tonight, resurrection time for apple. >> it is my creation! >> the tech giant gets a crucial earnings period and brian sullivan has a way to double your money in just one month. plus, what's carl doing with netflix? how you can get in on the streaming giant for a fraction of the cost. and talk about playing the odds. >> guys, what's the first lesson in poker? >> never bet on the emotion at the door.

>> actually, brad, it's risk let to make more. and a trade that can triple your money on las vegas sand. the action begins right now. >> i'm melissa lee. these tr traders both here on the desk and in beautiful los angeles. the only thing worse than being steve cohen is being a tech stock. microsoft having its worst day since the final crisis. revealed concerns about the profitability of mobile search. what stock does this matter most to? facebook. today, a massive bearish bed came through. over 85,000 contracts worth of long dated puts traded hands. is this stock in for more pain? doesn't look good in terms of the positioning in fb. >> some of the trading that went on, basically, a trader was buying some stock, really protecting themselves by buying

a downside put. that means they think the upside the facebook is somewhat limited over the next year and a half, but having said that, there are a lot of good things going for facebook. you look at the mobile world and people feeling that could roll over to facebook, so that's why facebook was down, but really, facebook has tremendous amount of growth potential here. they're just getting into that emotional app world and not to mention they have a tremendous opportunity in areas of europe and asia where in europe, they're only 50% market share. in asia, 25% users of facebook, so there is some opportunity from you know, the asian community or some in that area to sort of grow some of their user base. >> mike, do you also make the differentiation or do you hear trouble in monotizing emotionalization? you know what? facebook's going to face the same. >> in google's case, i think their effort to monotize rather than control the environment is having an impact on one of their

r revenues. it was pointed out yesterday they've had seven revenue misses, but they are going to control the mobile environment. they're going to be the microsoft of emotional phones. facebook, here's the biggest thing with that stock. it's where it's ipoed. everything they're doing would seem heroic, but they didn't. that stock is in trouble. >> all right. scott, what are your thoughts on facebook here? >> i think facebook would be really happy if they got back to where they had ipoed and the real problem with the option active in facebook today was that it was really long dated. if somebody is selling upside calls, they don't see this thing getting back to $38 anytime soon and if you look at the facebook chart, facebook in 2013, it shows lower highs and lower lows. it's really distressing. i don't know how they break out. it's just another stock now. >> let's be clear, brian. you've mentioned opportunities in europe as well as asia. near term, you are still

positive on facebook? >> i think there is some opportunity. the fact they're going out and being aggressive, they brought up instagram, maybe offering video demand, which according to jefferies, could be a billion dollar industry for them. that being the first foot in the door here, i think there is opportunity for the stock to move higher and on a technical basis, we felt like it kind of bottomed a few months ago and at least there's some upside momentum here. it did not sell off that hard today. >> google was only down about 1.5%. facebook was down almost the same today. >> the problem with google and facebook has always been mobile. that's absolutely the fact. >> all right. brian. he's positive. he's buying the calls for facebook. it's a bullish strategy where you cut the cost. the goal, you want the stock to go to the high strike. that's where you make the most money. also where your profits are capped. brian? >> 55%. margin in terms of margins, so i

think there is some upside and buying a call strength gives you that upside. what i'm going to do is risk less to make more here. i'm going to look at the august 25 calls. i can purchase those for about 1.75. at the same time, selling the august 29 call for about 25 cents. so net net on this trade, i pay about 1.50. break even is 26.50. in terms of the ris reward play, i kind of like this because i'm risking a buck 50. the reason for selling that upside call, i don't think it's getting above 29, but i like the upside chances. >> mike, you were very clear about how you felt about facebook stock, but for this trade, do you think it's well structured? >> i think this is the only way i would make a bullish on facebook. this is the only way to not risk that much, so if you're so inclined, good for you, but i'm

a not a facebook user. i'm not going to buy facebook stock and probably not going to buy this call either. >> want to buy 100 shares of facebook going into earnings? that will set you back about 2600 bucks. brian can double his money in just about a month and will set him back about $150. let's move on to a story many consumers now. pain at the pump. american consumers looking at what could be the most expensive summer in five years. let's get to jackie deangeles. she is back at headquarters with the story. >> hey, melissa. gasoline, it's been on fire, rising some 15% in three weeks. that outpace in crudes run even as oil hits its highest level in 16 months. traders are blaming supply and refinery issues. a few key refineries have operational problems, others are shut down for maintenance.

all this coming just as the summsu summer season is boosting demand. aaa reporting that gasoline prices have driven by 15 cents a gallon. the pain at the pump affecting the consumer? we posted a poll to futures now asking that very question. 86% of our veet voters said that gas prices, the rise they're seeing, it is affecting their travel plans, so the question now, how high can prices go. according to anthony, the gas rally will probably continue and keep in mind prices at the pump haven't even factored in the move we've already seen in the futures, so the bottom line, according to traders, you're soon going to be filling up your car with $4 gas. >> thank you very much. now, the question for investors at this point, what sectors and stocks could feel the pain from gasolines gain? let's call to the charts and get some answers from carter. you always think consumer

discretionary will feel the biggest hit. >> that's right. it alters people's plans for driving, how much, and also their plans by what they're going to spend at casual diners. what i wanted to look at cheesecake factory. one of the most extended restaurant stocks. we think you faded here. here's a two-year chart. a well defined trend. of late, this year, the stock is up 33% since jan 1 and we've blown through the top of the channel. basically, it's over done by the score. here is a five-year chart. i spent a lot of time trying to examine how a security responds to its moving mechanism. this stock is well above the average. just as far above as it was the last three or four times when it did peak, so that's another circumstance that makes the case. here is a five-year chart and it puts in context the six-year move here. the 33% move we have broken out.

we believe we've met the objective of that breakout. two more charts just to draw the lines different ways. here is a stock that had an epic plunge of course going into the '09 low and we've recovered all of the lost ground. finally, another way to draw the line, if you prefer to name your patter patterns, this is the head and shoulders. the bottom, neckline of the stock, has indeed broken out from the neckline. by in measure, by my work, this stock has priced full and better off selling that buying. >> priced full. how apt, carter. thanks for that and mike, we want to get your take on kay. >> i would also be a seller. 2012 consumers hustle budget spent the most they have on gasoline and they're going to spend more this year and of course, we had the employment tax increased. that's also cutting back on household budgets. i don't see how discretionary spending can keep up. this is not a name that has a lot of growth and nap track,

which measures year on year growth in the casual dining sector showed it declined 2% in june of this year from the previous year, so basically, all the evidence suggests there's less money in consumers pockets and evidence shows they're not spending as much in casual dining. i'd be a seller for sure and so, actually, taking a look, they're going to be reporting earnings next week. normally moves over 5% implying less than 3%, so options are cheap. the way i'm going to play that is i'm going to buy a put spread. >> it's a great structure for beginning traders. crack open the play book here. again, a bearish trade. to reduce your cost, how do you make the most money? you want to stock to fall to the put of the strength you sold. that's where you make the most money. also where your profits are capped. so mike, walk us there u. >> 29-day trade, i'm going to spend 75 cents for the 42 puts. i'm going to sell the 40s against it for a quarter. that's a net debit of 50 cents

or 25 of the distance. it's an inexpensive way to make a bearish bet on the name. >> what can work is what chipotle said is food inflation is stabilizing. >> you know, but the problem is they're actually stabilizing costs, all of these guys reciting higher costs, that includes dri, darden restaurants, so stabilization, their margins have been depressed. >> darden, that chart does not look nearly as good as cake -- so, i think that cake and chipotle are kind of unto themselves. it is absolutely a countertrend trade. that said, i'm not the bigs fan because when i quo to the store, i get in the line that's moving the quickest because i think it's going to keep moving quickly. i don't want to favor spend and win just because i think it's doing well. >> got a question, we'll answer

after the show on your website. our site has been redone, so you do want to check it out. scott's got a trade on lbs. here's what's coming up next. it's apple's secret indicator and right now, it's flashing a huge buy sign. what is it? we'll reveal and tell you how you can profit from it as apple reports earnings. then, carl icahn reports why he's not selling a single share of netflix. but is it just a house of cards? [ indistinct shouting ] ♪ [ 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. ♪

[ 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.

it has been a tough year for apple. but since last earnings, it's been a pretty decent run for america's favorite tech stock as its rallied 8% in the last three months. >> you can actually look at some of the volatility going on there. the implied volatility. as we talked about before, let's look at an example of s and p and the vicks. you see this negative correlation. when the s&p rises, volatility falls. fear falls. when the market falls, you see the vicx spike. apple also has a vix to it. there's a vix apple and that's measures the price of options people are paying for apple and it also gives a gauge of fear. what happened in february, as apple was falling on each successive fall, we saw this negative correlation, but look here, folks. volatility rises steep in this

last little plunge for apple and where people are doing is puking out their positions. over the next few months after that, this negative correlation stops and when apple reaches its peak of fear and panic in the marketplace, we see fear start to subside. apple makes about the same similar or low here, but volatility is cut by a third. meaning basically, option traders picking bottoms, trying to buy into the stock. that was the moment to start to get long apple. >> brian, what's a trade? >> basically, the stock's moved a little, but i like it. i'm buying a call spread, which gives me basically risk reward, better parameters of buying the stock. i buy the august 425 call. i've basically paid 950 and i have all the upside potential from 434.50 up to 450. i think apple over the next month and into earnings trades

450. it may even go higher. that's sort of a resistant point. >> for regular readers of carter's weekly letter, they will know he has liked apple since january. what to you see in the charts that convinces you that apple's the way to go? >> used the word bottoming out and that's what we see here. there's a good characterization. you get long here, you don't get hurt. it's got a lot of pop. >> scott, do you think it's finally time? >> i think if people dislike it so much that it probably is time. as soon as people start taking those $1,001 price targets and bringing them down, then it's going to be like jet fuel for an apple. >> mike? >> no. i don't think so. >> no, really? why? carter made such a good case. >> the growth story in apple is all but over and this thing is probably more likely to be range bound. it's probably going to get some

spikes because there are still some skeptics. i am not among them. if anything, i'd probably favor maybe selling some puts or a buy right. my expectation here is that the stock's probably going to languish a bit. >> as i go through my day, portfolio manager after portfolio manager, apple will be brought up every time. it doesn't come up in meetings anymore. people don't want to talk about it. it's energy, financials, google. that's a big tell. when people love something, they want to talk about it. >> i think scott made a great point, too. >> that goes without saying. >> apple has not been able to get above 450, so it makes all the sense in the world to sell that call, make the trade cheaper. >> i didn't know you were such a delicate flower. >> evidently, i am. >> coming up next, carl icahn explains what he is doing or more specifically, not doing with netflix. back right after this.

[ indistinct shouting ] ♪ [ 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. ♪

from [growl]itrade. we used to live with a bear. we'd always have to go everywhere with it. get in the front. we drive. it was so embarrasing that we just wanted to say, well, go away. shoo bear. but we can't really tell bears what to do. moooooommmmmm!!! then one day, it was just gone. mom! [announcer] you are how you sleep.

tempur-pedic. [ 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. one share, i've told you that, but he doesn't believe me. >> oh, i believe you, but you guys change your mind a lot. >> share and the credit goes, the credit goes to two guys that won that fund, won that account and they're both great. they both have a huge success in the last two years. one's my son and when i wanted to sell it at 100 points ago, i really wanted to sell it, my son threatened to leave. it's my son. and i really helped that kid all my life. >> and together, carl and his kid have helped netflix shareholders continue to be the best performing stock in the s&p 500 so far this year, but a key test comes monday after the bell when the company which got several emmy nominations for its

original series reports earnings. so it too late to get in? let's call back to the charts, see if he wins this year, carter. >> okay. so, i have one chart and let's just dig down and analyze the one chart. this is sort of the whole shooting match. you have what you see is a bull phase. 50 to 300. a collapse. 350, a bottom and then the recovery. we have recovered almost all the lost ground, but it's the symmetry that's so important. meaning the plunging that went on at the low, the resurging that took place as of late. that high is 305, the stock closed at 264 today. a 50% move would take you right to the high. it's symmetrical, orderly. you can't talk about valuation because what person could explain 50 to 300, 300 to 50

back to 300. what isn't absurd is the chart. get long, stay long, looks good. >> it's hard to imagine the word orderly also being attached to this sort of move. mike? >> it's interesting. fundamentally, it's hard to get behind this one. trading at a very rich multiple. it's 14% short interest. you don't want to short a stock like that. icahn's long it. and the other thing is house or cards is interesting. they surveyed some of the subscribe subscribers, 86% said they were more likely to maintain their subscriptions, only 8,000 people were binge consumers and canceled their subscriptions. it seems this original programming idea would work out. that said, i'm not inclined to chase stocks like this. i would describe as a meteoric

rise since the beginning of the year, so i'm going to buy a call spread. >> i'm looking to buy the august 250, 280 call spread. 30 bucks. sell the 280s at 15.5 bucks. the stock is trading at almost 265. this is a way that you can spend relatively little, about 15 bucks, to get long netflix. >> all right, so brian, what do you think of this trade? >> i think it makes a lot of sense. the stock seems a little overextended, trading over 10%, but i like the stock. i like the transformation they're going through in their original programming. this was hba 1990s style. i think the same could happen for netflix. that's what you want to see out of a tech company, transform itself. i'm a buyer, not as these levels. gives you that protection to the downside, but i like carter's take at $3 a share. >> it enforces some discipline.

if you buy the stock, it doesn't do what you think, it's easy to two years later, oh, i still own that. this enforces discipline because the option expires and you have to move on. >> you have to use the spread any way because they are announcing earnings next week, so that's a good move. if you're going to make a bet, that's a good way to do it. >> up next, cramer has got the big -- up soaring and much more. next, the final call from the options pits. [ indistinct shouting ] ♪ [ 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.

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[ 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. time for the final call. >> put spreads on cake into earnings. >> this week, lvs. another trade that enforces discipline. >> brian. >> i know you miss the pom at

apple, but buy a call spread. >> thanks so much for watching. for more, check out our website. we will see you back here next friday at 5:30 p.m. eastern time. have a great weekend and stay tuned, "mad money" starts right now.simple, to make you money. there's always a bull market somewhere and i promise to help you find it. hey, i'm cramer. welcome to "mad money." want to make friends, just trying to make a little money. my job is not just to entertain you, but to teach and educate you, so call me. after dow dipped five points, nasdaq back slid