tv Fast Money CNBC March 21, 2014 5:00pm-6:01pm EDT
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oligogarchs. that's going to be big. >> housing, too, next week, we'll see if it's up or down. >> thank you all. have a great weekend. "fast money" begins momentarily. melissa. >> we got the ceo of biogene. >> over to you guys. "fast money" starts right now. i'm melissa lee. take a look at the nasdaq, getting hit today. stocks are coming back to earth. biotech, 3-d solar all under pressure. guy, do you make of the pressure? >> you know, i killed goldman sachs a couple of weeks ago when they downgraded, in retrospect,
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they got timing off a week or so, i'm not sure, some individual stories that are obviously taking center stage, but the weakness in celgene is something that you have to look into. it really hasn't bounced. i don't think the story has broken. i think it's intact. you got to look at it again next week. but i have been wrong for a couple of weeks in terms of performance. >> it was kind of interesting, right, because we have seen this rotation since janet yellen talking about six months or so, we have seen everybody rotating into the cycpsyc cyclicals. it's just a rotation out of the high flyers, into names of cisco. >> how much of the high flyer, how much does it rely on low
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rates to push into r and d, too. all of these two gentlemen said -- >> why was it never an issue before? we saw this massive flow into biotechs. >> same thing you see in utilities. there could be 90 reasons they're going to sell the stock, when it starts to fall, people dive on it with higher rates. they use it as an excuse to sell. lot of moves today were exacerbated. >> what's really interested in the last week or two, it's big cap everything that has been moving to the upside. look at dere, caterpillar. then in the financials, everybody's focusing on the fact that they sold off, they hit 52-week highs in many cases. lot of people taking off
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profits. one thing that we talked about last night is taking off some of the profits into the rise, repositioning yourself -- >> which is what you did. >> yes. doesn't mean i'm going to make money today. i clearly didn't on the bank of america position. >> going back to biotech. i would be willing to bet, it's more of the etf driving the individual names. >> you know what, when you look at the financials, everybody was looking at that march 20th date for the stress test, everybody knows that other date is coming up for payout ratios. people trade these as one entity and think they it's a sell the news event. the payout ratios -- >> you're buying more bank of america? >> i want to because i didn't
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get a big enough selloff. right now, i would be stupid. it's pretty much, it's not a big enough discount for me. it's 17.56. if i can get a real selloff, that's viable. >> goldman sachs is one of the names that i added to today. i wanted to see a pullback. got a little bit of a pullback. >> some of the interesting moves in today's session, twitter. >> twitter held key levels today. twitter bounced 49.5. then fire eye, it was a pretty good day. 2.50. >> netflix shares falling today after writing that large internet service providers should not quote be able to
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extract tolls. we should note that comcast is the parent company of this network. >> michael, great to have you with us. it's seems like a real change in tone from reed, when he agreed to the comcast deal last month, maybe because he would get placement on the set-top boxes, what i thought about today when i read this blog, perhaps he's losing on either that front or perhaps other internet service providers are also squeezing him for even more tolls. what is your take? >> i'm certain that every internet service provider is going to charge because they can. i think the isps view the networks the way, you know, crude pipelines view their transportation as a valuable asset, it's capital intensive and i think they believe they should be able to charge people to put things through their pipeline. and net neutrality kept them
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from doing so, once the d.c. sir it is court of appeals said it's been illegal, they have done so. comcast was the first to act. they were very, very cautious because they don't want to screw up the time warner acquisition, if anything that were more charitable than verizon was. i think verizon is going to take as much as they can from netflix. so, if reed is crying right now, he's going to be bawling like a baby when they tell him. >> netflix is going up against something very big, they lost something out of this, to, you know, to completely redefine what net neutrality is at this point. >> netflix is really great distribute of other people's content and they have the technology to deliver it to the consumer and they've got people on either side of their business
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squeezing them, they've got the content owners wanting more money and they have the internet service providers who want more money and they have no leverage against these guys. so, reed can complain on his blog, those two parties are going to continue to squeeze netflix for more and more money. ultimately the price of netflix service will have to go up and ultimately that will cause subscriber growth to slow and the share price is probably going to reflect that when it starts to slow. it's not going to happen yet. i think most of my competitors are apoll gists for anything bad that happens to netflix. this first happened, they spun it as good. you're going to get a heavy reaction in the next several months. >> heavy reaction, 2013, magical year from netflix. 100 from the beginning of the year, 400 to the end of the year, this year hasn't been as
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great, is this the worm turning? april 1 gs, to your point, it probably doesn't manifest itself in this quarter, has it officially turngd? >> there are a couple of shoes to drop, no, again, the apologists, they're going to continue to grow. reed is not going to say i'm worried about the ipo. they'll do the right thing by consumers. no, they won't. they're a public. it's going to turn when amazon decides to spin off prime video and charge half as much as netflix charges. that is coming. amazon raised the price on prime. $50 of that 100 that you're paying is for prime instant video. they're going to look at the
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low-end customer. >> all right, michael, thank you for your time. >> my pleasure. pete, based on this news today, based on reed hastings' blog, would you more inclined to be long? >> i would be short right now. i'm a guy who's been a bull. absolutely one of the areas has been the international growth which i think is still untapped for them. this does change things. to the point of mike, if they have to raise these prices that will impact how many subscribers have. next up, tesla, new york looking to become one of the states to implement the ban next. >> this is not a company that has had the dealer model before. this is a company that's just
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getting out, selling their cars, pretty much people are getting it online, people are doing what dealers want them to do, buy online. that's what tesla does. i do think that you have to think of it in a much different ways. tesla battery company, a tech company. i don't think this is over for tesla. >> how low, b.k. wants to know? >> the check point that we both agreed on was 225. i think you wait until it levels off because there's lack of clarity. >> there's definite ly other stories here with this name. i think 225 holds. next up, tiffany and company
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reporting weaker than expected earnings. pete? >> when i looked at this, they did come in beneath the full-year expectations. but i look at this name with the same-store sales, revenues are up 5%. they were strong across every market sector. i think the sale today is unjustified. silicon valley meets what on the some of the biggest names in technology at the white house. that's next. bulldog: look at that!
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melissa. >> one letter that was sent by a democratic or a bunch of democratic congressmen to a competitor about the high costs of drugs. i'm just wondering if you think there's any validity to this letter in terms of the high pricing of these new drugs that are coming to market because a point was made that sometimes the costs are too high for many patients, those with public insurance as well as private insurance. >> let me say, i have had a lot of respect for gilead for a lot of years. they have made the drugs available around the world to people in all countries around the world at prices that i think are quite responsible. i think it has acted responsibly in the past. i don't know all of the details about their new drug that was the subject of that letter, i think it's important to remember that it represents a cure for hepatitis c. 90% of the patients were cured. those patients aren't going to
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go on the have liver cancer or cirrhosis. the industry is about innovation and bringing great new drugs to patients who are in dire of those drugs and that's what we're trying to do at biogen idec. >> today you want canadian approval for your drug. recently, a wall street firm out there upgraded your stock, it was a longtime bear on your company, you managed them to get to the buy side. the hemophilia aids drug. $7 billion for both drugs. how do you think about this market potential for you? >> well, look, let me take a step back, most of our revenues
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come from treatment of multiple sclerosis. we introduced our first oral drug for multiple sclerosis last year. we hope to have three more drugs approved this year. so, we have a good existing base and an interesting set of new drugs and potential new drugs coming forward. hemophilia is an interesting market and an important market, it's a genetic disease, people are born with it. it's a clotting disease. they have to treat it with very frequent with intravennous treatments. we believe the advantage of our drugs is that they last longer and can potentially increase the time between infusions and
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therefore reduce the treatment burdens on patients. i think they should offer an interesting new treatment option for patients. $7 billion market that you mentioned is the market for hemophilia. >> okay, some say it's going to be a blockbuster, easily reach a $1 billion for you? >> i'm not going to speculate on the volume of sales, i can tell you, it's a $7 billion market and we think we'll get our share of it. >> when was the full rollout for that drug? >> we're selling it in germany and norway, we'll roll it across the rest of europe as soon as we finish negotiating with each country. in europe before you can start selling a drug, you have to reach a price agreement with the government in that country, we're in that process, it
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generally takes 16 months to 18 months. we'll roll that out across the rest of europe. >> george, thank you so much for joining us. interesting. you know, you observed the action. celgene had a drug approved. >> to his point, their pipeline is great. they have a joint venture that we didn't even mention. but biogen idec, it's not that expensive a company. cle clearly, there is something going on. >> would you be inclined that you're mr. momentum -- >> now, if anything in the biotech i would be looking at
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because i don't have that expertise that guy has. >> i love the pipeline, i think this pipeline -- i think when you look at the biotech world, you have to look at the each individual name. with et if you got so many of these different companies, i like to focus on biogene. you mentioned some of the drugs and potential sales. there are drugs in that pop line that are blockbuster potential drugs. when you look at the -- to guy's point, something in the low 20s that's awfully cheap. coming up next -- grasso has his beer goggles as he reveals the stocks that are going to break out for the summer.
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welcome welcome back to "fast money." i'm john harwood at the white house. where internet ceos have been meeting with president obama for the last hour or so. we expect to see mark zuckerberg and reed hastings. they have political problems with the nsa surveillance programs. it's embarassing for these companies because it looks like they're cooperating with big brother. the review is supposed to come to an end in a week or so, then we'll see whether or not legislation is required but still waiting for the outcome of this meeting. white house officials tell me, melissa, not to expect any break through in this process. the second day of spring.
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yesterday, we had the first day of spring. grasso loves spring break. he wanted to play -- >> all right. tell me something that i don't know. we know the negative is about cruise lines. . the positives are, historically, april is a great month for the cruise lines. i bought ccl. what else is historically good for -- >> why? >> because people are so i can and tired of the winter. it feels like it's been so long and so cold, selling that stock. you should guys shorting that and buying those vacation stocks. >> yes. >> i'm not going to buy carnival
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cruise line nor go on one of their cruises. >> i know it's hard sell. >> it's actually cost effective. the other side of that is las vegas. you get the cruise -- >> it's counterintuitive. you cruise up the main strip in vegas. >> come on. i get seasick looking at the boat. i'm just sayin'. >> despite all of this sickness and disease -- >> you know what, unusual activity, this is something that you might want to have on spring break. >> the coca-cola maybe looked like it started to bottom, we saw the april 4th expiring options where they're buying the 39.5 calls. very early in the morning, 5,000 trade. it's going to go higher.
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>> final trade time. >> coca-cola time. >> carnival cruise line. >> i'm going to go with natural gas here. >> nice. >> because grasso. >> anti-grasso trade. >> monsanto. >> all right, that does it for us. thanks so much for watching. see you back at monday on 5:00 p.m. don't go anywhere, "options action" is next after the break. fifteen minutes could save you fifteen percent or more on car insurance.
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this is "options action." tonight -- that's what investors were saying this week, why gold could be flashing a secret buy sign. plus, weird science. the hot biotech sector has suddenly gone cold, why there's even more pain to come and the '09s are back. that's because tech names from the early '90s are on a serious run and the action is about to get hotter.
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"options action" begins right now. i'm melissa lee, these are the traders here in times square and sunny san diego. marke netflix, 3d systems and solar city got crushed in today's session. the cyberof something more troub troubling. let's find out. some serious moves to the downside we're talking about. >> yeah, they were. listen, i'm in the camp that this stuff is healthy. when you see, you know, manias, talking about the 3d stocks, when you see these things come unwound, these things will go somewhere more rational than where it's been of late. i don't think you can ring the bell and say there's any sign that high-flyers are coming down enmass because of the price action. >> is this a good time to get into the names like a 3d, netflix or priceline?
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>> i think you make a very point by saying they had a huge run-up. we're talking about relatively modest decline to the gains we have seen. think back on netflix specifically, we started wondering about the valuation, here we are, 50, $60 before he decided to exit the stock. so, when i take a look at this, i think dan's right, some of correction of a sort, it does seem like a good idea, i don't think this really is one yet. it needs to have more significant declines. >> dan is right. this is healthy in these names. everything that's worrisome today, is the fact that the s&p made an all-time high and really had an ugly day rejected that all-time high, you know, the fixed bounced off at 14, ended
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up at 15. people are buying protection. back to these high-flying names, there's a big difference between 3d and netflix, netflix not that far from its all-time high. melissa, do you buy these names? you probably buy 3d. netflix, you got to really believe this story. >> there's perhaps a bigger pullback to come, a very defined pullback so far in these high-flying names, large-cap technology names, does that rotation will be short-lived as well, mike? >> you know, it's interesting. i think that this rotation is probably going to last a little bit long, lot of people calling for some weakness for a long time, if they get some momentum u they're going to pile into it, a little bit of legs to the townside in this space. >> dan, you're taking a look at
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3m d and opportunity here. t valuations haven't made any sense. i think 3d topped out with the market cap on $650 million in sales. you know, the industry, the sector, the technology, it may have legs for years and years to come, but the stocks were never going to grow into those valuations. you had this stock market mania, it was up 400% it has since come down 40%. that reminded me of tesla, it rallied 400% up until its september high, at its january low, it sold off 40%. they don't just come unwound in one fell swoop, they have that sell-off, tesla almost rallied 100% from that low. looking at 3d the mania may not
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be over. yes, some cold water was thrown on the party. to me, there's an opportunity the support level at $60 yesterday and again today, on pretty good volume, i think that's the revulsion trastate. >> all right, walk us through the trade. very simple one today. >> yes, sure. listen, i know that this sounds crazy. volatility in 3d systems is relative cheap. i bought the prilt call, the max risk right there, why didn't i do a spread? because i think the options are relatively cheap. if i get the move in the direction that i want, i may look to sell the higher strike -- my break even is 61.70 on the upside. er very oversold. >> if ur yo going to make a
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bullish bet in some piece of junk like this, i think probably, call is the only way to do it, i understand why someone might do it, one of the reasons tesla rebounded we started to seeing some of their cars on the streets, whether the multiples were quite on scene, people were projecting some pretty astonishing numbers. they had high profitability especially for a car company, there was a little fuel to that fire. massive institutional interest in that stock. >> so you don't see the bounce coming? >> no. >> fundamentally you don't like dan's trade -- >> no. tesla was propelled by massive institutional interest. >> there may be a bounce here. but dan is right, when you're going to spit into the wind and you're doing that with that chart by going long you have to
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define your risk. why not sell a put spread? in a situation like this, i want to risk a little to make a lot. not the other way around. you can say whatever you want about the direction for 3d. but if you're a bull this is the way to trade >> it dan, if you have to buy into a piece of junk like this and spitting in the wind, what do you say? >> that's the beauty of the trade. look at how bad this sentiment is. tesla back in january, the story looked dead as a doorknob. i love hearing people saying stuff like that about my trade. buying 100 shares of 3d systems that will cost 5,600. gold, the metal sector suffered
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a serious slide. dominic chu is back at headquarter and roaring start for gold this year. so entering this week, gold was poised to have the best first quarter of any year in the last 27 years, but now, it could just be the best first quarter since 2006, it's still impressive but well off that break-neck price. you can thank the fed and the perception that it can raise rates sooner that it expected. it's on the decline now. the question now becomes du the down move persists or do bargain hunters step in and keep this bull run alive. >> thank you so much, dom. let's hit the chart master, carter worth.
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are you still bullish. >> we are. a normal giveback, a very big to the year. you violate it to make a low, violate -- low after low. what happens here, we have this massive low in june as everyone knows, again, we have a rally, but this time, we don't violate, so we have a well-defined dou e double-bottom, here's the rally of this year, massive rally, put this in context, same chart, let's draw that double bottom again, that's a major break among the line. import of the strength that began this year. or you can rely on the smoothing mechanism. here's our double bottom. has now gone flat. the definition of a bearish to bullish reversal and finally, let's put in the context of where we have been, this is the peak of gold for the gld, this
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is the low, and we have thrown back now about 1300. it will take you to 1500 and basically, that's where gold is headed. we closed this week at 1350. the gld played on the long side. >> mike, you agree with this? >> i'm not typically a gold bug, but i will say this, gold is a sentiment trade. we called talk about the fact that i think the perceptions on rates are probably a little bit -- they're getting a little bit of ahead of themselves. as a sentiment trade it makes sense to me. the good news is, this is one of those places where it's relatively easy to do this using options because they're quite cheap. you can buy the gld, 135 call. 3.5 bucks for you. between splitting between the regular junes and the quarterlies. you can look at either one of
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those and it's a good way to make a bullish bet through the end of the second quarter. i think, you know, options are cheap. it's an easy way to do it. >> dan, would you do this trade or hedge upward by buying protection on the s&p 500? >> yeah, i don't like this as protection. carter nailed the bottom and you know what, at the end of last year, it was a very, very oversold conditioned with very, very poor sentiment. i don't think you can make the same argument about gold. i don't believe it's a fantastic hedge. if anything, treasuries have shown us to be a better hedge. but i do believe if you know what hit the fan i would rather own gold. >> you're right about treasuries, because we have over the course of the last several weeks, we have seen some bullish call buying. that's some hedging activity.
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you don't need to think about this as a hedge. this is trade on gold. >> if you believe what carter has to say, then this makes sense. i hate gold. i don't think it's an investment. it's no more an investment than baseball cards are. if i were to do anything in gold that were bullish, i would define my risk. >> if you have a question, send us a tweet. maximize your profits in the spy. a trade in linkedin. the web is the future, what can we say? the exclusive trades. check it out. here's what's coming up next -- ♪ everybody dance now pining for the 90s? so the market. we'll tell you why traders are betting big on '90s names? plus --
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>> we warned about the bitech bust. what he sees next. that's when "options action" returns. options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ sunny or bubbly? cozy or cool? "meow" or "woof"? wheels or wheeeels? everything exactly the way you want it ...until boom, it's bedtime. your mattress isn't bliss: it's a battleground of thwarted desire. enter the all-new sleep number classic series. designed to let couples sleep together in individualized comfort. starting at just $699.99 for a queen mattress.
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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. it's about to go flat. put in head and shoulders top. you can put in your trend line the presumption is lower. >> that's our own carter making a bold call on celgene. biotech got its brains beaten in. carter more pain for the sector and for celgene?
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>> you have to assume there's more. the chart of the nasdaq group itself. you have a fairly well-defined trend here the presums is, we're ultimately going to break trend. that can't last forever. celgene is leading the way. what's remarkable the presession of that top, the neckline, you're hovering at these lows and ultimately that is a very powerful set-up for a break. this gap down here, if celgene continues, the biotech will finally break trend as a group. >> mike what do you see specifically? we had the letter from the democrat congressman questioning the high prices of drugs, at the same time, celgene had approval for one drug and still the stock was trading sharply lower.
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>> this stock is getting punished for a couple of things here and largely, it's being carried out in the group. one thing about this stock, when you look at it fundamentally it's very hard to argue that it's expensive, in fact, it looks quite cheap, i can see the trend line that carter is referring to, but with this trade, i would like to take some of the profits and use just those profits to push a bearish bet. but, i think you need to take a little bit of money because it can bounce off of that lower line there and you know, i just -- the stock is too cheap to press it aggressively. >> dan what is your take on this? because we can say all of these biotech stocks have done extremely well, but to mike's point, the trailing p.e. is 40 and forward p.e.s are in the 20s? >> some of the moves of the high
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flyers coming in was a problem? >> i would make a problem that a seco secotor like biotech, if they broke down, that would be a big problem for the market. on a forward earnings basis, they're relatively cheap. so, this sector breaks down technically, then i would like for other things to come in. >> carter, i want to go back to you whether or not this is a coal mine for the broader market. we had the nasdaq severely underperforming earlier today, it was down 1%. biotech, biggest decline. >> in the period of where things might get iffy, people look for things that do well. this is one of the best performing areas of the market. celgene's stock didn't act well.
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>> these stocks are getting killed. why in the world do you want to take profits, this trade mike made was a bearish trade it's working perfectly. >> yeah, one thing right here we're facing a little bit of decay on this trade. i think you need to take promise props on that bet coming up next -- why is everyone talking about michael jordan and kurt cobain, because the '90s are hot again. another '90s name poised to move. we'll tell you what that is when "options action" returns. w gum.
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♪ [ 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. ♪ ♪ ♪ ace of base, michael jordan, all staples of the '90s.
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hewlett packard and microsoft have been surging this years. another '90s favorite potential for breakout? >> well, you know, you just named it, microsoft, it broke out to a 14-year high this week. hewlett packard, a year and a half high. and emc. the sentiment was really bad lot of those stocks were rallying. one stock fits the same big, a monster buyback, but it can't get out of its own, they gave a downbeat outlook, cisco. the sentiment's really bad. here's the thing w the s&p where it is, we're going to go higher in the next month or so, the
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rally has to broaden out a little bit. to me, you know, i just took a look at the calls, the options are pretty cheap and they're trading at the low end of the one-year range. when the stock was 21.70 today, i just bought the may 22 calls for 55 cents. if this stock gets any momentum and the sentiment shift it's going to be above 22.50 very quickly. >> barclays downgraded this stock earlier this week. it's going to stuck in the range because the dividend's stink. take a look at dividend yield. one reason why it may never see this catch-up trend. >> buybacks are probably better from a text perspective.
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you have a company that's going to deliver probably 2 bucks in eps this year and next year. take a look at microsoft, if you think the market is going to pull back, you think this stock is going to trade down. this thing is trading cheaply and consistently delivering more than 20% -- >> dan, you know as trader that relative strength matters. all of those other stocks you mentioned have been going up. this dog hasn't moved. something's wrong with this thing. >> here's the thing, as a con trainian trade, you're trying to get in before anyone else identifies it. i want to get in there ahead of time and listen, i defined my risk, "the call" is cheap. if the stock break s 21 i'll probably be able to break these
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calls for about half of what i paid for them. >> last word. >> gld, you get less opportunities to make levered bets. coming up next -- the final call from the options pits. ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ [ chainsaw whirring ] humans -- sometimes life trips us up. sometimes we trip ourselves up. and although the mistakes
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you are gonna need a wingman. and with my cash back, you are money. forget him. my airline miles will take your game worldwide. what i'm really looking for is -- i got two words for you -- re-wards. ♪ there's got to be better cards than this. [ male announcer ] there's a better way with creditcards.com. compare hundreds of cards from all the major banks to find the one that's right for you. it's simple. search, compare, and apply at creditcards.com. first round's on me. [ 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.
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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. time now for the final call the last word from the options pits. dan in san diego? >> with 3d down 40 prkt from the high, i would play it from the long side than push the short. >> carter? >> if you have nice gains in your piotech stocks, take some money off the table and try gold. >> a high probability trade that yield seekers love. >> mike. >> look for sentiment shifts before you make your bullish bets like gld.
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i wouldn't get into 3d. >> what did you call it? >> a piece of judge. >> we'll leave it there. our time has expired. i'm melissa. for more "options action" check out our website on cnbc.com. "mad money" is coming up next. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always bull work, and i promise to help you find it. "mad money" starts now. hey, i'm cramer! welcome to "mad money." other people want to make friends, i'm just trying to save you money. my job not just to entertain, but educate and teach. so call me. this market sure has a hard time making up its mind theseay
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