it come off. and the fed activity, all of these are reasons why the people might be concerned. when things start moving, people panic and unwind it. i could see a technical bounce. i'm goik to make a bearish bet. if you see a technical pass, it may not be over. >> mike is bearish, using a put spread. great strategy for beginners. let's see how it works. buy one and sell low to cut your costs. do it when you're bearish, the put strike, that's where you make the money. that's where it's capped. walk us through. >> i was looking at october 121.17 spread, and paying $7.40, and sell the others against it, that's a net debit of a dollar and a half. at the time, gld was trading at

118.5, in the middle. i'm looking at a risk-mitigated way to do the coin toss trade. that's a way to make the bet and limit the risk. if it continues higher, you have the benefit by only committing the dollar and a half to the tried. i take a look at the situation, i think that gold could go lower, but i am acknowledging that it could have a technical bounce. >> i think it's an interesting trade at 1200, people are calling the bottom. it's a shame we don't have carter here, we have dummies talking about charts, when i look, i see a range of 1,000 to 1400 that it could bang around. if mike's saying he thinks it's a 50-50 shot, i think it's a good in the money put spread. you're not going to make a buck 50. you're going to cover it before october expiration. >> but you can go in and out of these trades.

this is a range-bound market, play it, put it back on. >> i hate gold. three calls for every two puts today. and buying calls is the only way to be bullish in gold. >> stocks versus options. to want short gold, some would say you're crazy, gold can rise as fast as it can fall, and mike's put spread limbs the losses to $150 pop got a question, send us a tweet @cnbc options. tonight we tackle questions on apple. but in addition to the apple trade, find great blogs and exclusive trade. meantime, here's what's coming up next. >> is korl looking to buy battered shares of? >> i can hardly spell it. >> some options traders say yes, why and how you can profit. could google's best day be behind it?

in or out for the second half? that's what options action returns. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.

♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ research in motion, is in any interest now down to $13 a share. >> it was short i guess. kept linking my name to it for the last month. i can hardly spell it. it's a difficult area right now, and i will tell you as a freebie

that i'm not involved. >> that was the man, the myth, the legend, just over a year ago talking about his involvement or lack thereof in blackberry. shares are down 30%, will summon make a play for research in motion? >> this company has been picked over for years and years, management changes. everybody who is a potential buyer or activist has a good opportunity to take a close look at the business. there's no takers. lenovo was attached to it, that could be one potential takeover candidate. i don't know what they do over there, but if he doesn't win the dell thing, did motorola, stuck with it, there are assets that are untapd, and get value. i am involved, put an option trade on yesterday, and i'm

down, but willing to sit. >> they make money, buckets of it. companies like this, have a lot of assets. this is the same story with palm. this is the way with technology companies. the values decay when technology has a replacement. if it's going to happen, it will be soon, that will be another technology company. i don't see an activist spinning off the assets. >> you say you're involved ? >> don't do what i did, i'm losing money. for those of you what the to buy calls, they're expensive, 25% just jacked, finance that. looking at this trade, if you want to look out to january -- >> hypothetical, this is not a trade you have on? >> no. but you should look at this. see it settle out. and call calendars. a lot of people to want run out and buy january calls. i priced it up when the stock

was 1075. the january call calendar, selling one of the august 12 calls at 45 cents and buying january for $1.30. that cost 85 cents, i want to get to august expiration, be at 12 or lower, have august roll off, and then own the january one for less than i would have paid for it. sell the higher strike call and sell it. >> i don't like playing companies for takeovers, but if you're going to do it, this is the way to do it. dan says you can keep selling calls. the shorter data calls. that's a super calendar, jongest january, ask sell shorter once. the math works for you again and again and again. >> is the only hope that an activist will come in? >> well, actually in this particular trade, you hope nothing happens. if nothing happening works for you. even if somebody came in and the stock rocketed through, you're

in a put calendar. that's okay. i think this is something that's going to take time to play out. >> this is -- this stock was left for dead at $6, trading below cash, and it tripled. things feel horrible. and i cannot make a good argument. >> this is horrible after a new ceo, new operating system -- >> it's a disaster. but they have an installed base of 75 million users. and they're trying to make things happen. i think activists should be interested. >> when we come back, it has been a great year for shares of google. should you stay long for the second half of 2013. tell you how the traders feel when we come right back. stay tuned. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros

with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.

♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪

welcome back to options action. time for total recall, take a look back on previous options chain. we made a trade on google, it has been so dramatic it has been made into a movie. here's a preview of what some are calling a ground-breaking film.

>> in a world where risking less to make more is key, two men are about to be dethroned. the idea seems perfect. >> chart is excellent. >> but buying 100 shares that cost $87,000, so to spend less, they instead bought the google august 900 strike call for $27. now to make money, these two needs google stock to trade above the strike price by more than the cost of the trade, or $927 by august expiration. but then they took it up a notch. >> the stock's going higher. sell against -- >> and reduced their costs by selling the august 940 strike call for 13.50 and created their call spread.

but they did something even better, they made making money easier, and all it took was simple math. that's because between the $27 they spent buying one call, and the 13.50 they spent on the other, krorl and carter reduced the cost to just $13.50. now instead of needing google to trade above $927 to make money, they can see profits if it trades above 900 bucks by more than the 13.50 they spent. or above $913.50 by august expiration. but even the best plans go awry. and since the time of the trade, google shares have been flat. making this trade neither a winner nor loser. now, two men must fight to reclaim their trade and the crown in what rolling stone is

calling the options event of the summer. mike coe, carter worth, and mel gibson -- perhaps. star in what should i do with my google trade? >> all right, let's see if we can answer than carter is not here, he's no hollywood trying to cut his next deal, but sent a postcard detailing it. hello from beautiful los angeles, it doesn't get much better than google, it's hanging in like a champ compared to equities and other technology stocks. to wit, it's outperformed the s&p to month, year and date, stay long. hugs and air kisses. now we know what he's doing, mike? >> the reason we put it on is the market had a big rip, this was trading at all-time highs, and looking to press a bullish bet. stay in the trade, the stock is holding in there, you still have

time to pan out, and we haven't risked that much. certainly not relative to purchasing the shares. i would look at this as the way to play it. >> didn't risk that much. and i like the 940 stripe, 920 is the 52-week high, if you expect that level by a reasonable amount, you're happy to sell the 940 strike. >> let's go to your trade with the update? >> i'm going to stay in. the i think the update is -- if you haven't put it on, and the bullish bet, this is a decent way to play it still, it's going to be cheaper because time has passed. we have seen volatility, spreads make sense, this is a way to press a stock that's outperformed the market. >> and google has many options. >> and a reminder, if you want updates follow us on taert @cnbc, and the trades on twitter. stay posted with the trades on

facebook.com/options action. coming up next, the final call from the options pits. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.

♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim

from td ameritrade. ♪ all right, check this out, south korean researchers developed a robot that learns human dance moves. it uses motion capture cameras to track movement it is it can do the gangnam style dance, that's tonight's edition of optional viewing. scott nations, kick it off. >> web extra, all about what to do if you're a little bit bearish in apple. >> dan. >> i expect earnings season to be rocky. i want to take advantage of some of the recent strength in u.s. multinationals in the next week. and short fed ex. >> mike. >> i wouldn't expect a whole lot

of god out of this quarter's earnings, and bearish bets in gold, put spreads, it could set up. >> our time has expired. check out our website, see us back next friday at 5:30 p.m. eastern time. have a great weekend. (male announcer) the following is a paid advertisement for tommie copper compression wear. (male announcer) what if pain prevented you from doing your job? >> there's a few things in me that are slowing down with age. your body just doesn't have it anymore. (ron) it's pain. real pain. i was in so much pain i could not maintain my business. (male announcer) or pursuing what you love? >> my pain seemed to really restrict my mobility. when i hit a golf shot, there was nothing there. i did not want to play golf because i was embarrassed. (male announcer) or even got in the way of raising your kids? (april thomas) [crying] i wanted to just, just give it up. (male announcer) 100 million americans live with pain.