now, you stay safe. bye-bye. . this is "options action." tonight -- >> oh, my god. becky, look at -- >> the price of amazon stock. now over 400 and counting but if you missed the rally relax because we'll tell you how you can still profit from amazon's amazing run. >> is tesla too hot. >> lord jesus it's a fire. >> tesla shares are feeling the heat and reports of another fire. is the stock about to go up in smoke? and talk about a crude shock. >> no. i am your father. >> quietly oil has hit 100

bucks. we'll tell you how you can cash in on the move. the "action" starts right now. >> live from the nasdaq market site in new york's time square i'm melissa lee. we start tonight with america's favorite tech stock and that is apple. pen to the 55 level but on a week that saw new record highs apple was a laggard with the holiday season here could this be the ultimate gift for your portfolio? let's find out right now and get to our resident tech guru. >> really? >> that would be dan. all relative. >> i was going to say that so quizzically. >> sorry. >> that could just mean we're -- >> right. you said america's favorite tech stock and i would say it was in 2011 or 2012. >> perhaps one of the most hated. >> this stock is up 3% on the year but up 40% from the lows. when you look at that chart, traders i'm talking to see that as an epic double bottom that happened in the spring and

summer and this massive rally. it's stalled out here almost unchanged on the year. we saw this move a couple weeks ago where the stock went parabolic, straight up, $50 billion in market cap in a matter of weeks and i think that had to do with china mobile. december 18th when they rolled out their 4g that iphone was going to be sold there. it wasn't and the stock has consolidated here. i think it could be setting up, these guys have opinions on that too, but -- >> what's the next catalyst here? we would need to get the quarter results and see the holiday sales were good? >> in the absence of the story on china we have to be focused on holiday sales. they still sell the best products out there. there hasn't been anything new on the horizon. but hasn't been a lot of saturation out there on ipads and iphones. we're holding our breath right now. we think that china could be a very bullish event. it's not going to happen right now. >> domestically the only big thing that can happen is the new ipad sell really well for the

holidays. almost every stock you look at is near all-time highs. apple not so much, well below 705, even below the 571 52-week high. looks from that 57 1 level it's rolled over a bunch. interestingly apple did try to pen that 550 strike. that just happens. on expiration day the stocks get sucked to these big round strike prices. it's not something to worry about. if you're short those options it's fantastic. it's what you've been waiting for. >> i want to get back to you, dan. you're bullish and we're going to get to dan's trade in a second. your trade doesn't play for the earnings. >> here's the thing. the stock is basically unchanged. it's one of the few stocks, one of the few mega caps stocks underperforming in a market up 30% at all-time highs. i think this stock will participate. i think with the china mobile thing where there is smoke there is fire. there are no new products here. there may be a surprise. i don't believe. i think at iwatch or wearable

computing poses a risk for apple next year. this is a company expected to return to earnings growth, 10% a year, but sales growth is only going to be mid single digits again. it's not that cheap of a stock despite the balance sheet and everything like that. i think it's a great company with great products and well positioned. near term is what i want to look at. >> let's get to the trade here. dan is selling a put spread. we use this strategy a lot before. it's a bullish strategy where you sell one and buy a lower strike put at the same expiration to yrg yourself. should the stock fall you'll see losses but they're capped at the strike of the put you bought. dan. >> i want to use really short data here, january 3rd, a reason for that. 2.5 days of trading days that are not going to exist, holidays here. and that's good if you're short options. what i want to do is lean on this 550 level scott just said that the stock he pinned to on

this expiration. jan 3rd expiration. i sold the january 3rd 540 put spread for $4. my max risk is the $6, difference between the credit i received so between 546 and 540, i can lose up to $6. my max loss is $6 below 540, make up to 4, between 546 and 550 and if the stock stays here or higher above 550 during a holiday i'm going to collect that $4. it's not amazingly bullish trade but it's an options trade setting up well. >> what this is, the bullish culture trade basically what it is. the trade that's going to pay you to lean in a bullish direction without a really profound catalyst to get the stock to go up to previous highs. i think it makes a lot of sense. one of the things that's interesting here, you're getting a good percentage of the distance between the stripes but also tight. 10 bucks at apple is not a big move. >> you need the stock to go up or sideways, the way it works.

interestingly, dana is selling an at the money slightly in the money put and when we do that it's because we're willing to buy the stock at a discount. that's not the case. you don't want to let this be a sign end up owning the stock. that's not what dan is trying to do, not his thesis. that buy 50 strike is in the money at expiration get out of this trade. >> all right. stocks aren't the only thing getting a boost from today's gdp report. oil hitting a two month high as it nears $100 a barrel. dominic chu with more on this. >> melissa, as if they needed a boost, the great u.s. gdp numbers this morning are putting a bid back to the market for the sectors. oil now the world's biggest economy expanded at a 4.1% annual rate. one place you will see the impact is in the energy markets. west texas intermediate and brent oil prices rose today. that helped some of the big names in oil field services. among the best performers in the s&p 500 energy sector, halliburton, baker hughs,

slumber around by a percent or more. take a look at those stocks on the heels of the gdp report. back over to you. >> will oil service stocks catch up to the broader markets. let's call to the charts with carter braxton moore of oppenheimer. >> the setup crude was weak from the end of the summer at 112 down to 92. crude has recovered back to 100 and yet some of these oil service stocks are still down and we think they are to be played here on the long side for bounces. to give you the backdrop, this is the oih which is the etf which captures them and so forth and here i have it over a two-year period with the entire energy sector as managed by the xle. as you can see the correlation is virtually 100%. this is where the opportunity is now. here are those same two instruments taking a little bit of a longer trend. what's important is that energy as you see here the sector has made it back to all-time highs. we know in the past week exxon

itself has been able it to exceed its 2007 high whereas drillers are nowhere near their high. as a group, up 60% versus basically 180. so one third and that's the opportunity. let's look at the charts of the oih itself. a perfect response to a trend line, over and over and over, and every time you respond you bounce, you bounce, you bounce and we would play for a bounce right here. where to a close at 47.55, we think we're going to go to 55 which is right backs to these tops of 2010. this is what we would play for. closed at 47.55. nice move. >> those are interesting charts. what's your take? >> the two biggest components in the oih represent over 30% of that index trading at a discount to the broad market however they are trading at or above their own historical multiples. i think what you want to do is take advantage what options are

going to give you and allow you to take a relatively low risk bullish bet. looking out to april and the 48, 52 call spread, pay 175 fort 48s, sell those against the 50 cents, 1.25 or one quarter of the distance between the strikes, i think basically a decent way to make a bullish bet. >> you like the stock trade? >> i do. i think this makes all the sense in the world for disciplined option traders. people talk about using options to get a looking good billy ray feeling good lewis sort of trade. that's not the case here. >> nice. >> all you're trying to do here is make an intelligent bet that's going to pay off and be profitable more often than not. this makes a lot of sense for disciplined traders. carter points out his target is 55 bucks and that's why mike is willing to sell an upside. >> i love the entry here. i wouldn't sell that upside call. i think you have a cheap option in the call and i think 10% off its highs, the recent highs, i would get long and look for ways to maybe finance by selling

shorter data ones. >> that's a good point. we look for opportunities to spread. you do that all the time and that's something you can consider here. >> let's bottom line this. stocks versus options. buying 100 shares of the oil services etf will set you back almost $5,000. mike's call spread can double mi his money and cost $125. send us a tweet we'll answer it in our 101 web extra. scott is looking at small caps. great trader blogs and educational materials. check it out. here's what's coming up next. >> under fire. no, not that guy. we're talking about tesla shares which continue to get torched by reports of random fires. quick to sell off be a buying opportunity and it's the world's greatest non-profit. amazon. despite not making a dime, the company is worth over $180 billion. >> that's incredible. >> it is. why that may not be good for the stock when "options action" returns. [ 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. ♪

♪ [ 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. time for the greatest segment of all time. time for i want more cash. a look back on winning trades and how to make more. dan made a bearish bet on tesla shares. the stock has fallen about 5% but dan has made much more and

here's how. >> on "options action" sometimes risking less to make more isn't enough. sometimes you want more cash and that's the case with dan's bearish trade on tesla. dan thought it was time to hit the brakes on at maker. >> i just wanted to make a short-term bearish bet. >> shorting the stock let's do math here. tesla stock was worth around $150 a share. so in the unlikely event goes to zero, the most money you can make is 150. you can lose an infinite amount of money if stocks can go up forever. >> forever ever. >> forever. to define his risk dan bought the december 27 weekly 150 strike put for $5.50. now dan has a right to sell the stock at that strike price or $150 by december 27th. but in order to make money, dan needs tesla shares to fall below the $150 level by more than the 5.50 he spent on the trade or below 144.50 by december 27th.

that's the most he can lose on the trade. but, it gets even better. >> many times -- >> yes. because if tesla shares fall the put will increase in value faster than the stock will lose value meaning more money in dan's pocket. tesla shares have fallen more than 5% making this trade a winner. now "option action" traders want to know one thing, how can dan make even more cash. >> before we answer that let's see just how much money was made. had you shorted tesla stock at time of the trade you would have made about 5%. dan's put cost 5.50, can be sold for over, return of more than 35%. now anyone who's followed our twitter feeds would know he closed out half of his winning position this week. how can he make more cash on the trade here? remember name of the game here is i want more cash. >> yes.

>> how do we do that. >> who doesn't want more cash. >> this was short-term trade and i was looking to make a play at the 140 level. it got there. i doubled my money. now i don't have a whole heck of a lot of risk. if i want more cash sell a lower strike put or i'm waiting, keep this on a short leash, on monday if this stock does not break that purple line right there is what you would be targeting for a big move, but if you can break 140 i think you will get more cash. if not the options will start to erode -- >> what is that purple line? that was a big support line and the orange one 200 day moving average where it bounced off a few weeks ago. >> i want to go to the expert. carter, what do you see in the charts of tesla. >> i think the operative thing here is the sell-off, big sell-off from 195 to 120, 40% down, is that what is important or the move that preceded it. 20 to almost 200. the sell-off was normal. we think this rebound and pullback is normal. but the primary thrust is

higher. >> primary thrust is higher. >> one thing, i don't like this idea that you don't have any risk just because you captured as much money as you spent. your risk is what those options were worth on the close today. i think dan is right to say he's looking to spread out. short term, he wants to spread out of it. it's not like you don't have risk. you own the options and they're worth something into this is proof that sometimes options that appear expensive deserve to be because tesla moves around and that was demonstrated. it was worth every nickel. >> would you rather long or short tesla at this point? >> at this point a really big short interest in the stock and i think that actually creates the potential for some support here. everybody knows what i feel about it on evaluation basis. i would have a hard time making a bearish bet at this point. >> thought the amazon drones were a joke? shorting the stock has been made mockery of portfolios. we'll tell you why it could be time to get out of the largest on-line retailer when "options action" comes right back.

♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade.

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♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. welcome back to "options action." in honor of the last few shopping days of the season before christmas next week, we

wanted to look at amazon stock. the world's largest internet retailer, the shares of that company have hit another record high in trading. they crossed the $400 mark for the first time ever and that makes amazon worth about $185 billion as a company. for comparison sake check out department store giant macy's worth around $19 billion. then there's target, which clocks in at a hefty $40 billion, but, of course, nobody is as big as walmart with a market cap of over $250 billion. amazon still has a ways to go before getting to that king of the retail hill. back to you. >> thanks, dom. as you know, amazon is, in fact, the hardest stock in the world to short but mike and dan are in the bears hair with the reason why now could be the time to do that. i'm interested because everybody shorted amazon got their faces ripped off. >> forever. >> yeah. >> i means listen, it's been an impossible short and in a market that actually as some people think with the s&p up 30% is acting rationally given the

investment backdrop amazon has acted pretty irrationally, think about some of the fundamental stuff mike is going to talk about. the stock up 30% in this quarter alone. let's take a look at the charts here and i'm going to put my carter hat right here. a two-year chart. when you look at this uptrend this is a beautiful uptrend here. you think some pretty great things are going on here. you look at this move here. this thing has gone parabolic, the move i'm talking about, making new all-time highs. this is the sort of thing as a trader you start to get your antennas up a little bit. and then let's just look at this right here. the one-year chart. you know, it's been really systemic here. it's consolidated and then busts up. okay. consolidates and busts up. here we are at all-time highs today. closed on the dead all-time highs. do you buy this thing? you would have to be crazy to buy it but it's been, you know, a widow maker on the short side. mike is going to talk about

fundamental reasons at some point something has to give. >> it's interesting here because, of course, what most people are going to point to is, you know, how expensive is the stock on a price to earnings basic, for example. you know, you can't do that with amazon because they haven't had that much in terms of earnings. that's not what people have been betting on. another way to look at this, on a sales basis, thinking some day the margin will show up and what you will see if you look at a longer term chart, right near that high in terms of multiples of almost 2.7 times sales. so when we think about it, if this is our metric for fundamental analysis that's the first thing. this is demonstrated since inception, now the thing is going to make maybe 2.60 a share for a $4 stock that's not a whole lot. that is what sales have been doing. basically going up 45 degree angle and i expect that to continue and if that's what people will trade on that's why you can't short the stock. so i think what you have to do is, if this is the time what we want to do is put on a bearish

bet that pays us to wait. what i'm going to look at doing is buying in july 375 put, $26 for that and then sell near dated put against it, the january 375, collect 365. what's going on the shorter data put is decaying as quickly as this longer data one. what you're going to do when that expires is probably go out and sell another one. >> so there are a lot of charts, lot of lines being drawn on charts. dan says he's putting on the carter hat. what do you say about the analysis? >> here's one thing to be mindful of. when you are an established trend and start to take out the top end usually it is a fairly mature thing before it actually ends. just to put this in context, amazon is up 60% on the year. you have things like yahoo! up 100, things like micron up 200. that part that's just above the trend that dan has drawn there, it's fairly young still. so we can actually i would say go a little more.

>> go more. scott, what do you say? >> i think the only problem with this is if amazon keeps rallying and it never has stepped back the july put he's long is going to get killed, i mean crushed and not a lot to come out of the january put. i understand what mike is trying to do. finance a bearish position an once the january put expires, keep selling some shorter data puts, a super calendar. the problem with this, there's no reason to have a position just because you think it's going to come back. it's okay to not have a position. it doesn't mean you don't have an opinion. >> i just want to add one point. we're kind of bizarre territory and some of us lived through the tech bubble bursting 13 years ago. think about a week or month when we saw drones or all this stuff that amazon is delivering stuff it gets a little frothy. >> $26 is a lot for that put -- >> the drones will be delivering the bitcoins. >> an 3d printers.

up next the final call from the options pit. [ 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. ♪

♪ [ 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. ♪ ♪ want to know what we all do on christmas? well you're looking at it. that's right. it's a special christmas from the options action gang. this is, in fact, the last show before christmas so we wanted to wish everyone a happy and healthy holiday season. disturbing. >> it is. >> all right. final call now. last word from the options pits. >> that is wrong on many levels. what to do when stocks are high and [ inaudible ] are low. >> dan? >> apple will have the days off for the holiday. lean on that buy 50 level. i like short put spreads. >> mike? >> i think apple is one of the places where that sets up well but to skopts's point a couple places where options look cheap to me. stocks are so high --

♪ >> our time has expired. i'm melissa lee. check out our website and daily segment inside fast every day at 5:40. see you next friday. "mad money" starts right now. >> announcer: the following paid program for the shark sonic duo is brought to you by euro-pro. [whirring rapidly...] >> both imitate: zzt zzt zzt... [whirring...] >> zzt zzt zzt... [whirring...] >> i have never seen anything like it! >> oh, my gosh, i love the shark sonic duo! the carpet's like new again! >> my kitchen floors are cleaner than they've ever been. [whirring...] >> it's the best cleaning system i've ever used in my home. zzt zzt zzt... [laughs] >> announcer: bright, beautiful carpets, rugs and floors make your home look amazing. but no matter how much you vacuum or mop, you get frustrated becau o