geopolitical -- >> i'm watching the ukraine. >> folks, governor dean, you short of frightened me when you said you were pretty sure putin would invade. we'll be watching that. thanks to all of you. we appreciate you being with us this friday afternoon. >> and have a good weekend to you, tyler. meanwhile, "fast money" coming up in just a few seconds. melissa lee, what's on tap? >> hey there, guys. today we witness the crush of the internet stocks. we have the ceo of zillow who can talk about the spring selling season. >> spencer. over to you. >> thanks, guys, "fast money" starts now. live from the nasdaq market site in new york city's times square. pete na jair jjariannajarian, s josh brown. the nasdaq the biggest loser closing down 1.75%. internet stocks getting burned. amazon down nearly 10% after last night's disappointing conference call. facebook, netflix, pandora, all

getting hammered. price action not good considering we basically closed the session low. >> facebook surprised me. amazon i thought did a good job. both hands sell it. if the stock was trading around $400, the stock would be down $35. lo and behold, that's what it wound up doing today. facebook, i thought the quarter in facebook was fine. i know petey probably stepped in a little today. i was really surprised at how poorly facebook traded because that's traded worse than amazon over the last couple days. in terms of levels, i'll say it again, we said it at the beginning of the month, that 1834 would come into play towards the end of april and guess what? it's getting close. it's imperative if you're bullish for the s&p to close above 1834. >> it really kind of started with amazon. as that started to roll over, we really watched everything from twitter to netflix. you can go down the line of the big cap names. but i'll tell you what, of those names, facebook is very intriguing because on this 5%

sell-off, when you look at that quarter, that quarter was absolutely outstanding, mel. you look at the cash generation, just under $1 billion as well. all the number they put up exceeded just about he have expectation. i think because of that i'm very impressed with them. i think that this stock finally underneath $60 a share, around $58 i decided to jump in with options very short term because i think this market right now is a very short-term market. >> geopolitical concerns getting into the weekend. that played a role in terms of the losses. >> i heard a lot about that today and i heard a lot of people really in the media talking about it, but none of the traders or investors i've spoken with are really talking about it. i'm not saying it doesn't matter but i don't think it was behind today's action. i believe what we're seeing in the risk on more aggressive sectors just has to do with portfolios unwinding risk. i think there's a little margin issue as well and i don't think people are trying to figure out russia and ukraine and then deciding what to do with twitter and facebook. i don't think that connection is being made, and by the way, s&p

about 80% of it is above the 200-day moving average. that does not strike me as an environment where people are freaking out over a war or geopolitics. i think this is very confined. >> they might not be freaking out, but margin is probably a bigger issue than all of us knew or thought it to be, and i think they're getting whipped around both on the low and on the high. they're getting margin calls on here. everybody was double levered. hedge funds had to play from the long side and now they're wrong. so the thing that upsets the market the most at any given point the market sets up the -- hurt the most amount of people right now would be a sell-off. you have 80% of hedge funds probably trailing their index and you have the mutual funds and pension funds, long onlies are getting hurt, too. as far as the momentum play, this is strictly a rotation play. that's what's killing amazon. it's not profits. >> you bought it. you bought it today. >> i did buy it and i was wrong yesterday on the show. i did not think amazon was going to get slammed as hard as it got slammed today out of the gates,

but for me i want -- you said it was kind of a silly or a -- you need something? >> no, no. >> you want something right now? i saw the hand go up. i know that means something. for me the market has to hold, and it's 1856. it's slightly below the 50-day for amazon and these high flyers to be buyable, but i bought it anyway because you're never 100% right. i bought a little bit of a leg. i bought 50% of what i want to own. if it gets smacked around, i'm going to buy more. >> would you do the same? yesterday grasso was the only person on this desk who actually made a case for amazon saying we still look through these things like razor -- >> as the stock tripled in value, everyone said the same expect thing they're saying now. the rotation. >> it's a different market. it's a different market. >> it's the rotations that is different. the question is how long does this rotation stay on? how long before people get rotation frustration and switch -- >> i would say though that it's not just a rotation.

it's starting to ma tsa size. you have the three key sectors below the 50-day, financials, tech. you can't have those two in a down trend and now health care has joined them. that's a really tough way to say, hey, it's just tesla so it's getting harder for most longs. it's not getting easier. >> back to steve's call on amazon and i applaud you for having the guts to go in there today, but when i look at the quarter, the one thing that stood out was the fact that they keep spending money and obviously the revenues are going higher as well but it's about the margins as well. that's something i think a lot of folks have focused on as well. mark mahaney was talking about this -- >> spending like a drunken sailor. >> that's right. >> you could say it but analysts last friday, 35 out of 40 of them were more positive on the name. now everybody switches around on it. for me -- >> analysts are always a little -- they're usually a little late but i think the one thing mahaney was talking about was the fact they focus so much on china and china has huge competition over there. it's not just that amazon is

going to walk in and take over right away like a lot of people are expecting. you throw money at it does not mean amazon is the biggest player in china. >> bond market has been rallying, rates have been going lower. it started happening long before any of this geopolitical unrest. to me the bond market has been seeing something the equity market hasn't seen since recently. >> let's talk twitter, down 7% on the day. it's been a bit of a wild month for the stock as wall street gears up for the first earnings release. how are we setting up? you can go either way. you could say it sold off so much that maybe the bar is really low. >> i said that yesterday on amazon. >> i'd still like to see this name as a show-me type of name. it's like facebook in the first quarter or two as they were starting to show they could get the traction, could get the mobile advertising dollars that

everybody had hoped for and zuckerberg has delivered. you've seen that stock go from $20 up to $72 and now this pull back. you have to tell you something, i think twitter right now has that sort of falling knife feeling for me. if i were to jump in, mel, i would only do it through options and only do it through a call spread because i want to maintain sort of a risk reward sort of a potential there and not jump into the stock just that. >> it has a falling knife quality. josh brown, do you think so? >> i have a small position. i was hoping to get it a little cheaper. i have not done so yet. i am holding it through the earnings. it's a very low conviction hold. i agree with pete, it does feel a little bit like a falling knife, but here is what i'm going to tell you, there's a big lockup expiration coming a week after they report earnings, and management tends to have really good news when they need to in the social media space. we've seen facebook at critical junctures for the spock price or foreother lock up expirations so don't fall out of your chair if they have something up their sleeve to announce.

i don't know if it's a partnership or whatever. i have no way of knowing. it just feels to me it's too easy. they're going to come out with another lackluster report and crater to $20. i doubt that's the case. >> another momentum name getting hit today, zillow. weak housing data not helping. new home sales saw a 14% drop in march. joining sus the ceo of zillow, spencer ras kof. it's always great to see you. >> thanks for having me. >> the stock was down 10.5% on no apparent news. what do you make of this market environment and this takedown of all these quote, unquote, momentum names. >> it's clearly a very volatile market for high growth tech stocks. i think if you ask the ceos of any of these companies, they would say the same thing which is as odd as this might sound to you, we honestly don't concern ourselves all that much about it. i know with a great degree of confidence five years from now zillow will be worth a lot more than it is today.

we focus on building the business and let the stock take care of itself. >> let's talk about the 14.5% drop in new home sales. what are you seeing right now as we gear up for spring selling season? >> what's happening in the housing market right now is there's just limited supply, and there's limited supply because there are so many homeowners who are upside down on their home loan. about 38% of americans who have a mortgage are effectively in a negative equity position and that means they can't really list their home because they're upside down or nearly upside down on their home. so limited supply, a lot of demand, that means home prices spike and that's sticker shock for home buyers. that's what's happening in the housing market. the way we get out of this situation is as home values rise, more people come out of negative equity, more listings come on the market, supply and demand gets rebalanced. that's where you capture us in the housing market right now. >> spencer, it's josh brown. it's kind of tough to make the case if the housing weak sentence going to continue before it gets better, it's

tough to make the case that a business that's a real estate advertising business, which is what you are, are going to be able to stick it out without either having to come down in average prices or see a drop-off in traffic or whatever the most important metrics to you are. the history of housing market says that those things don't happen over three months or six months. they're multiple years. does that worry you? are there other things you can do as a business to offset it? >> what's happening right now is there's a huge migration of consumer audience from offline to online and that's what's driving our business right now. we're at around 75 million monthly unique users a month. two-thirds of our users are now mobile. advertisers follow audience. if we learned anything from youtube and facebook and pandora, it's that where audience is eventually advertisers follow. real estate agents in the u.s. spend around $10 billion a year in advertising. most of that is still spent offline. i believe most of that spend will move online, it will move to the companies that have audience on smartphones and tablets. that's zillow. i think we're in an early enough

stage of that migration of consumer usage and media budgets from offline to john lionline t swamps any proclivities. housing is doing quite well. home values are up 6% year-over-year. we forecast them to be up 3% year-over-year over the next 12 months. the housing market is slowing but it's still doing quite well. nonetheless, zillow's results are really buoyed by consumer audience migration, which is then bringing ad dollars. >> spencer, i want to ask you about the partnership you recently announced with the chinese website. you're going to have this jointly branded website in china. how much of the market -- how much of a market is there for this? are you seeing chinese buyers come to the u.s. often? >> very significant. not unlike the last segment about how the foreign buyer is driving the luxury retail segment on rodeo drive and elsewhere, we're certainly seeing it in major markets on the west coast, the southeast from south america and certainly russian and middle eastern buyers in the new york area.

>> this is really the high end market we're talking about. >> it is, it is. so zillow's partnership with one of the leading real estate sites in china is an important part of this. it's making sure that listings on zillow appear in front of chinese buyers. that's very important to the real estate agents, the 50,000 or so real estate agents that advertise on zillow. a lot of them in these coastal markets want to make sure their listings are exposed to foreign buyers in china so that's what this partnership is all about. >> spencer, always great to see you. spencer rascoff, the ceo of zillow. zillow had been prior to today one of the stocks that weathered the momentum meltdown fairly well. only down by one-plus percent or so over the past month and then today it's down, of course, 10.5%. >> it was hanging in there. >> yeah. >> this is a north of 50% short interest. forget about valuation because it's ridiculous in terms of the valuation of this company. but you think on a day when the stock is down 10.5%, you'd see it on a monster volume day. it basically traded in normal average volume which leads me to believe that the shorts still

have some ammo to push this thing a little lower. i'm sort of in the no touch camp until you see a big volume day which you did not see today. breaking up is hard to do. brian kelly tells us about his difficult breakup with one of the most heart wrenching trades he has made this year. that's next. and elon musk's payday. find out why tesla's ceo only made $70,000 last year. that's straight ahead on "fast." to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

he has made this year.

things just keep things just keep getting worse for fire eye. the company's stock falling another 7% today. now down more than 34% in the past month alone. now, on tuesday "fast money" trader brian kelly said he was doubling down on his fire eye position, but today it's quite a different story. he has phoned in and he's joining us on the fast line. >> first time caller, long time listener. >> all right. so what did you do, b.k.? >> 45 was my stop. i sold out yesterday. little below 45 actually because it went right through and it was moving pretty quick. it's just a bad trade. i mean, from the get-go, you know. i was able to sell some calls against it on the way down to

mitigate some of the loss, but it's just -- every time i thought it would stop, it didn't stop and kept going lower. still like the idea of the name. still like the space. it's just not going up. >> so now you have, what, three equities in your portfolio? >> well, yeah, but that's not unusual for me because i'm global macro, so, you know, i can be in gold and currencies and all of that. only having three equities is not that unusual. >> thanks for phoning in. have a great weekend. >> my pleasure. >> so finally b.k. broke up with fire eye. finally. >> play a little neil sa dak ka going out on a friday. remember that? seriously. >> no. >> it's almost a value stock at 50 times earnings. >> would you go in? >> you could play any -- if you have a stop in and if you say -- >> of course. >> -- this is where there's support, if it breaks through, i don't want it. if that's what you're doing, you could do that. >> sure. >> i'm not doing it. >> shares of ford under pressure after an earnings miss kicking off our top trades.

the automak makmaker reported a drop. >> they shouldn't blame anything except that people weren't buying as many cars. it's the reality, right? they didn't make enough sales. it was a pretty big eps miss by anybody's standards, especially ford's, and to me the tell on this stock was when mullally said he wasn't leaving and the stock couldn't rally, that was a tell. i thought the stock was going to go through 17. at $15.80 i think it's in no man's land. you can make a case on valuation it's cheap, which is true but the stock has not performed for months. >> next up, tesla revealing the 2013 compensation for ceo elon musk which amounted to a modest $70,000 including a salary of $1 with stom grants. but his ownership makes him worth more than $7 billion. the stock getting hit today. grasso you got into this name again. >> it was my final trade earlier on the week. traded from 204 to 219.

stopped on a dime there. the way you trade tesla is you look at that 184 level. that's where it bounced. that's going to be your 100-day moving average. the actual 100-day is 190 but use 184 as your stop. i would not be buying this one. i have enough on my hands with amazon. >> coming up, pharma news dominating the headlines. pete najarian with some unusual active in one name. it's after this break. if you wear a denture,

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>> it's neil sedaka. one of the greatest song writers from all time. like burt bacharach. >> that's a great crew. >> anyway, time now for pops and drops. drop for jetblue. >> speaking of burt bacharach. you know it's bad when airline stocks go higher and this can't rally and airline stocks go lower and this underperforms. dropped like a stone, pete. i have been a bull on the stock for so long i have to give up the ghost here. i have been dead wrong for a while. >> wow. >> breaking up is hard to do. >> rob, for visa, down 5%. >> panda. just kidding. if visa is worried about ukraine issues, then you have to be worried about buying visa. i would wait until the overall market stabilizes before you jump back into visa. i would prefer to wait above $2 $200. >> pop for sun power. >> it's up 30% on the week. i'm long the stock for a long time. it good hammered in february.

now it's come all the way back. i think it's going to higher. they had great news plus a new partnership with google to announce. >> pop for haines brands up 5%. >> they absolutely crushed on every single metric across just about every single category. they guided higher and the stock reacted. stock is still cheap. the champion is the one of the brands that really crushed them this past quarter. >> and a pop for tan mom. patricia is trading in her tanning bed for some boxing gloves. they will be going three rounds. she was arrested for allegedly taking her 5-year-old daughter into a tanning bed. >> she looks like an escort for oompa-loompas. that's not nice. >> i want to unsee that.

time now for unusual -- >> it is unusual activity. >> more unusual activity. >> does it get more unusual than that. >> she's almost as tan as guy. >> similar orange. >> similar hue. >> this is a serious show. we have options, usual activity. >> pete. >> a spinoff from pfizer, very interesting category. looking at the may 2nd expiring 30 strike calls. traded over 2600 today. not a name that comes up all the time so when it hit today it actually got our attention and we think there's something going on here. only got a week to perform though. these are the options to expire next friday. >> what kind of activity have you seen the space. >> massive activity across just about every name. before the allorgan news there

was a smart trader or somebody who seemed to know something selling downside puts, reducing costs and very well rewarded off what we saw with mr. ackman earlier in the week. >> thanks, pete. >> for the record, guy, you don't do any self tanning. this is your natural hue. >> it's my natural hue. i'm half italian, half sicilian. said it a thousand times on this show. i have nice skin. >> only natural juices and berries. >> you need to use facial scrub. no kidding, really. >> time for the final trade. let's go around the horn. pete? >> the dollar names are both very active. family dollar but i'm going to dollar general today. >> grasso. >> bank america. sold out of my position waiting to get back in around $15 is where i'm looking entry. >> josh. >> agricultural still looks the strongest in the market. i'm staying long, m-o-o. >> guy. >> this is a fun show. >> fun, fun, fun. >> mylan labs. >> staying in the medical space. >> a nice day on the tape.

>> coming up on mad money, cramer is defining the stocks defying the tape. thanks for watching "fast." we'll see you back here on monday. have a great weekend. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today...and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen.

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this is options action. tonight -- ♪ >> that's what traders were saying today but we've got the surprising sector that can weather the storm. you'll be shocked what it is. plus -- >> ♪ come a bubbling crude >> oil that is, black gold. energy stocks have been on fire. we'll tell you which name is about to get even hotter. and want to get an edge on earnings. one big name reporting next week is seeing some unusual activity.

the action starts now. welcome to the nasdaq market site. i'm melissa lee. these are the traders in times square and at cnbc headquarters. call it the beat down. a number of growth stocks posted great earnings but it didn't matter. investors took them to the woodshed this week. check out, in fact, netflix, amazon, and facebook all sharply lower post better than expected earnings result. could it signal the end of the party of the stock rally. let's find out and start off with the resident bear. >> we call it skeptic. >> whatever you want to call yourself, dan. >> you just listed three names that have really defied gravity through this last leg of the bull rally. when you look at the results, in a lot of ways the headlines looked like they were in line to be better, but when you peel back underneath, there was some kind of troubling signs. so really to me the price action that we saw this week in those stocks after reporting headlines that to most viewers at home looked good enough to keep things going especially after a lot of these stocks are down 10%, 20% heading into this week, some even more, they just weren't good enough.

the psychology of investors, they don't want to own growth at any price and it's a real problem. >> it's not just psychology. these things were ludicrously surprised to begin with. when you look at earnearnings, a look at the sales numbers, a few beat the revenue number. it actually doesn't look that good. usually you see, you know, 10% beating the revenue number, a bigger percentage beating earnings. when you see a split down the middle, that's not so good. look what amazon said. they're basically forecasting a loss fer tor the current quarte. this quarter we're not going to make money. why would you be enthusiastic? you have to press the shorts here. >> melissa asked is it over. it's certainly over for momentum stocks. i don't know anybody who wants to commit new money to momentum stocks, but mike really touches on something important and that is about three weeks ago we expected earnings growth for the s&p to be pretty good. well, in that time, it's only been three weeks, that estimate has come down about 25%. so people are lowering

expectations and then they're meeting or not quite getting there, and you can't do that. if you're going to lower expectations, you need to do much better. mike hits on the important thing though for amazon. this quarter, the current quarter we're in, it looks horrible for them. people are tired of that story. they're tired of the it's going to grow and grow and grow. they're tired of that. >> i have the big one though. when you think about -- we know it's been tough in small cap land and we know it's been tough in high valuation, high growth land. the nasdaq is down 7% from the highs. the russ sel down 3% from t7%. do you know what's not down a lot? the s&p. it's down 2%. if you look at that chart right there, that's a trend line for the last 18 months or a trend channel. it has not broken. it's not broken it's 200-day moving average since november of 2012 on the downside. we are overbought. if the s&p -- it large cap stocks start to participate, we're going back to 1750. >> carter worth, i want to bring you in. you're in the magical place we

call inglewood cliffs. in terms of the divergence, can we see this continue? >> the numeric unchanged situation, which is the s&p, we're virtually at all-time highs and yet parts of collapsing is a function of the rotation. we have seen epic rotation out of growth and into value. what happens after this initial phase, and this is seven weeks old, is the value starts to succumb and the growth doesn't get better either in principle and that's the way history shows this gets resolved. so the implication, of course, is that the aggregate s&p goes lower as parts go lower. >> so this is going to be a concern. i think if you're in the momentum names or you're simply watching the space, dan, what is particularly concerning -- you can explain amazon in terms of operating margins, but facebook. facebook is trading sharply lower. if that was a great quarter, and look at where it is now, it's being taken out to the woodshed just like any other stock. >> i think people loved the growth. the company is doing a lot of

good things. there were a lot of questions about the two acquisitions. i will pinpoint when it start, february 6th, when twitter reported their first ever public company. the stock went down 24%. everything on the headline looked better, revenues, earnings, guidance. you know what didn't look good? growth. their monthly active users, engagement was down. if you go back to that date, all of these stocks, the yelps, pandoras, everything, they were all basically at all-time highs. that's when the party ended and i think it continues. i think you sell rallies in all of these names. >> what's your trade on twitter? >> this is a tough one and there's two events that are coming up. next week on the 29th they'll report their second public quarter, okay? listen, i can't imagine that some of the user issues are going to be a lot better. the company blamed it on boarding. that people logged onto twitter and they don't know how to use it. i don't buy that. i think the growth has stalled. i like the company but to me then you also have may 6th, 465 million shares coming unlocked. i know a lot of insiders will not sell. there's one chart we have up

there. the stock is still -- it went public at $26. it's the $42 or so. it's still up a whole heck of a lot. if this party is over people are going oto sell. today i bought a put fly. it will sound maybe a little confusing because it's not a traditional put fly. the professor will button it up afterwards. i looked at may expiration and i bought the may 40, 30, 24 put fly for about $2. i bought one of the may 40 puts for $2.55. i sold two of the may 30 puts at 30 cents. i bought one of the may 24 puts for 5 cents. mattress there is $2. where i make a lot of money is at $30, i make $8, four times my money. the implied move is 15%. like i said it moved 24% last time. >> the thing i really love about these broken wing flies is you can make a directional bet, in this case you're making a bearish bet to the downside. if you're using a symmetrical

fly, if you blows down further, you lose money. it's hard to get the direction right. in this case you don't make quite as much but you make money no matter how far down the stock goes and those are the lower probability bets. for my money i think this is a really intelligent bet on something that has a big implied move. this is a good way to play it. >> four weeks ago i was in the wilderness hating twitter saying user growth has stalled. welcome to the club, guys. it's a neat product but i'm not certain it's a great company. as to dan's trade, i understand why he's buying that 24 strike. he's only paying a nickel for it. that way he limits his risk, defines his risk, but you're only saving yourself 55 cents by turning this into a fly. just buy that -- the 40/30 spread and i think you're actually in much better shape. >> well, the truth is i actually wouldn't sell that 30 just one time. it was 30 cents or whatever. so your choice is do you -- the amount of premium you're going to commit, do you not trade all

those options. i like to know what i'm going to make where and that's how i set this trade up. >> down day for the markets, of course. one area of strength was big oil. activity in the options pit suggest even more games. dom chu back at headquarters with this. >> that's correct. traders are making bullish bets in big oil stocks. names like exxon, bp, or chevron. in exxonmobil, more calls than puts were traded today. bp saw a 3 to 1 call to put ratio, bullish indicator there, and in chevron more than 4 calls were traded for every single put option. a lot of the activity was in longer dated option its which suggests traders are seeing gains come later in the year. exxon and chevron report earnings next week. energy has been a hot trade this month so some interesting options action this time around in oil. >> thanks so much, dom. so the question is should you jump in on this bullish action. let's get to carter worth once again.

carter, a couple weeks back i believe you said you liked the xle. it's set up well. do you still like it given the gains we've seen so far? >> obviously the best performing sector now for several weeks, in fact months in a row. what's interesting here is that the entire group represents 10.5% of the s&p, 55 names. yet three names are half the weight of the sector. exxon, chevron, schlumberger, and exxon has really lagged. we think that's the opportunity. the biggest name in the group is just not participating. take a look at some of the stats. we have year-to-date, we have two-year, five-year, ten-year. exxon is really trailing the aggregate, trailing the sector by a considerable margin, and at some point that is not sustainable. if we look at some comparative charts, i think you'll see this visually. and so i have a year-to-date chart and, again, each one of these is going to compare exxon relative to its sector, the s&p 500 sector itself, all 55 names. here it is trailing year-to-date. up basically 1% versus 6%. take a look at the next time

frame. this is over the last 12 months again exxon trailing. take a look over five years. same situation. and in some cases if you look at this die jurrjens, you're talking about underwe aperforma by 50%. look at the long term chart. the top line is the sector, the bottom line is exxon itself. the opportunity is to play exxon for catch-up and this is important, even as the market really does get in trouble, exxon is a very defensive asset. so have a look at the chart of exxon, if you will, the chart itself, and you notice where we are now. we're back to the highs of december centering on about 100. and so after a sell-off in february we're back to where we are. take a look at a longer term chart. a five-year. look at the trend line. where where we are now. see the arrow i have drawn and finally look at the chart right now in relation to its all-time high. this is quite well defined level. we're toying with the prospects

of breaking out above the tops of '07-'08. very interesting moment for exxon. >> carter, thanks for that. mike, how do you set up a trade? >> i think the best way to set up the trade given options premiums are low, look far out. i'm looking out to october. i'm going to buy the 100 calls pay $3.50. exxon is best of breed. right now it's trading to multiples similar to the rest of the space. you're spending 3.5% of the current stock price. >> if you agree with carter's thesis i like the trade. i can't agree. we are in the fifth year of this global recovery. oil has gone berserk because of geopolitical stuff but it global growth starts to slow, there's no earnings growth and it's declining sales growth -- >> midcap continues to grow in china. we will probably see that. 90 million barrels of usage and there's only 2.5 million barrels

in the middle east. i really don't see where you think there could be the bottom falling out -- >> this is a perfect example of earnings expectations coming in. right now we're expecting $1.88 a share. 90 days ago we expected $2 a share. this company should not have any trouble meeting or beating what other companies have not been able to do. exxon wonderfully managed. >> they missed last quarter. >> i didn't realize we were trading last quarter. i think i'm trying to trade this quarter. >> whoa. >> expectations are quite a bit lower. mike is making a good option trade because he's defining his risk. he's buying an inexpensive option but because he's buying an option he's buying a longer dated option. that's the way to get the math working for you. >> got a question for us, send us a tweet. scott's answering a question about how to make a bearish bet on bonds. in addition to scott you will find great educational material, exclusive trades, and the latest options video. here is what's coming up next. mike is going undercover to find the stock traders love ahead of next week's earnings.

we'll give you the edge. plus, what sector are savvy traders hiding out in? we'll tell you when "options action" returns. ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ ♪

[ 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. earnings, earnings. now options can be a great tool for predicting where stocks are heading, but it requires some investigative work. so this is a new segment we're calling earnings csi and it's where mike goes through the data finding clues about a stock reporting earnings next week. it gives him a chance to tap into his inner david caruso

looking generally very serious. usual activity, which stock caught your eye? >> it was mgm. they will be reporting on the 29th. you look for different kind of things. just a lot of options activity or whether the ratios change. people were trading more puts than calls by 50% or 60% today than they usually do in the stock. two the most active options were puts. the one that caught my eye was the may 22 puts. they're obviously making bearish bets going into earnings. these are going to expire the third friday in may. i think looking at this though i would probably be inclined to take a higher probability bet and i would probably look to do the may 23/21 put spread. you can spend 50 cents for that trade. you will start making money before the other one even breaks even. you have to see the stock move down materially for the other trade to get ahead. over the last several earnings, this thing has moved about 11.5% in the month that follows

earnings. so 11.5%, that gets you down to about 21 bucks or so. so you probably want to see the maximum profits there, 23/21 put. >> this is the worst looking chart i have seen in a long time. this is a classic textbook head and shoulders and i love targeting that $20, $21. >> and the option trade makes a lot of sense. he's not risking a whole lot of money to make a fair amount of money. >> carter, i want to bring you in. you have done your own investigation and dan is talking about charts and dan is not a chart guy. usual the chart guy. what have you found? >> everyone is entitled to look but he has it quite right actually. here is a chart of mgm. we have a shoulder, we have a head, we have a shoulder. well defined neckline. the presumption is it gives way, breaks here. $20 is a reasonable objective. it's not a good set up. >> like i said -- >> like you said. exactly. good job by dan. >> yeah. >> i'll tell you, the whole sector looks really bad. wynn resorts went from $200 to $250. >> you're negative on china so -- >> he's negative on the whole

global economy. >> this would be a good place to start. >> discretionary spending has to crash first. >> although mgm not as tied to china like some of the other names like wynn and vegas sands. >> true. coming up, can old tech keep on chugging. is this the unlikely safety trade for 2014? we'll tell what you our traders think when we come right back. ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.

i'm taking off, but, uh, don't worry. i'm gonna leave the tv on for you. and if anything happens, don't forget about the new xfinity my account app. you can troubleshoot technical issues here. if you make an appointment, you can check out the status here. you can pay the bill, too. but don't worry about that right now. okay. how do i look? ♪ thanks. [ male announcer ] troubleshoot, manage appointments, and bill pay from your phone. introducing the xfinity my account app.

♪ [ 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. ♪ when something is good, that's good, but how about making something good even better? that's what dan is doing with his bullish bet on cisco. take a look. on "options action" sometimes risking less to make more simply isn't enough. sometimes we want more cash and that's just the case with dan's bullish bet on cisco. ♪ cisco kid was a friend of mine ♪

>> dan was a fan of the tech giant. >> the stock like cisco could start to participate. >> but just buying the stock 100 shares would set him back more than $2,000. >> that's a lot of money! >> sure it is. so to make his bullish bet, dan bought the may 22 strike call for 55 cents. that 55 cents is the most he can lose on the trade, but to make money, dan needs the shares to rise above the strike by more than the cost of the trade or above 2255 by may expiration. but it gets even better. because that call will increase in value faster than the shares will if they rise meaning more money in dan's pocket. and since the time of the trade, cisco shares have risen 8% which is good but not enough to make this trade a big winner, and that's why "options action" fans are asking how can dan make more cash? before we find out, let's see

how well we have done. if dan had bought cisco on march 21st, he'd be up 6%. that's not bad. but his call has more than doubled his money. he bought it for 55 cents and he can buy is for $1.30. the segment is called i want more cash. >> i think you have to start with the premise do you want to stay long the calls? they're going to report earnings on may 14th and that's a definable catalyst. to me these guys get 35% of their sales from overseas in asia and in europe. i don't like the setup here anymore. there's three things you do. i sold them right around here for a double. i like getting doubles in options trades. that's one thing you do. the other thing you can do is sell the may 24 calls against it for about 30 cents, reduce about half of your premium risk and lock in some of that spread that you just made or you can actually sell half and take your cost off the table. those are three options but tough decide whether you want to remain bullish. when they report, i don't think the quarter is going to be great given what we have seen in the

earnings cycle and you may get a lot of gimmicky sort of stuff like we saw with apple, increase share buyback. i think you take the trade and move on. >> you could roll out and up is another possibility. i also don't like the idea of staying in this thing. you're in an option now that's decaying pretty rapidly. just spreading it just so you can mitigate some of that when you're not really seeing that much conviction doesn't make a whole lot of sense. >> i would not sell the may 23 call. you might think i can sell that for 65 cents. i get into a situation where i can't lose money but you also get yourself into a situation where all i can make is a buck and that's just not a situation i want to be in because this is a solid stand-up double and i don't want to turn my solid stand-up double into a trade that can only make $1. i like taking half off and -- >> no, that's a baseball term. >> thank you, for the explainer, dan. >> i'm just saying. i want to broaden this out to old tech in general. is this cisco specific? how do you feel about hiding t

out, mr. bear? >> when we put this trade on a month ago, i liked it because i really thought this move into some of the large cap tech niams that are perceived defensive, 30% of their market cap in cash and the stock has really underperformed. it's a catch-up play. it almost got to 24. i liked it there. i don't love it here. >> it is more defensive to be in old tech because they don't have the situation of being ludicrously surprised to begin with. you can see that in apple, one of the few tech names that are performing fairly well. obviously that's being supported in large part by the fact that they're doing the 7 for 1 split. those names actually don't have as much hazard to them underneath. so if you have to be long, i'd rather be long in there than in the mo mo techs. >> you just saw the chart of cisco versus micro10sofmicrosof. mic micro -- i don't see how microsoft goes higher unless it does financial engineering like

apple did. >> coming up next, we have the final call from the options pits. [ 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. ♪ if you wear a denture,

take this simple test. press your tongue against it, like this. it moves! do you feel it? it can happen with every denture. these movements may irritate your gums. but you don't have to bear with it. you can try fixodent plus gum care. thanks to its formula, your gums become one with your denture. this helps stop movement and helps prevent gum irritation so you can keep enjoying life. [ apple crunches ] fixodent. and forget it. [ 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. time time now for the final call. the last word from the options pit. carter worth. >> if you don't have exxon, get some. if you do, retain what you have. the presumption is the value growth rotation continues. >> scott. >> traders have had their faces ripped off trying to bet against bonds. this week's web extra is how to do sensibly. >> i wouldn't short a stock like twitter that's really oversold. i would short it with his money but i would like at defined risk bets that you think define a range where there's a risk you're willing to lose. >> pointed out that the s&p really hasn't drop ped -- protet

your portfolio and you can look to purchase. that's a good manufacture here. >> it looks like our time has expired. i'm melissa lee. check out the website options eastern time for more "options action." "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 a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends, just want fewer days like today. my job is not just to entertain but to try to explain things like today and to educate you. so call me at 1-800-743-cnbc or tweet me @jimcramer. sure, absolutely,