the gate to be a dovish one. >> you can go back to the emerging market, this could be people going into u.s. equities. >> guys, thank you for joining me on this friday. making it a fun one. it's been a crazy week. we want to hand it over to "fast money." what do you have going on, melissa lee? >> apple exile. we have the ceo of the bitcoin that got gotted from the apple app store. >> wow. >> a lot more. >> well, stay tuned. >> thanks. over to you guys. >> "fast money" starts right now. live from times square, i'm melissa lee. i'm our traders tonight are steve bosso and we are talking to the ceo whose app was banned from the apple store. the top story, the s&p scored the best score in the second straight day despite a disappointing jobs report this morning. is this the end of all that correction talk? guy, what is that phrase --

price is truth. >> there was such sarcasm in your voice though. >> i'm stating fact. okay. the markets went up today, strongly. does that mean that we're out of the woods? >> no. listen, i was in the camp in 1725, we didn't get there. i'm surprised we're as high as we are now. i think this time next week we'll be looking at the s&p that's either side of 1750 having tested that 1725 level. we'll see. great rally today. i'm not certain what it was on the back of other than the fact that people thought the market held where it needed on the held and they wanted to get in before the weekend. >> and is -- is bad news in the data good news for the market so do you see chair yellen start to take a skip out on next month's taper? >> no way. >> no, it's not going to happen. two things got us down here, taper and emerging markets. the market should still be weak. so for me i haven't done many much, but i have trimmed around my edges. >> but those things were kind of

sel self-fulfilling market reaction. people responded. outflows. look at what happened with 18.9 billion year to date. that's more than all of last year. when emerges markets were going through the same stuff. to me, this was about extreme positioning. today's labor report i think also, you know, i'm not pollyanna, but if you look at the manufacturing part and the construction data, jobs are being added in places where they have not and places where there is very real demand and in the services and the government, these are things that are much more volatile and will come back. so when i look at what the market is doing i don't think you have to run in monday and buy at 1800 and there's the 20 day and some resistance and you have had a great move. but i think i have been saying for the last week and a half that all of this was about extreme positioning and there's no reason nothing has changed with this data and i still maintain that. >> well, i mean, nothing has changed, i would agree with tim. but it looks like the economy sgetding weak when we -- is getting weak when we look

overseas. and when you look at just more than just the u.s. stock market, i tend to look across multiple asset classes look what you had today. you had bonds up, yields down. you had gold up, you had oil up. so depending on what -- on which market you looked at you could get a different picture of people responding to the economy. volatility down. >> but to beak's point, bad jobs number. you had gasoline along with crude up. so these are head winds for the consumer. now granted you could say it's a transitory issue with the weather. but i think this is an on going retailers are still weak. >> so you think the markets will stay weak and guy, this is a bounce to sell. brian, you're so bearish and still short the market. you're the lone if i can call it bull on this desk tonight. >> i want to remind how freaked people were on monday. one of the good things we did on the show is gave people a shopping list of things to buy.

boeing, whirlpool, that stock has rallied. you can't say that things changed on a dime overnight. and that's how this market trade, you have to be careful about this. which also means you can't run in on monday and say, oh, boy, we're at 1800. >> activist investor carl icahn so sounded on his big investments in apple. he tweeted, tim cook confirmed they'll launch new categories in new categories plural. they announced a share buy back over the past two weeks. and shares closing higher for the week. although still down for the year. let's bring in brian blair from wedge partners. thank you for being with us. >> thanks for having me. >> what do you do with this pop here? is this one to fade? >> no, i think apple will keep running. i think all this talk about new products is going to start to get investors excited about what's possible. it's a wearable, whether it's an iwatch or not, they're doing

something that we believe is fitness focused. i think as investors get excited about that, plus the larger screen iphone 6 coming, we'll see the stock continue to work from here. >> the other two things, i mean, tell me what we don't already, right? these two items the wearable, you know, the bigger screen iphone, big deal. we knew that for a long time. and tim cook said he bought $40 billion worth of stock recently. imagine if that wasn't there, what is the floor for the stock here, brian? what's the actual support? >> it looks like 500 is a place where people feel comfortable buying this thing. it's gone through there a little bit, but i feel it's 500. i do believe a lot of the commentary not only about the buy back, but the hints we are getting this going to prove that apple can continue to grow. a new product category is going to bring revenue growth. it's going to bring new opportunities for the next fuel years and it will afford this stock a new multiple. >> do you listen when carl icahn

tweets and what do you think about this? this is also dangerous noise even though carl has all the respect in the world as he deserves for what he's done in other arenas. >> yes. >> but doesn't seem to be working with apple. >> i don't pay any attention to it. at the end of the day, if he wants to get apple to increase the buy back from the $60 billion to $100 billion or whatever he's asking for, 110, he should be doing it in quiet conversations with tim cook. do it quietly over lunch because apple is not going to bend to his will and what he's suggesting in the public and the media. >> it seems they are, but that's another conversation. i have the bull case thought out. but what's the bear case? i'm sure you have formulated one. >> the bear case is that iphone growth is going to continue to decelerate. it has decelerated. so the view is because they're not trying to cater to the low end smartphone market, their growth -- the growth of units will decline. all of the growth in smartphones last year was at the low end. the other is maybe there's competition in the tablet

market. apple still owns 70% to 80% of the market. the concern is we'll see the lower cost entrants start to hurt the emerging markets. that hasn't been the case, but the big concern is iphone continues to decelerate and whatever comes next is not going to rev up revenues. >> all right. brian, going to leave it there. thanks for your time. let's get to icahn's other tweet. he tweeted today that google is now 19 times 2014 estimated operating profit. at the same multiple apple would equal $1,245 per share. so can you apply google's multiple apples to apple? >> literally -- of course you can. apple is not growing like google is either. >> it's not. >> if you look at what's going on with the profit and even the top line, we know that apple has been struggling and that obviously profit is down 11%. look, they're such different businesses right now, even though they're brawling in

certain parts of the empire. >> to put some numbers to the sales growth, apple 0.3% year over year. quite a different growth profile. >> plus you have the gem of youtube. google is to tim's point buying up companies left and right. they're going tock there. they're paid as a growth company and it's actually a value company as well. so people don't have a problem paying whatever they want for google. >> you tweeted icahn back. did he tweet you back? >> of course not. carl's -- he's probably not in long island right now. >> agitating. >> how does his time line decrease with him tweeting so much? >> i don't think they're comparable -- there's obviously -- not on the level he is trying to make him out to be. i think apple has competition on a number of fronts and google seemingly has competition on extraordinarily few. so i think google deserves it. >> you know, i think with the same logic, you would say that apple a retailer so put amazon's multiple on it and you'll get

50,000. you know, it's apple and google. >> but having said that really quick, we have waited for apple tv and we didn't get it. if they come out with a new product this stock does have the ability to rip right through. >> but given the rise of 4% for the week, what would you do with those shares? if you bought friday at the close and you have a 4% gain on apple today, what would you do? >> i would say in the trade. so i think apple has been -- >> i think you have to stay. but we talked at the beginning of the week when apple was trading well, we said it was headed to 525. >> but we know that apple has been the buyer. so the buyer is gone now. who's left? >> good point. >> we let dan nathan call the move perfectly earlier this week on "fast." take a listen. >> to me the options activity has spoken to the fact that they biering back stock. a lot of delta one trading going on. well, between -- it could speak to the fact that there are banks doing accelerated buy back for the company. >> isn't it cool that you fill

in two things on that. you fill in the negative case -- >> oh, stop. he'll have much more at 5:30 eastern time. we have the ceo of an asset that has been banned from the apple store and bitcoin fans are fours you about it. and netflix hit an all-time high today. is it too late to get in on the stock? that's next. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation.

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♪ time for the top trades. netflix hitting a new record price in today's session. and we should note netflix is up 136% and the market cap $24 billion now higher than 65% of the s&p 5 hundred. tim? >> extraordinary. valuation doesn't matter because 175 times per current and 100 times next year -- first of all, they won't be putting through the price increases. clifford the dog, brian, they signed a big deal with scholastics. >> i love clifford the dog. the big red dog. >> this is interesting, time warner broke out the hbo earnings. so there's a joust going on and

seem to be battling for the same space. if you look at valuation this is a case where we talked about this, relative value time warner with hbo 25% of the revenues is -- >> do you like time warner? >> are you looking at me? >> steve is not looking at me right now. >> are we on the air? >> we talked about time warner and the answer was yes. remember? >> yes. of course i do. just reaffirming it for people who might have missed that episode. >> so you know something? >> easy, clifford. [ crying ] >> let's move on. somebody's a little grumpy down there. i don't know who that would be. next up the gap. the stock soared over 6%. beating many of the peers. grumpy grump? >> so comps up, revenue year over year was not good, but the guidance eps was good.

$42 was the high we hit back in november. and i think the way to trade gap is hopefully you have been in it. take profits here. i think you re-engage. you get long again. if it can close above it into earnings. >> can you see the gap as a trade even though you believe the consumers will be stretched by natural gas and gasoline prices? >> no. i don't like how it traded today. i would use today as a way to short it. use today's high as your stop out on the short side. >> last up, twitter. a rough week for the stock ending down 17%. and you bought into the stock yesterday. >> i should have went with a three-day rule but i broke the rule. >> why did you decide to break the rule? >> i felt as if there was going to be real buy side coming in with the 40% short interest. down 20%. you've got to figure if you're a short you want to cover your position or recover some of it.

very -- believe it or not, as liquid as it is, it's tough to cover for the shorts so they better be scared if they're still short this day. i felt it firmed up around $50. i wound up getting a little bit longer. i look at the chart, i look at the next two weeks. i think it would be olympics, as in advertisement for twitter. can you imagine how many hash tags there's going to be on that olympic feed? how many links there's going to be. this is truly the true competition to youtube. >> here we go. hang on, let me brace yourself. >> it's your -- >> you're probably tweeting about ice pairs. do you want to talk about that? >> not unless you have a partner. >> okay. just -- you know? i love ice skating. >> split screen. >> dance team, they have been together since they were 10 years old. a great story. so your tomfoolery down there, that's a nice story there. >> no one appreciates a double

hamill camel -- >> hey, it's a family show. >> and the shortage is being blamed on cold temperatures across the u.s. and canada. and b.k., would you get back in? >> no, not yet. we are starting to come to the end of the cold season. at least we're all hoping that. despite what the groundhog said last season. now you have to wait and you either don't trade it till the summer comes. or if we get another cold snap then maybe you go back in. but there's a second derivative trade on this. that's going to be fruits and vegetables coming up. cauliflower and broccoli are going to be expensivive becausef that. >> you can feed it to the groundhog. >> it's cold, yeah. >> all right. punxsutawney phil. >> coming up next, after removing the last big bitcoin wallet, it has some bitcoin fans throwing their iphones out the window, literally.

the ceo will join us next. >> "fast money" means trading. the entire trading day is the preparation for the show that night. >> it's idea generation. all about giving you a framework on how to look at the market. as the world has changed, the show has evolved. >> i'm pete najarian. i'm "fast money." >> go to the nbc universal store and order your tee. similarity. witness the cheesesteak shuffle. ♪ cheesesteak, cheesesteak ♪ ♪ it's the cheesesteak shuffle! huh! ♪ ♪ every day, all day, cheesesteak, cheesesteak! ♪ ♪ every night, all night cheesesteak, cheesesteak! ♪ ♪ 9 a.m. cheesesteak! ♪ 2 p.m. cheesesteak! ♪ 4 a.m. cheesesteak! ♪ any time (ruh!) >>geico. fifteen minutes could save you fifteen percent or more on car insurance.

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that's right.

don't forget starting on monday, "fast money" freestyle. we'll be streaming it live and you can watch curling on tv and "fast money" on the web at the same time. let's be honest, it's everybody's dream. >> will tim be giving jump rope lessons? >> i hope not. >> still smarting from that. >> felt good to get a burn. >> time now for pops and drops. big movers of the day. popping for tesla, 4%. >> well, tesla breaks into the top four car brands in consumer reports. perception is reality. last year they were 11th. now perceived to be a lot better than right there up with the main guys. >> you're so giggly tonight. drop for soda stream, down 2%. >> had a nice bounce early. we talked about this the other night and last night on the show. i think you own it in earnings. they might report a horrible number, but the risk/reward sets up for a move significantly

higher. i think this stock is going higher from here. >> drop for loews, down 1%, beakers. >> downgraded from buy to neutral by goldman's today. we had the ceo on the increase in repair and restoration -- >> nokia, up 8%. >> i'm going to sell this after getting rewards on the patent and don't run it tomorrow. >> well, it's not all good news for apple. iphone users are revolting after the bitcoin wallet was blocked. with us is nicolas cary, the ceo of blockchain. >> good evening. >> you said it's an anti-competitive and capricious nature. anti-competitive, that seems like apple is looking to get into the payment space as well. >> yeah, that wouldn't surprise me one bit. apple has telegraphed they'll do

something on top of the hundreds of millions of credit cards they have on their system. bitcoin represents a major threat to any revenue model they may try to build. anything they do with credit cards is at no innovative. bitcoin is. it removes the fees, there are no charge backs, removes any privacy concerns. apple has a track record of anything that starts to compete with major product of theirs. they did this to google. they took out google maps and prevented g-mail from being on the apple platform. so i'm not surprised. i think in the future, apple will come around. obviously, you're seeing an enormous ry action -- reaction to this news by bitcoin enthusiastics around the world. >> what is your option at this point? >> for the time being if you want a good mobile solution, android is the way to go. there are hundreds of wallet services there and blockchain is one of them.

but the real interesting and more compelling idea is we don't need the app store. you can build beautiful wallets around i think that's what everyone will do. >> users we have this video here, users are actually smashing their iphones. what's the message you want to send apple out there? >> i think the message i'd want to send to apple, we want to cooperate with the apple requirements. i want to build beautiful, simple and secure products but what i can't comply with is the requirement of not being a bout coin wallet. it is hard to gauge when they want when they only give you a terse e-mail for saying that your app was removed for something they don't tell you about. what apple has done now is demonstrate they're in a position to be a gatekeeper on innovation. >> can you sue at this point? >> i don't think that's necessary. i think i'd rather inknow rate

is. i'd much prefer to work with tim cook and demonstrate on how they're missing out on the greatest innovation of our time. >> thank you, nicolas cary, ceo of blockchain, just blocked from the apple app store. we have to put up the news that the bitcoin prices have been plunging tonight. >> mount gox has been having problems getting withdrawals out of the exchange. on bitcoin and apple, to me this just emboldens bitcoin. apple has recognized that this is a threat to the business model. just like when jamie dimon said this is a terrible store value, he recognizes he could lose money on this. >> let's go around the horn. >> whirlpool, trade is working. >> last night we talk about gasoline going higher. by tesoro. >> yahoo! is my final trade again tonight. ali baba, more valuation comes

out the longer this has to run higher. >> remember, hain celestial, jim cramer had simon on last night. i think this is the opportunity to get back in on the long side. >> all right. that does it for us. thanks for watching. don't forget during the olympics catch our live web stream show on cnbc.com. don't go anywhere. "options action" begins after this break. ny aren't. why? because selling their funds makes them more money. which makes you wonder. isn't that a conflict? search "proprietary mutual funds". yikes!! then go to e*trade. we've got over 8,000 mutual funds and not one of them has our name on it. we're in the business of finding the right investments for you. e*trade. less for us, more for you. the fund's prospectus contains its investment objectives, risks, charges, expenses and other important information and should be read and considered carefully before investing. for a current prospectus visit www.etrade.com/mutualfunds.

this is "options action." tonight, ilovers? >> listen, i enjoyed it. i enjoy the company. >> could tim cook and carl icahn become best friends after all? why carl may get his buy back wish and what that could mean for the stock. and talk about social climbers. >> squeeze me. >> oh, no. >> no, not you ladies. wi with we're talking about 2.0 companies and which $5 stock is set to join the party. >> it's evil, don't touch it.

>> that's what investors said about small caps this week. we'll explain why it's about to get much worse. the action begins right now. live from times square, i'm melissa lee. and today, gravity was suspended on wall street. if you were a stock, you were up. the s&p closing the week higher. if you were a bond, you were up too. but gold and oil were also higher, in fact the only thing, the vix tumbling on the week. what was behind the buoyant action? let's find out. typically, gold, bonds and stocks still rally together. so mike, what gives here? >> it's interesting. in the past we have frequently talked about equities and said not too hot. not too cold, just right. i would actually argue that taking a look at the economic data everybody was looking for something they wanted and everybody got a little that they did want, basically. we have some indications basically in the number of new jobs created that suggested things aren't too hot.

we saw something in the unemployment that said it was not too cold. i'm not necessarily a complete buyer of all of that though, because i think you had a sharp sell-off. there's a little bit of covering and then maybe people got out of hand. i look at this and i'm not really as enthusiastic as everybody else. stocks are at no cheap, economic growth is not particularly buoyant. actually, the fact that the vix dropped as far as i'm concerned is good news because if you share my view, you're going to get better opportunities. >> there you go. after all the hemming and thank youing all week long, we had a volatile week. the s&p 500 closed at the exact spot where it did last friday. >> off record highs too. >> that's true. so the draw down from peak at the january 15th to the trough and we almost got there. we have a chart of the vix. look at where the vix got just on monday's sell-off. got back up to the levels where it got them down on the 7.5% sell-off last year.

so you know, we have the data here like mike talked about. the ism data on monday we deserve to be down. today we deserve to be down. we didn't go down. what tell it tell you? positioning. people were positioned short for the number and there you go you have a pop right there. >> where does that leave us right now? we have the jobs report -- we're not in a no-man's-land, but what are the catalysts here and where do you see the stocks going? >> i think that's a phenomenal point. the thing that gets markets to roll over is when you get hit with something you don't expect. the only way to get hit with something you don't expect is when something comes along that's not on the calendar. we don't have a whole lot on the calendar. my view right here, we have had an extended period where we haven't had a material correction in the markets. meaning 10% or more. we go 18 months and we see something like that we're at plus 30 at this point. i still feel like we're overdue for a little bit of that. anybody who's running and saying, okay, it's all clear -- >> i think the technical set-up

is really important here. when you look at the chart of the s&p, we went down to the previous low in october. it was down about 6% from the highs and what are we doing right now? we're testing 1800. when you look at the chart right there, the 50 day moving average, the yellow line you should see a bunch of resistance. if we open up on monday, we could see some follow through i think that's a good spot if you're looking for protection or looking to make bearish bets to get in there and this could be it. >> if you felt the pain on monday and saw the volatility spiking, now is a great opportunity to actually put on some sort of trade if you have a directional view which you do, mike. >> i think that's exactly right. the whole issue has been very often you rarely get a situation where, you know, everything sets up perfectly if you have a directional bet. obviously if we want to be using options on the long side or looking for an opportunity t premiums or options are cheap, we aren't back to where we were. >> let's look at one last point. janet yellen, she's speaking in

front of congress for first time next week. if she signals she'll stay the course with the taper that could be the thing that disrupts markets next week. we have emerging markets. they bottomed this week and they got going before we started getting going. who knows what's coming out of there. but to me i think it sets up really well. if you get a follow through next week and volatility comes down and you like you said you were sweating on monday and you wish you had foot protection -- >> what's the projection? >> i want to look out at march 31th and when the spy was 179.50 you can buy a put spread and the one march 31st, 175, 165 put spread cost about $1.50. again, i want to do this when volatility is lower and when stock is higher. i was only risking $1.50 for $10 wide protection. that gives me protection down to $1.65. that's a really important

technical support level. i think that's the sort of protection that will act very well if we're down 5% to 10%. >> the math on the spread works out very nicely. usually we're looking for 25%. well less than that. i think this sets up very nicely. the one thing i would say, options really come in a whole lot more, you might be able to buy it and like it. >> that's the great point. if implied volatility goes the way we think it will go, you want to leg it. i want to do this for instructive purposes. we are looking at the levels. that's why we have our main man carter and we want to sell options where we think there's support to break even. >> and want to short the spy, that carries unlimited risk. moving on here, call them the social climbers, despite the trouble at twitter, they hit all-time highs. facebook is three times more valuable nan time warner and

yelp hitting higher today. and according to the charts there's one laggard that could join the party. let's call to the charts with the original chart master himself. what are you looking at? >> zynga. importantly, of course, we have a lot of movement in the last two or three years. these are all stocks that have ipo'd in late '11, '12 and of course you can see these are incredible results. one after another. zillow, facebook. since their ipo except down here on the bottom. zynga. this is quite atrocious. now, it looks to us as though zynga is about to come to life in a big way. we think that's the opportunity. take a look. here's the one year chart and whaetion important is -- and what's important is how well it has responded to the trend line and this huge bounce off this trend line here with this gap. now, i want to say something. this was 170 million shares that

day. average daily volume is down here at like 20 million. so a massive reset with a gap. it stops right at the pass top so pay attention to the 450 level. look at the next chart. we are literally -- this is one of the most gorgeous, bearish to bullish reversals i think i have ever seen. it's a textbook bottoming out formation and if you look at the authority of this 450 level the presumption is a big move to the upside and the foreshadowing of that is the 170 million share day that got us here. >> hey, carter, do you have a chart of the revenue decline year over year? this is one of the thing, yes, that looks gorgeous, looks washed out. i mean, it was a travesty what happened. but two years ago they had $1.2 billion of revenue. last year they had $840 million. >> we want to get to the fundamentals. it's the most gorgeous, bearish to bullish reverse. make the case, they have a lot of other problems here. >> the interesting thing is i'm not going to make the case

because this company hasn't made any money. you know, it's interesting, there are situations when sometimes you can use options to make directional bets when the fundamentals don't back up the story when you have a fairly interesting technical case. which i think is what carter is presenting. so everything that dan just said was true. this company hasn't made any money and it's interesting to me because it seems like they should. you know, you take a look at it and say, okay, if they could do over $1 billion nin revenues bu year on year they've proven they can't. so i won't pretend next year is a panacea or magic bullet. >> so the sole reason you're getting into the trade which is a bullish trade is because of carter's chart analysis? >> a combination of his chart analysis and something i observed in the options market which i thought was pretty interesting to a specific trade structure. >> so mike is bullish. he is using a call fly so got to open the playbook.

that's a bullish strategy where you buy one call and sell two higher strike calls against it. but to protect yourself you buy one even higher strike call. sounds a little tricky here, but here's the bottom line, you want the stock to go to the two strikes where you're short. that's the target for the stock. so mike, walk us through your trade. >> so the interesting thing here is i was looking at april 4.5, 5, $6 call fly. you'll notice it's only half a dollar. so why is this interesting? i could pay a quarter for that. normally what happens when you buy a call fly you're targeting that short stripe, but in this instance if you pay about 25 cents for this which is where it was trading today the maximum profits are at $5.50. but you still make profits no matter how high it goes. you can actually capture 20 cents if this thing goes to the moon. this is unusual in the stock that has a volatility level this high where you can risk 5% of the current share price to make a bullish bet that's going to allow you to participate and if it falls back to 3.50 bucks it

deserves to go there. >> you know what's funny i don't like this trade at all. i'm going to tell you why. i think at $4.50, they have new management there, this company wants to be bought by microsoft. so to me, i think you give up all that potential asymmetric risk for this thing to double or something like that. you can put that on a ton of options in the fly and could lose money if the stock goes up a dollar, a dollar and a half or something. >> if it doubles you'll make about 80% profit on the 25 cents you put in. if it goes to $5.50 which is a 20% increase from where it is right now you'll crush it. >> so let me ask you this. you were totall totally down on trade. you respect carter, but you wouldn't put the trade on it yourself. why not? >> no. for the loyal viewers here, they may remember last year, we did a trade in zynga, a bullish trade.

we did a risk reversal and which sold it down side put. you know why? because they have half the market cap in cash. back then they almost had all of it in cash. there's a floor for this stock. i just don't think right now you have to try to thread the needle. >> the beauty of it it was a $3 stock and the thing is up 50% since then. >> nice trade. >> it was a phenomenal trade. >> you have a question out there, we'll answer it in the 101 web extra. in addition to that, you'll find educational material and exclusive trades so you want to check it out. here's what's coming up next. we have carter and mike join leo's entourage. and they've got a wake to make money. plus -- >> make love not war. >> that's what tim cook and carl icahn might do at apple's shareholder's meeting. we'll tell you how you can profit when "options action" returns.

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get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. to me, you know, the options activity has spoken to the fact that the company is whying back stock because a lot of delta one trading going on. options -- well, between it could speak to the fact that there's some banks out there doing accelerated buy back for the company. >> there's our own dan nathan, predicting that apple is buying back stock. however, it was not enough for carl icahn who took to twitter, surprise, surprise to say this. google at same multiple is worth $1,245 per share. ridiculous. keep buying, tim. you still have $145 billion cash. well, carl, today might be your

lucky day because that's what apple could do. dan and mike to explain why at the plasma. >> well, the activity in the options market was the tell that something was going on. there were large blocks that were trading, it was similar to activity we saw when the company did accelerated buy backs in the past. they introduced the initial buy back of $10 billion worth of shares back in 2012. okay. that was in march. then they added to pressure buy a lot of activists or investors in general, they added last year another $50 billion to that buy back. so what's going on right here? they bought $16 billion worth of shares. that probably brings you between $40 billion of the $60 billion. maybe even higher. by the time they have the february 28th shareholder meeting this is where mr. icaan who owns $4 billion worth of stock is pushing the company as a proxy in place for that investor to vote on, for them to buy up to or excuse me

$50 billion or more worth of shares. what's going on here? you know, they may achieve the same goal. the company does not want investors to vote for mr. icahn's plan. obviously mr. icahn does. but you know what, apple may be full up in the next month or so. they may need to do their own massive buy back again and you know what? both sides may win on this trade. >> yeah. i think this is really interesting. first of all, carl's right. a situation like this is absolutely absurd. carrying that much cash. they obviously have floated a small amount of debt on a relative basis. rates being where they are, they should be expanding it. one of the things that people might look to do, take advantage of the situation and just look to sell some puts on this. because effectively buy backs are the put to you. when you're selling a put you'll get support from buy back and from the hopes there might be one. so simply what i was looking agent today was telling the puts, you can get $25 for that. so you're capturing the stock

price. the worst is you're compelled to purchase it and they're buying prices higher than that. i think that's a comfortable place to get in. also, if they're not buying back right now, that's probably one of the reasons why volatility in the stock is going to be suppressed. that's why we'll do this instead of running -- >> that's an important point that the buy back of this size is -- it means over time the price of options should come down. you want to net short the options. at some point they're attractive, but if you're long stock you can sell calls against your stock and take in some added deal there. >> a great point. one of the things you're looking at, if you don't own the stock that's when you sell the put. >> i want to bring carter in in terms of your view on the stock, before apple's earnings you were bullish on the stock and apple tanked on the earnings. >> what's interesting is where it tachbinged and -- it touched

on the average, and we think the bounce continues. we like it a lot. >> carter likes apple still. coming up next small caps had the worst three-week stretch since june of 2012. why it could get much worse. what's your favorite sport? >> curling. >> hockey. >> ice skating. >> what about curling? it is mine. >> quit sucking up to the host, it's "options action" on the web. all through the games, watch "options action" on line and on demand. go to options action.cnbc.com. or follow us on twitter. "options action" is going for the gold. that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan,

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faster than the iwm drops. meaning more money in mike's pocket. >> i'm talking about this. >> and since the time of the trade, it's fallen 5%, making this trade a winner. while some on wall street are celebrating his success -- >> the whole firm is going nuts. let me open up the door to my office. [ yelling ] >> others are left unsatisfied.

>> i bumped those numbers up. those are rookie numbers. >> forcing us to ask the street's biggest question. how could mike make more cash? >> now, before we answer that, let's explain why buying that was better than shorting small caps. if you went short you would have made 3%. nothing to complain about. but mike's put can be sold back today for $5.50. 25% return. now, carter got us into the trade. what does he see now for small caps, carter? >> i think there's more damage coming, you have a well defined trend and the high was 117. we broke the well defined trend, and now we have thrown back to 110. the high level sell of 7 or 8%. we think this throw back gives you a chance to reshort the thing. >> how do you manage a traded? >> >> i would roll down to the 108. and try to do what we were talking about when we put this trade on initially.

look for opportunities to spread. keep an eye on twitter too because we will talk about opportunistic times to do that. >> to carter's point, that trend line they broke, that's a nasty looking chat there, i think you look to short charts like that. >> coming up next, we have the final call from the option pits. >> "options action" is sponsored by -- [ 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. ♪ i take prilosec otc each morning for my frequent heartburn.

because you can't beat zero heartburn. woo hoo! [ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. one pill each morning. 24 hours. zero heartburn.

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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. now, what you're watching now is incredible footage of our very own mike khouw trying out for a brand new olympic sport. freestyle sitting. sad did he didn't make it to sochi so you can find him and the rest of the gang breaking it down in exclusive online segments over the next two weeks. find us on twitter where our handle is @cnbc options. mike going for the gold. all right. time now for the final call. >> take advantage of the two or

three bounce in equities to reduce your exposure. >> i agree. wait for the price of options to come in, look at the spy, look to spread into the trades. >> mike? >> consensus. i agree with 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 try 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 but to coach and teach you. so call me at 1-800-743-cnbc. sometimes, not very often, sometimes, the market has something for everyone! ♪ hallelujah >> today we got four g f