walmart shareholders meeting on friday. thanks for the panel. >> anytime. >> setting up to be an exciting month. >> and the fun continues. f "fast money" coming up. >> always a fun time at the nasdaq. lgf shares 11% downdraft on the stack. we have the vice chairman michael burns of lionsgate to answer questions about what happened in the quarter to also give us a look at what's coming up including "orange is the new black" next week. >> a purple diamond would go well with your outfit. >> we're like twinsies. "fast money" starts right now. live from the nasdaq market site in new york city's times square, i'm melissa lee. happy friday, everyone. our traders tonight are tim seymour, brian kelly, steve grasso, and pete najarian. lionsgate shares getting hit hard. reporting weaker than expected revenue. we have michael burns in an exclusive interview coming up. the top story tonight, the s&p

closing at a record high for the 14th time this year. the index up 2% for the month of may, but there are three potentially market moving events next week that our traders are watching. china pmi sunday, ecb meeting on thursday, jobs report in friday. toss in there worldwide developers conference. pete, the action today wasn't that great. >> it wasn't that great but it's actually pretty impressive when you look and see where we are and how this broad participation pushed this market higher. every said sell in may and go away. if did you that, you already missed 2%. if you're looking to next week, that ecb meeting really stands out. the china pmi, we've been watching that trend. it's getting closer and closer to 50. that ecb meeting, everybody has been talking about europe and draghi. that's going to be the biggest market mover in a long, long time. >> we heard it from david tepper. >> but it's been priced in. there's definitely a setup that could be disappointing. i think they will cut the refi by 15 points which will get the

deposit rate into negative territory. they still can't really be doing the asset backed buying and the qe like we did here. if you think it's game on for more stimulus, markets could trade higher. i think the china pmi is largely a nonevent because i think we've been range bound for almost two years. i think china which last night cut the rrr. emerging markets just completed -- they had their fourth up month, first time they have done this since '09. emerging markets are trading better. i think ultimately if you look at the jobs number next week, this is something where we start to see rates start to move. i think, and there was a fed paper this week out of the richmond fed that the unemployment rate actually does not underestimate the slack in the labor market. a lot of people felt like the 6.3 is not really a 6.7 and actually i'm one of the people that believes rates are stuck in a range where they're now going to move higher. they're not going to break out but move higher. >> tim mentioned the fact that the ecb is already priced in.

don't go out and start buying european shares because you think ecb is going to start qe. those shares have already run. those have already priced this in. don't get all excited about that. everybody thinks that draghi is going to do something. maybe it's this first step but there's a lot of structural i am pedments to them doing anything and they are behind the curve. so i actually think that's the big wildcard next week and if you're going to trade -- >> you mean if he doesn't do anything. >> right, right. >> to tim's point, if it is priced in, then does that mean you sell the news? is that a sell the news -- >> that's what it sounds like. >> i agree with that. if you look at china, pmi might not be a huge catalyst but if you look at the news out today, iron ore stocks got hit today. china is foregoing longer term contract it's, buying spot because they're concerned with growth going forward. they're concerned with pollution. they're concerned with a host of other reasons, but gdp seems to be in question for china and that's a direct reflection. when you look at the chart on iron ore, it's right in the

tank. if you look at everything is dependent on that, coal, steel. >> are you saying sell the miners? >> i'm saying sell everybody. i'm saying if you look at where the market closed, 1923 in the s&p cash. she's an overshoot level. if you believe in technicals at all. we've seen these levels time and time before stand up. look at the numbers. 1576. down to 666. the overshoot level exactly 1923. does it stop on a dime? i don't know. but we're reaching a pinnacle, ec b, apple on the split. >> you are saying the same thing. you're saying the market is overextended and we're going down. you're saying we're going down because of the risk that draghi does nothing. >> but the better trade is to be long the euro. you can do it fxe. i think that's the better way to play it. because the u.s. market is the energizer market. nothing seems -- >> seven times in the last year

we've seen a sell-off between 5% and 8%. so at this point it's every two months. >> i will tell you what i think right now is the best trade. staying in the market but staying in it with the protection -- >> the vix at 11. >> right. you're looking at vix at 1140. why wouldn't you stay in trades and buy protection or roll out of the stock positions and stay inside with the stock replacement with the options. you can be involved and take advantage of the market. it's been a great opportunity. everybody said we were topped out at 1880 we couldn't get through resistance, then it was 1900. now it's -- >> i'm curious what you're seeing in some of the high flyers that have come back and bounced. the netflix of the world. the stocks you have to pay a premium to stay in these positions and stocks i don't think you should be. >> but you're still seeing to your point a lot of lower volatility in individual names. not just the vix which is the s&p 500. i'm talking about the teslas of the world, facebooks of the world.

you have paper, all kinds of paper. mostly -- >> facebook, google, apple, they led the s&p tech index. s&p tech the best performer of all the sectors in the best two weeks. those implied volatilities are still low. >> the volatility is so ekts treatmently low because the nervousness is not to the downside. the nervousness is am i missing -- >> look at something like a microsoft or cisco. i think those are better risk/rewards. apple has already made the move. >> microsoft at 41? >> absolutely. >> yeah, i was going to say microsoft has made a huge move. >> i agree with you guys. >> and it's a better risk/reward. >> but at a certain point where does that old tech get expensive? where does the oracles, the microsoft -- >> i think there's plenty of room for it to get expensive. it's not because people were expecting a lot at wdc but because it's a valuation. i think that's what we're getting out of tech.

>> let's get a trade update. >> i sold everything. sold all of my treasury positions. it's just been a phenomenal trade for the month of may and i was in both the ten-year and the 30-year, but as we start to approach 2% on the 10-year, the risk/reward and the advantage bonds have versus stocks, it just isn't there anymore. so i would suspect that as we get the ecb, as we get the jobs numbers next week, you're going to see some sell-off in bonds. now, where i would be concerned is in the high yield, the junk area, hyg is the etf there. what's happened is junk bond and corporate bonds, they have doubled and tripled the amount issued but dealer balance sheet have been cut in half. when people start running for the door in this, it's going to be worse than biotech, worse than what we saw before. >> other big event next week, there are a lot of events next week.

apple's worldwide developers conference kicking off monday in san francisco. apple is teasing it's going to be good. apple could reveal heavily rumored products like iphone 5, the i-watch, apple's smart home technology. others think the announcement could be small as a software update. in the past they have announced iphone 4 and the icloud in tw20. what could they announce this year? are we fixated too much on this event and not enough on other events like for instance the stock split. you think the stock split is much bigger. >> what got us off that $525 level was the dividend, was the buyback. those are all the catalysts. now the last wind of it, the last breath of it has been the split. so i think at this point you have to play it as a sell the news event as well as the ecb, but i would think that if they had the bigger size phone, that's going to be a catalyst for people to want to stay into apple and not go the android way

if you're at all thinking -- on the hump there. >> goldman sachs increase of the price to $720 which would imply apple reaches record levels. they mention investments in things like mobile payments, smart home, the things that reinforce that ecosystem. >> it's amazing how late some of these calls come. that's why when you look, you want to follow the analysts that are in front of the curve. if you look at the analysts $100 ago, it started off with some financial engineering but then they started talking about the smart home, mobile payments, obviously working towards when do they actually reduce this new phone that's going to be the bigger model. probably september according to katy the other day. and if you look at q4, that's when you expect the i-watch. i think there's catalysts out there. i'm not so sure this worldwide developers conference will give the extra catalyst you want but certainly the stock split is something you guys mentioned already. >> and just get back to the valuation. if you take out ex cash apple

is trading at nine times. i think the second half fireworks are more of their global fireworks. they just put out the iphone 5 in india. what's going on with 4g in china means they could continue to surprise with their iphones. and technically. you talk about where we are getting back to the highs, the stock is back above this long term trend line from 2009. so i think you have a little bit of everything. you don't need wdc to deliver. i bought the stock earlier this week not expecting anything. i bought it and watched it break above this trend line. >> the price action in the stock was terrible today. >> doesn't necessarily mean it's going back to $500 but you have an event coming up. you had price action where it was huge reversal on very big volume. next week, two weeks i'd be concerned. i think you get a better chance to buy it lower. >> carl quintanilla on squawk will be live from the worldwide

developers conference. meantime, lionsgate shares having their worst day in five years. some investors losing faith in the studio behind "hunger games" and "die injuverge"divergent." we have an interview with the ceo. and whole foods crushing the stock of one of its suppliers. more "fast" straight ahead. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers

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lionsgate entertainment falling 12% after the company missed on earnings. the stock has dropped 30% since highs back in september but with upcoming projects in the pipeline, including next friday's season two premiere of "orange is the new black" can lionsgate get back on track. joining us is michael burns, vice chairman of lionsgate. >> nice to see you. >> investors and wall street analysts seem like they were caught off guard by the misses you posted. i'm wondering because it's funny a lot of the wall street analysts can explain away where the misses came from on the film side. it's just the lumpiness associated with box office when you have "divergent" versus

"twilight" and "hunger games" before and the tv some of the series was delivered in april as opposed to march but should you have communicated this to wall street better because a 12% decline in the stock, it indicates a surprise. >> this is really precisely the reason we don't give quarter to quarter guidance. we give three-year guidance, rolling guidance we actually increased to $1.2 billion to $1.3 billion over the next three years. i think it's a classic situation of where it's sell on the news. you were talking about that earlier. most of the time that this has happened we've seen an awful lot of volatility around earnings and usually our long-term shareholders do very well in a situation like this. so, again, we don't give quarter to quarter guidance. we hit the consensus for the year on an eps standpoint. some people were looking i guess for a higher number, higher forecast going forward, but we, again, we've had a history of conservatively guiding and that's exactly what we think we did today. >> even the three-year guidance, revenue is up 50% over that time

frame. you believe that that sticks with what you have done in the past and that is conservatively guide. that's a conservative guidance. >> i will say just take a look. we were at 900 a couple years, then up to $1 billion and today we went from $1 billion to $1.3 billion fiscal '15, '16, and '17. our story is pretty compelling. i can tell you that i had a conversation with our committee. i asked for the majority of my bonus for last year to be paid in stock and i think that's what's going to happen, but also john and i had a long-term plan and the long-term plan is to continue to invest in content, and if you believe content is getting more valuable and, again, between our, you know, 40-some television shows on the air, the franchises that we've built, the reboots that we think are going to come, we think we're in pretty good shape, and, again, you talk about a disaster today. the stock is down 11.5%, but again that's exactly where the stock was two weeks ago. >> that's a good point although

it was the worst drop in five years which is why investors got a little shaken by this. let's talk about what's in the pipeline. "divergent" was looked at as the next "hunger games." >> we feel very good about shailene woodley. we think her star is rising. we think it's going to have a similar trajectory to the "twilights" particularly international and "the hunger games." so again we think those next three movies in the "divergent" series will be a good uptick for us. >> beyond the film side, are there other opportunities in hef knew for this franchise which has been so powerful, for instance theme parks and other brand extensions? >> well, we just announced actually today that we're doing a mobile game which will be out in november for "hunger games." we think that's a chance to pick up a new revenue source there. we talked about a traveling

show. we think that the street is missing or some people on the street, not all of them, we think they're missing the long-term value and the ability to go back to the well, to so speak, on our intellectual property again and again in very different ways. >> so we've got to think beyond what can appear on the screen when it comes to what you own. >> we think, again, every day there's another platform on how we can take intellectual property that we own and exploit that around the globe whether it's a new platform. take a look, we have a new show that just got picked up, "deadbeat" on hulu. "nashville" got picked up by abc for its third season. >> michael, we have to leave it there. thanks so much for your time. >> nice to talk to you. >> michael burns, vice chairman of lionsgate. interesting point. it's recurring revenues. a series can air but there's

also syndication revenues down the road. >> michael has a great reputation of being a good operator in this field. it's held 24.5. if it breaks below that you might get a chance to buy it a little lower. but i think you have a stock that's off from 37.5, not a bad place to get in. >> content is king. 12 of the next 25 releases will be franchise releases. >> time now for pops and drops. big movers of the day. pop for target up . >> target put in a good week. no one is going crazy but a little reshuffling of managem t management. i think it looks interesting. >> big drop for twitter, down 4%. >> twitter down because their chief of engineering resigned yesterday. not that great. but if you like the stock, here is the day that you need to buy it or maybe monday morning. 30 bucks holds, you're going to be already. >> pop for the shack, up 4%. >> a monster move. actually that's exaggerated because when you look at the actual move itself not that big but a lot of folks are focusing

on upside call buying. when you look at that, i think a lot of that could be a cover for some shorts. i wouldn't read too much into it. >> u.s. steel a drop, 5%. >> we opened up the show with negative headlines on iron ore. steel files iron ore. >> some unusual activity because pete flagged some in metlife. >> the august 55 calls today. stocks hovering around that 200 day average. over 6500 a little later on. a lot of activity out there. certainly you want to keep your eye on it. >> former microsoft ceo steve ballmer cutting a deal to buy the clippers for $2 billion. it's sending one stock higher. we'll tell what you it is after this break. >> look what i just bought, look what i just bought! whoo! >> this is why we're so excited. the performance review.

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after reporting disappointing guidance, annie, blaming whole foods for cutting inventory. >> it's interesting. contrast this with hain, but they have diversified into walmart and other areas. the drop is a little deceiving because it did rally for the rest of the day. i think as long as it hold's today's low, you will be okay. >> shares of madison square garden are celebrating two victories. the new york rangers heading to the stanley cup. plus the los angeles clippers selling for a record $2 billion to steve ballmer. increasing the estimate value of the new york knickss. >> major on here.

congratulations to the rangers. if you look at what's going on in the nba and the imputed value of the msg frap ch gg franchise gone through the roof. the knicks were priced at $1.4 billion. if you're putting a 3.5 multiple and slightly north of that on the clippers, you take the knicks over $4 billion, you consider what's going on with the underlying franchise and with the rangers, this is extraordinary. the valuation here though not really that impressive if you think that there's that much value left in this franchise. stock only taking back where it lost off of its fiscal third quarter earnings. exciting times for ms g and everyone involved. >> valiant pharmaceuticals boosting its purchase price for allergan. >> the market seems to like both of them. if i were still in play, could you still continue to own them but at a certain point you have

to level off but i think you're still safe staying in these games. >> options activity indicating that somebody else will come in for allergan. >> there's been paper in there forever but when you look at this game right now, just absolutely crazy, and they keep talking about the fact they're undervalued. certainly the way things are trading in this most recent bid shows you they were undervalued. >> all right. time now for the final trade. let's go around the horn. tim. >> pull back in amx. place to buy the stock. >> it's time to get the junk out of your trunk and sell -- >> talk about your own trunk, brother. >> it does mean something else? >> i don't know. i'm asking. >> i'm simply -- >> don't ask me, mel. >> why ask me? >> grasso. >> lorillard, still buyable. still has much room to go to the upside. smoking them. >> pete najarian, party pete. >> we talked about unusual activity in metlife. you also see a single digit multiple on this when you look

at it forward and the stock is trading right near these levels of right around that 200 day moving average. i think it's going higher, i think it's breaking through. that's why we saw the option activi activity. >> we want to say a special thank you and farewell for now to our page victoria does done a spectacular job at "fast money." we wish you the best of luck in our next endeavor. there she is. yeah! that does it for us on "fast money." catch us back here at 5:00 p.m. eastern on monday. "options action" starts right after this break. have a great weekend. i make a lot of purchases for my business. and i get a lot in return with ink plus from chase like 60,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards even cash back. and my rewards points won't expire. so you can make owning business even more rewarding. ink from chase. so you can.

that corporate trial by fire when every slacker gets his due. and yet, there's someone around the office who hasn't had a performance review in a while. someone whose poor performance is slowing down the entire organization. i'm looking at you phone company dsl. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business.

this is "options action." tonight -- >> i can't do it. >> that's what gold investors are doing at bullion hits a four-month low, but believe it or not gold flashing a secret buy sign. we'll tell what you it is. plus, how high. ♪ how high >> no, not those guys. we're talking about bond prices which continue to go up. we'll give you the best way to cash in now. and tempted to buy apple ahead of next week's worldwide developers conference. >> i am. >> well, before you do, you have to see a shocking chart that tells you exactly what the stock does right after the apple ceo leaves the stage.

the action begins right now. from the nasdaq market site in times square, i'm melissa lee. these are the traders in new york and in austin, texas. another day, another record but beneath the calm surface some troubling signs in high growth land. check out twitter giving up most of this week's gains. wasn't alone. solar stocks like solar city also falling hard and check out sales force.com. the software company off by 3%. is this price action in response to a huge week or maybe it's a sign to sell. let's get in the money and find out. dan, what did you make of this action here? >> you know, it was very reminiscent of a lot of the action we saw in april and early may when the s&p was suge chugging along, we saw small caps act very poorly and then we saw this rolling sell-off in these high valuation sectors. it was solar, it was biotech, it was social media stocks, and it was 3-d printing. the s&p is sitting there again at an all-time high yet there's

a lot of weak action amongst those sectors. to me it was reminiscent of the price action when people were really scared about a month ago. >> also take a look at some of the big cap names that have been beat down. i'm thinking of apple for instance, mike. when apple turned, that's when the s&p turned as well even though apple got a nice price target hike by goldman. >> we obviously have expressed a lot of skep at thissism about the market. you could take a look at some of the sector that is underperformed like energy for example and materials which were the two worst performing sectors in the s&p yet still both are actually at pretty much all-time highs right here. i think the other thing we should be looking at though is the fact that volatility in all of these is at all-time lows. and that really is the opportunity. if you want to be a pollyanna and be glad about something, that's what we should be blood about because that's probably

where the opportunity is right now. if you were looking at the s&p, you could spend $5.50 to buy an at the money call. that's what you're risk from now until the end of december. i would take this as a phenomenal opportunity if i was going to continue to have any kind of a long position in the market to use that to do it. i have not sold any stocks up until now but i will tell you, i'm not committing any new money. >> what's important, of course, is today's action, these were the best performers on the week, and it just shows how tentative and skeptical people really are. you come up to friday and people say, listen, i got a nice bounce and i'm not going to hang around. big sell-offs in names that were big winners. >> all bounces weren't created equal. for everything that looks fantastic, in high valuation land, there was a couple things like priceline and netflix that blew the doors off. really eye popping things but then there's the sales force.coms, the amazons and a host of other that is really had anemic rallies. to me i think the lack of relative strength, the lack of

oomph, is really troubling to me. >> we're actually taking a look atc rm. >> i think it's an important one to look at. they reported earnings and on the surface everything looked pretty good. a well managed company in the forefront of a great secular trend within software in computing in general and today the stock opened up. 3% on a deal that they did with microsoft. it's a big partnership that they're launching into, and so this is the sort of stuff you'd want to see. what happened, it immediately got rejected. the first tick of the day was the high of the day. the stock closed down 3.5%. that sort of relative underperformance is what i think you want to lean on rather than trying to pick stops in strength. when you look at the chart, this is one of the worst charts i have ever seen. it's a textbook head and shoulders with 350 50 being a massive neckline. i think you want to press this sort of weakness. i think we have a chart, implied volatility, the price of options

versus realized volatility. actions are relatively cheap right here relative to how much the stock has been moving lately. >> you're taking advantage of that in your trade, just a very simple, straightforward trade. >> i want to look out to august, give this some time to play out and really today when the stock was about 5280 i bought the august 50 put. i paid $2 for that. above 50 i risk that $2 and between 48 and $50 i can lose up to $2 but below that i obviously have a lot of profit potential. like i said, implied volatility, i didn't spread this right out of the gate. if the stock moves toward my strike i will turn it into a vertical. >> how does that $48 level look to you? >> i know he's looking at it closely, the $45 level. there's a big gap and i know he's aware of that, and that's ultimately where it looks like this stock is going. good trade. put it on and press it. >> mike, i have a feeling you like this trade as well. you're like three peas in a pod when it comes to bears in

momentum names. >> that's what everybody should probably be worried about. one of the things that dan is doing here is actually in this name, he was talking about how expensive options are relative to how much the stock moves and in general the price of options has actually been incredibly low. kind of like rates and yields. this is one of those situations where you don't use spreads. you have to look at this as an opportunity to buy outright options and then you look into spreads as the underlying moves. i think that makes a lot of sense. what's interesting is next week is june. august actually isn't as far out as we might think. i wouldn't even mind going a little further out. the longer dated options tend to decay more slowly. >> i would make one last point. i'm not trying to pick a top. a couple weeks we said if this fails, jump into the spy. i'm not trying to do that just yet. the jury is still out. this could go up another 25, 50 points before it's all said and done. when a stock like crm cannot

rally on a week like this, this is the sort of action you have to jump all over. >> it did rally but it gave it back. >> what is the risk of the trade of technology going up -- >> really, of course, this gets down to cap weightings. it's so dominant by microsoft and oracle and apple, it's highly unlikely it will collapse. >> this is not a small company. it's a $32 milliond -- >> it still speaks to the issue of momentum. >> but those are not momentum stocks, microsoft and apple are dullards, they're practically utilities. they're not overpriced. and that's why. xlk is holding up so well. >> the ferocious rally in the bond market. the yield on the ten-year hitting its lowest level since last june. that gave a boost to rate sensitive stocks. the xlu which tracks utilities, the best performing sector this

week in the s&p. a staggering 20 puts traded for each call in the xlu today. nearly 130,000 puts traded on the xlu today. most of that activity centered around the $42 strike. so if option traders are betting against the sector, should you. carter has made it to the smart board. >> we know that utilities are the best performing sector today, best performing this week, best performing sector year-to-date up 14% crushing the s&p. the question is, is that likely to continue. let's look at a few charts and see if we can figure out together. here is basically the daily chart over the last year and a half. basically after a huge move off this low to the high of just a month or so ago, this is an 18% advance and we gave back exactly a third, and importantly guess where that stopped? right at this top. literally in the penny. meaning it found support where

it should. i want to look at longer term where we stopped before we sold off here. watch this. here is the five-year chart. well defined. since the bull market began. and we know that securities respond to trend lines, and that's just how it works. it's not because i say so. history tells us so, and we are likely to approach and even just get back to and exceed a little bit the top of the channel. it implies a move to around 46 would be roughly 10% from here. now, let's put the longer term picture. this is the s&p 500 utility sector and look at where we are meaning the action here right now, strength right here right now, implies a breakout above the 2000 top, the 2007 top. just a textbook convexntional by juncture. these are the sectors waiting in the s&p. there are ten that comprise the whole. utilities are right now at

roughly 3% whereas on average since 1990, utilities are roughly 3.75% of the s&p. so this would suggest that utilities to the rest of the market are underweight, and then one other thing that might be relevant, yields. these are bond proxies after all. the current yield on the sector is 3.65%. a ten-year treasury is 2.47%. that ratio is 1.43%. you're getting a lot of yield relative to what history says you should get out of utilities. this is a good place to be. and finally if there's ever a market sell-off, utilities act better than equities in general. >> carter, listen, we've done a million charts together when you look at those uptrends and to me you're trying to get maybe the last buck or two out of this amazing, amazing move. when you think about, it you look back, the prior high on the

xlu is 45. if this didn't have that yield, you would be looking to get in on the short side here -- >> i have to tell you -- >> it's all very subjective. you interpret it as a triple top and from my point of view it has epic breakout potential. >> a quick point, you were talking about the ratio of the yield in the utilities relative to longer term u.s. treasuries. i think it might be more informative at times to actually take a look at the spread in absolute terms and it probably doesn't look quite as dramatic in that sense. the only thing i like about xlu as a yield trade is it tends to be inflation ajudjusted. i'm kind of with dan in the sense i'm not really enthusiastic about trying to essentially short rates when they're already at epic lows which is i think is one of the things you're doing but you do have that inflation component but we do have something else. in the low rate environment, low

volatili volatility, we can still make a bed with carter without actually taking too much risk. >> walk us through the trade, mike. >> i'm just going to simply buy the december 43 calls. you can pay $1 for those. they're long dated, not decaying rapidly. if carter is right, you're obviously going to have a lot of potential upside and if he's wrong, you're not risking very much. for my perspective, the reason we'll do this trade is because the market is giving us an opportunity to do so and do it cheaply. >> got a question out there? send us a tweet @cnbcoptions. in addition to that, you will find great trader blogs, educational material and the hottest, juiciest options gossip. it will blow your mind. you want to check it out. here is what's coming up next. last four times apple has held its worldwide developers conference, something very strange has happened to the stock. >> i know it looks to you as if the same thing is happening again, but it isn't. >> we'll tell you what it is and how to profit. plus -- >> crack a whack. >> and so is gold this week, but

we'll tell yu a floor could be in store. that's when "options action" returns. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade.

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[ 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. who says sell in may? apple shares up over 7% this month but if history is any indication next week's wofldwide developer's conference could spell trouble for the stock. >> it's interesting. this is a name we've been -- the investment community has been infatuated with for ten years now, but since that september 2012 top above $700, i mean, sentiment has been getting worse and increasingly worse. we just had this shift right now. the stock is up 13% on the year. the company just made this acquisition for beats.

they're bringing some real creative talent and people seem really excited. i just wanted to take a quick look at how this stock over the last four years has traded into and out of the worldwide developer's conference because one of the things we all know is the company is highlighting their existing products, some new services, a lot of software offerings and in the past they have taken the opportunity to introduce some new hardware. okay. so let's just look at it. last year, june 2013, look at this, this is the ten days prior into the wwc. this is the day. the stock opened up, traded higher, and then it closed toward the lows. if we go back to june 2012. same chart. look at this. down 3% on the day, closed on the lows. look at this. june, 2011, same thing. it was trading up. as soon as tim cook or in the past steve jobs dropped that mike, all the anticipation, traders sold. there was a lot of pent up demand into the event and then it came right out of it. lastly, 2010. the same thing.

so really the way i'm thinking about it is this. the stock has run up about 8.5% over the last 11 or 12 trading days. it's at almost two-year highs here. and look at this. right up until this week implied volatility, the price of options was almosted a multiyear lows. this is demand. people were chasing the stock into the conference. so me i think you have potentially an opportunity that during this keynote address when tim cook is giving it, if they get towards the end of this thing and the stock is up and there's nothing new and exciting, i think you sell the stock. i think you could see that 2% to 3% which it's sold off basically from the highs during the conference for the last four years, but remember, people, that 7 for 1 stock split the following week, that's the thing that a lot of traders are trying to game. i don't think that's important but i think that's going to be the ultimate sell on the news. >> you're going to be watching this worldwide developer's conference on webcast or however you're watching it and as every minute goes by -- at what point

do you pull the trigger. >> it's a finger on the trigger trade. i would do it with options. it makes options a bit more expensive but i will look at the weeklies and look to buy something near the money, putting, and if that swoons 2%, 3%, you have to get out. it's just a quick day trade. >> you know, this is a very strong stock that is gapping up lately, and there's every indication it's going higher. i think there's a lot of momentum and fighting momentum like this is wrong-headed, but good luck for those who try. >> mike, dan makes a great point in terms of volatility being at multiyear lows. you can easily make a bet and not spend that much money. >> that's exactly right and that's what i think you should do. that's the opportunity is to use options because there's an old saying in trading and we've heard it a million times and it probably applies here, sell the news is what dan is talking about, but selling it on such a

strong stock might be risky. use the options to do it and you might be able to get some gearing on the downside. >> we're kind of in uncharted territory. everybody is looking back up at the 700 level. i think it's a difficult scenario to try to pick a top. i'm trying to identify a couple catalysts. i'm looking at the fact options are cheap and i will play it with defined risk. >> all right. coming up next, gold very close to giving up its gains for 2014. carter is long gold. we'll tell you why he's sticking with that trade when we come right back. stay tuned. ♪ [ 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.

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♪ ♪ ♪ [ 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. a brutal week for gold bugs as bullion hit a four-month low. this is particularly painful for cohen carter and here is why. an "options action" just because we risk less doesn't always mean we make more, and sadly that's just what happenedto their bet

on gold. >> we play it on the long side. >> all right mike said, let's try to strike it rich. but just 100 shares of the gold etf? come on, mike. you know that would set us back $13,000. mike stead bought the june 130 strike call for $3.50. now to make money he needs the gld to rise above $130 by more than the $3.50 he spent or above $133.50 by june expiration. but it gets better. because if the gld does rise, then that call will increase in value faster than the stock, meaning more cash in mike's pocket. translation, since he's spending less, mike can make even more. >> that's gold, jerry, gold! >> but actually it's a good thing he did spend less because the gld has plunged more than 6% since the time of the trade making this trade a loser.

and that leaves prospectors everywhere with just one more question. how will mike and carter fix their trade? before we answer that, perhaps this might make us feel better. had you bought 100 shares of gld at the time, you would be looking at a loss of 900 bucks. mike's call is basically wore it's but he's capped his losses at $345. carter, would you stay long? >> we do. we like gold. a tough week down 3% on the week and almost as cited here back to where it started on the year but the real issue is is the bottoming out action of the past two years legitimate or is it the stall before the next down leg. we think it is the former, it is bottoming out action and the presumption is you have an asymmetrical moment. not a lot of downside risk but upside potential. we would stay in the trade. >> mike, is carter using the royal "we" or would you agree? >> you know, i have never really

said that i was a big gold bug but i think the options markets give us a little bit of an opportunity here and i'm not the only one that's saying it. there was an institution long the july 29 calls. it looks like they rolled down to the 124s. on the june 130s we probably can't do that but we can go further out in time and get some lower strike calls and i think we probably will get an opportunity to either spread out or sell those at a profit if we get any move to the upside. >> i'm too dumb to know why anybody would own gold. i don't get it, but i'll just tell you this, you're talking about gld at $120. when you look at $1,200 in the commodity, i have to tell you, that is the multiyear low. that's that support that carter is talking about. i have to assume there are massive stops all over the place there. so this is not something i want to be long. >> on "mad money" tonight cramer is going for the gold with sage

kotsenburg. and the quoe of quintiles is joining jim. coming up, the final call from the options pits. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade.

i'm sage kotsenburg.

>> i got to say it, i still prefer the gld. stay tuned. "mad money" is coming up next. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats.

[ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. i feel for you. >> let's hear it, david. >> well, you did such a great job finding micron and then it doubled and then i thought it was good. i thought i could maybe take your advice for the summer and we're trying to get some young blood in at greenlight and i was wondering if you would wont to come intern for the summer. >> exactly what i have got, some young blood. >> call it the internship heard around the world. david einhorn offers regis an interpship fi internsh

internship. carter? >> utilities, be there. >> mike? >> d's 43 calls. >> that was the best "fast money" ever. sierra inputs. looks like our time has expired. i'm melissa lee. thanks for watching. check out the website and see you back here next friday 5:30 p.m. eastern time. have a great weged. my mission is simple. to make you money. i'm here to level the playing feel 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. my job is not just to teach but also to entertain and educate. so call me.