tonight. separated at birth? no, not those two. these two. because options action has discovered the shocking similarities between tesla and amazon. we'll tell you what they are and how you can make money from it. plus, how would you like to buy disney stock ahead of earnings for just $2? it's not some fairy tale, but it is our options trade on the mouse house and we'll break it down and move over, carl and george. because mike made 30% in her

ball life in just one week and now, he has a way to make even more. the action begins right now. i'm melissa lee. these are the traders here on the desk. forgive yourself if you feel like it's 1999, but internet stocks are on fire. just check out this week's names like yelp, lipgedin, facebook. is this a sign the rally is just heating up? dan, good, bad or ugh will? >> they have been be working, they're u up fabulously. it's web 1.0 versus 2.0. because what's not working is ebay. to me, it's all these names that you want to consider. i think of them as like tab stocks. they should be a tab on a broader internet service. when you think about pandora and zillow and some of these other

things. they have small floats and i think people are reaching for things that can perform and push these things around and it's working. >> one of the things that's also in common, at the time we had the last internet bubble, all stocks were frothy. including names like the staples stocks. the only thing i think is a good sign in this is that you see stocks slowing down on some fundamental news, so that shows we're not at the same level of exuberance. people are looking for some numbers. that said, i think there are a lot of stocks look iing a littl bit pricey. >> they're pricey, but people think they know how they're going to make money. they're going to sell advertising instead of amazon. we still have amazon. i'm still trying to figure out how a.m.smazon is going to make money. they know how the platforms work out. >> they do know how they're going to make money.

they're going to sell advertising. facebook has figured out how to do it and now, linkedin has figured out how to do it. >> facebook today finally closing above its ipo price for the first time. doesn't this give us a signal this we are in a different period? if this were 1999, facebook shares would have gone public. >> we did do that. since their ipo. stock was in the dumps for 14 months. the whole street got this wrong. everybody was off sides on this thing. that's why you have a company last wednesday -- >> the stock in the dumps. there was no rerating of expectations in the internet sector? >> nobody knew how facebook was going to make money on mobile. nobody goes to their desktop anymore. >> the options market has told us that a lot of the exuberance that a lot of these stocks had incorporated, take a look at the volumes that traded in facebook. this was a name that was trading

over a million contracts a day. this was representing maybe 7, 8% of the entire u.s. options market. that is what caught me by surprise. somehow, the buzz came back to that stock and buzz is what propels these names. not fundamentals. >> to be fair, on may 31st on this program, i think we were all in agreement when facebook was trading at 22.5. we laid out a call calendar so to me, i think expeckations got really low. i was willing to create an options structure that gave me a right to buy it in the future. >> let's bring in the calm analysis of a technician, the one and only carter of op n h oppenheimer. >> thank you. well, it's all about time frames, but day-to-day and this is the most important thing. something that's gapping up and getting repriced, momentum is a

powerful thing. you don't try to catch the falling knife. it's dangerous to be short something that is being reset in an aggressive way. a group chart. facebook, linkedin, angie, yelp and it could be others. but they're equal weighted, juxtaposed against the s&p. the truth is they're not that extended above the general market where as of course we know that the prospects are quite a bit better than the job market. valuation notwithstanding. we would think that momentum is on the side of these stocks and for the most part, being shorted, i would just let the winners ride. >> i take total issue is that exact comment. all of these stocks were left for dead last year. here's a situation where i think i think you have the s&p and highs, you have the situation where people are trying to chase

performan performance. >> i think the real thing is that there's not price, they haven't met. my gosh, we've got to get this linkedin. there are a lot of people that aren't involved yet. >> it's up a little bit and hasn't had a sharp spike. remember when netflix, it was there for about a flash of an eye. a second. these things are lingering. >> as long as these companies don't do something really stupid, i think they're -- >> well, that's always a good -- company's are in okay shape until they do something really stupid. that pretty much applyi. but dan on facebook. >> this massive user base and have just throwed the street --

haven't been in their private life. their doing things well. the company did urge two investors on the conference call, they are not going to see the same growth rates in ad service they saw in this quarter and next quarter. to carter's point, you do not want to short the stock. i think the stock is going to consolidate here. i think you're going to see volatility. a big spike on that 40% move. i think it's going to compress over the next few weeks and i want to set up a way to own calls cheaper than it would if i just bought them outright for what is going to be the next identifiable catalyst in october. >> no surprise. dan is using a cal calendar. let's open up a playbook. tas bullish strategy. how do you make money? it require as little timing, but you want the stock to stay below, but above the call of

second expiration, so this requires some timing on the call calendar. >> i'm using august, expiration two weeks from now. i don't want to be too cute here. i'm selling at the money strike. i think 38 is going to be big level. a lot of people have memory of where they open that stock $38. so what i did today when the stock was 38, i actually bought february, august, october 38 call spread for 1.30. i sold one of the august 38 calls at 1.20 and one for 2.50. that's 1.30. what i'd really like to do is for the next two weeks, the stock -- i want that stock to close below it, idealy and have that august 38 call. then i own october and i have optionalty here. i want to further spread that by selling a higher strike call and set up for another rim.

45 was basically the high. >> they are not a lot of places to sell data, but this is probably one of them. it's the hot stock where there's a lot of premium and all of that exuberance is something you want to sell, so i actually favor a trade like this. >> do the math. how much are you paying for that long option per week versus how much are you getting for that short ended option. calendars can be bullish. 90 would be perfect. >> let's wrap this up. little stocks versus options. want to buy 100 shares of facebook? that will set you back almost four grand. dan's call calendar offers big leverage to the upside and risks just 130 bucks and speaking of the internet, you want to be sure to catch cnbc's new documentary, twitter revolution, hosted by carl. that premiers next wednesday. that is must see tv. got a question out there, send

us a tweet. we'll answer it in our one-on-one extra after our show on our new website. tonight, scott's got avisa. here's what else is coming up. >> this is the life. last week, mike made a bullish bet and the trade's already working out, but how can he make even more money? plus, could tesla be the next amazon? some data suggests that very well could be the case. we'll explain what it is and how you can profit from it. [ 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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it is the investment equivalent of crack. we're talking about tesla. shares up over 360% in the last year. set a new high in today's session and according to the charts, the stock is showing striking similarities to another high flying tech name. let's check in with carter to find out which one. carter? >> it's kind of fun, actually, there are analogs in life and this might be one of they will. so i want to start with amazon. obviously one of the great winners in the market. what i've done is gone back in time. this was a period where the stock was basing and it exploded in four months, essential herbally moving from 20 to 100. up about four and a half times. if you just burn that on your retina, i want to look at tesla now. same sort of circumstance where it bases and then also in a four-month period of october of last year to right now, this stock has moved from 30 to about 130. exactly four months and four and a half fold.

so both amazon and tesla, same formation, here they are. here are are those dates. that's kind of a remarkable thing. meaning when something's brand new, no one's quite sure what it is, what it's worth and where it's really going because it's breaking molds and that's what each of these stocks in a way is doing. take a look at something that's also interesting. in 1999, i have here walmart versus amazon and of course, amazon was a piker compared to walmart and in fact, the market cap was something on the order of 30 billion versus walmart at 150 or one fifth size. if you were to look at that ratio and apply it to ford and tesla right now at 16 billion is exactly one fifth the size of 20% of ford, the largest of course auto manufacturer in the united states. there's something here. one can say just coincidence, analogs are important. no one believed in that one and we know what's happened. and really, in a lot of ways, no

one believes in this one and this one's got 40% of the short that's flow. >> so, give us the bottom line here. you believe that tesla shares are in for a move, a sustained move higher as amazon shares -- >> i think you've got people trapped. the big short interest, but you have also nonbelievers as there is often with new technology. it cannot be. >> mike, what do you make of this? it is fascinating. >> let's start with the admission that i wasn't really a believer in amazon, so i'm going to start there and go i'm not completely -- that's right and i'm not completely a believer in tesla either. one of the big differences though, as much as a paradigm shift as amazon represented for the bricks and mortars stores, in this case, you're still dealing with four wheels, a steering wheel. we're dealing with a car. the only difference is really the power plan. for me, i have a hard time believing it, but that doesn't

really tell the whole story. they're enthusiastic about the stock, the cars. motor trend voted it as car of the year. consumer reports basically said the thing was perfect. >> but there are similarities, too, though. ceo -- >> it's going to be the psychology that's going to continue to propel the stock. >> the psychology is one of the most important things. when they did that deal below 100, elan bought $100 million worth of the shares at $93. these are visionaries just like -- they have some disrupted first mover technology. so on this desk, i think we've been saying don't try to step in front of this thing. there's going to be pitfalls here. >> and i think what we've also been saying instead of usining stocks to get into the stock, you might want to use an option strategy. this is the perfect example of

why you might want to use options. >> the most profitable company, big car company in the world is porsche. they make about 20% margins on their cars. you start looking at the multiples of a stock like tesla like one of the aforementioneded internet companies. that is really the issue here that you are really chasing the stock. >> give us the trade here. >> i think the same play is the one we've been talking about and a lot of other similar stocks. we did this in herbal life. take advantage of the fact the applied volatility in these near dated options is very high. what i'm looking to do is buy the september, january 1, february call spread. close to 18 bucks for the january 150 options, then sell the september ones against it for 850. very close to half the value of those longer dated options. what i'm trying to capitalize on here is the fact that that decay is really going to work in your favor. i am making it with a slightly bullish bet.

people betting against the stock are really taking some big risks. >> the story also has froth to it. i have a friend who just bought one. if i had bought the stock, i could have bought two. this is sort of the mentality going on. >> with a 40% short interest, you can't trade the stock because you're just going to get one stock. there's a difference here. mike makes the point. this is a bullish calendar versus dan's neutral calendar. this is the great example to look how you can use a calendar any way you want to. bullish, neutral or bearish. this is adult swim, so define your risk. >> got to take a break. coming up, which one of these three legends made the most money last week? the answer might surprise you. we'll unveil 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. ♪

[ 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.

dan made a bet of facebook. last week, mike used the same structure on herbalife. risk less to make more and that's what mike tried to do on herbal life. >> the company is trading cheap. i got to go with icahn. just buying the stock -- >> it is a more dangerous situation. >> hey, mike, george might be on to something. after all, 100 shares would set you back almost $6,000, so instead, mike bought the stock call for 575. now, to make money, mike needs shares to rise above that $65 strike price by more than the cost of a trade. but spepding almost six bucks just to bet or herbal life?

sold the call for $2.50 and created his calendar, but he made making money easier and here's how. between the 5.75 he spent on the longer dated call and the 250, mike kept the total cost down to $3.25. and now instead of needing shares to rise above 7.75, this trade now makes money and shares rise above 65 bucks by more than the 3.25 he cent. >> i wish i had thought of that. >> but it gets even better. that's because the near dated call will decrease faster than the longer dated call he bought, letting him do something no activist has been able to accomplish. turn time into money.

keep in mind there's a trade off and in order to make the most money, mike needs shares to stay below the strike of the shorter dated call before the first ek appreciation, but before the longer dated call he bought by more than the total cost of the trade by the second expiration or in this case, above 68.25 by november expiration. and since the time of the trade, shares have risen 12%, meaning mike has a bit of a problem because even though he's making money in that long call, he's losing money on that call he short. >> i think i have a much better record. >> and now, all of wall street is beating down mike's doors because everyone wants to know what will mike do now. >> before we answer that, let's see just how much money was made had you bought it at the time of the trade, you would have made 11%, that's not bad. but mike's call calendar can be sold today for almost 550. this is a vol time stock.

mike, how are you managing this trade? >> we got some twitter this week, right now, you're in the sweet spot. with the stock right here, that near dated option is going to be dec decaying and the news is out on it. >> this is the sweet spot. really when the math kicks in when you let that near dated option erode away. this is what you were hoping for. >> what happened to the dynamic of bill ackman? i presume he's still in the trade at this point. >> i don't think he has enough time. the only thing time is allowing for more enemies to line up against him and that's what he's doing. he's getting kind of cornered now. >> it's funny. interesting argument. to me, at some point, the guy put his thesis out there, he's risked capital, done his work and i don't remember a time where everybody is so right all the time where they get in there. there are some events that could take this thing down quickly, so

to me, it's been a one way street for now. >> but the humorous with which he made this announcement was incredible and it was like being in a pit used to be. if everybody knew what your position was, they were going to test you and bill ackman is being tested and it's not working out for him. >> and does he feel the test all right? up next, the final call from the 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. ♪ all on thinkorswim from td ameritrade. ♪

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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. for women and girls who have dreamed of being a mermaid and there are so many out there, a school in the philippines is giving you a chance. for anyone with $41, anyone can join the session. the idea started with a halloween costume and turned into a creative way to teach children to swim. the school is attracting students of all ages. awesome. time for a final call.

scott. >> it's all about trading visa. >> sam. >> i like spreads in general. >> looks like our time has expired. thanks for watching. check out our website. got a trade on disney disney th. see you next friday 5:30 p.m. eastern time. in the meantime, "mad money's" up next. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you a little money. my job is not just to entertain you but to educate you. call me, 1-800-743-cnbc. late to the party? terrible feeling. there's nothing worse than watching those dow jones averages roar higher while your portfolio sits there barely moving.