live on a friday night here in times square. dana over there, getting ready to go. here is what is coming up on options action. >> get back in there and sell, sell. >> that is what traders could be saying about sell because it is flashing a secret sell sign and we'll tell you what it is. looking to play catch up to stocks. and why now is a time to get in. and something trank happening with disney, apple and facebook. >> i'll give you a hint. >> no need for that, because our traders has figured it out and it could mean trouble for stocks. the action is happening right

now. >> great day for stock and if you've been sitting on the side lines it is time to catch you up. let's get into the money. and dan, which ones? >> this is google. and it had some disappointing earnings over the last few quarters that missed. but the stock is up 3.5% on the year and up less than the necklace and outperforming the s&p and a big component. over the last year it has under performed. the s&p is up 4.5% and it is only up 5%. and we know facebook is eating into the once monopoly and they have a lot of competition as far as social media and to me i think there is an interesting opportunity. google, there are a couple of things to look out. they have a new cfo that they guaranteed a $70 million pay package and she came from morgan

stanley and the sentiment will change as investors start to get focused on the potential for her to return the $70 billion in caps on the balance sheet to investors. and it reminds me of apple, the huge cash pile sitting there and it is burning a hole there, before apple went out on an epic, epic return. >> and mike is buttoned up tie. and what is the catalyst? >> they need to broughten out from search. they don't have that many other lines of business. apple, believe it or not, is more diversified than google. the one thing i would say, and dan pointed this out, they have a huge cash pile. and when you strip the cash out, the company is trading at a little less than 16 times earnings and that is a big discount to the broad market so to mee it seems like a safe play to lay low.

>> and what do you think about google and the cash play with it near all-time highs. >> i think google has lagged and with the earnings multiple there. analysts say maybe 10% growth this year but people are looking at it down here and 15% earnings growth and after you strip the cash out, if they can monetize that, the stock looks very attractive from a valuation standpoint and when you look at the movement in the stock, it looks like it is forming a base to break out and move to all-time highs. a little tick higher and i'm looking for a 555 print here. >> and dan what is your move here. >> and look at this chart and look at 580 and it has been at a level and hitting resistance and brian is talking about the next catalyst and the next cfo is coming and you look at them wanting to buck the trend and

you think you will see them focus on a return to cash and you want to set up owning calls for that july q2 report and the way to do is finance in the near return and the markets are not moving a whole heck of a lot and volatility and the price is low and without movement they will bleed. in the near term when the stock was 550 today, i sold the may 29th weekly 570 call at $2 and i used those proceeds to pay for the july 5, '70 call paying $11. that call calendar cost me $9. that is my maximum risk. what do i want to do on may 29th, i want the stock to move up to 570 and i know i'm threading the needle and then i look to turn into the calendar and look to turn it into a vertical. ab why am -- and why am i

choosing may 29th, a long memorial day weekend and if we have a move and things settle down into summer trading sort of stuff, i think that helps finance the purchase of the longer dated call there for the q2 event. >> and mike, what do you make of the trade? >> a lot of the calendar trades i haven't been crazy about because the price of the options are low but for google it makes sense because the options haven't fallen as much as the broad market so it makes sense. there is not a near term catalyst that would propel it through the strike since the first option so this is a good way to finance the longer data purchase. >> brian. >> there are interesting technicals, because if it is above 560, you cover that strike and ride out the long because we get a print like i talked about 550 to take it to another level and 560 is closing the short strike and play to the upside. but i like financing trades like

this because in a lot of way the option premiums play into your favor if we sit around through memorial day. >> do you need the market to go higher or is google a catch-up so whatever it is it will be okay? >> that is a good question. generally it is not a fantastic idea to pick a bunch of lag erts but they have double-digit expected sales and earning growth but if you get capital and some smart m&a and i think they should buy twitter and the stock will go up 10% and the combination of capital return and m&a and you have the stock back up in 2015. >> and oil rising alongside stock. and don is back up with this. >> this capped off the eighth straight week of gains something

that hasn't happened since february of 2013. off the lows of this year, not all energy companies have had this week, this week to date. cabot oil and gas and transocean both up 2% or more week to date. but this week at the soehn conference, they came under scrutiny by david einhorn and pine resources and eog, not on the same side of the discussion that he had and watch the frackers they had interesting weeks given the conference. >> dom chu, thank you for that. and we have to go to brian where he tracked oil and what is going on with the oviox and is there volatility in the oil. >> and when you see the

kmomidities -- commodities, and when you talk about the oil volatility index, it has volatility. when it broke above 28 and into the 50s, that was a extreme sphere, people were panicking and getting out of the oil and now it is looking to be trending back to 28. why is that significant? if we get less movement in the price of oil, the hedgers and the airlines, the petroleum makers and the hedges, they will know where to hedge them and that will put a bid behind the oil so i love seeing oil volatility to come off the highs to see a buyer there. but in $58, $58, we'll see if that will hold. >> and mike you're looking at an integrated in oil this week. >> don't feel like crude has a whole lot more legs.

i do feel like it will be is a bove $60 at the end of the year. we've seen eig sand devon and many have seen you'll see production and land drilling increases so we might stabilize and they have not dropped as much as elongated crude has. and so oil out to 2.85 and make a bet here. right when everybody is getting bullish on crude you should get nervous and people think you can produce at $65. and iran, if sanctions are lifted, that will put pressure on crude oily. >> do you like spending 235, dan, on this trade. >> it is meaty, but if it is running out of stream, the balance onyxon wasn't impressive off of the lows so if crude does go back down, crude could get

panicky and those that didn't proef duce might make sense and exxon is going up and you could reduce the premium at risk. >> and i think you make a good point. i expect it to trade $55, $56 and that would push exxon lower and at that point i would jump off. and we talk about oil volatility coming in and that will effect the individual names in the equity market and effect the premium options there and we could see some downward pressure on individual equities. as soon as you see that goes lower, i would jump out. wait for the move and then jump off. >> mike, is this something you put onyxon. >> this is the best way to play it because this is the most expensive of the stocks. like a royal dush shell would be

first on my list if i wasn't looking at exxon. >> i have a question out there. send a tweet. there is only one play to go. option actions at cnbc. it is like a fortune cookie specializing in derivatives and sign up for the news letter. here is what is coming up. what do disney, apple and facebook all have in common. they are all down since earnings and we'll tell you what that could mean for the market. and calling all options fans and live long and prosper and send us a tweet at options actions because if it is nice we'll read it later on in the show." options action "back after this. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series.

okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.

here at td ameritrade, they work wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this.

dan is noticing a troubling trend in disney, and apple. >> potentially trouble. when you listed those names. and you want to chaerter the -- charter the s&p. and it has come up to the 2100 level. you have the massive day today. you have the knee jerk and giveback of what we had earlier in the week. and what will breakout and the names you listed before, they have been leaders throughout this whole bull market. and in some ways they are like a teflon portfolio of some of the stocks and i want to look at some of them since they reported. apple here is up in the mid to high teens. it was up that way at a new

all-time high at the earnings. it was down about 5% since they reported earnings. and we'll notice a trend here. here is disney, the same thing. an all-time high. they sold off about 4.5%, 5% after the earnings. here is nike. it spent the last couple of weeks going down and then comes back. and then starbucks, the same thing. and other than apple, as far as the way consumers think about their products and apple fits into that. and what i say about the 5% average selloff about those four stocks, people are full up on these things. everybody knows the news is good so there was no increment alibier and you had some selling. and i want to juxtapose this against facebook. this was a huge gainer leading up to last year. look at the massive range this

has been in for ten months now. this made a new high and trading that way into the earnings report a couple of weeks ago and it sold off and now back into the big range. when we figure out what will cause the s&p to break out we want to see apple and disney and nike and starbucks get us there. but if they can't and showing waning momentum, i would be skeptical of a breakout in the s&p and that is my point because if they fall back in the trend like facebook we could lose the force men of the bull market. >> so you are using the charts to make a decision about the s&p which is it is in trouble. >> sand i would say it is not these guys. >> and i would push back, these ran into the earnings but the s&p is still close to the record highs and it doesn't look like it rolled over along with these

stocks. >> that is true. and one thing that he hasn't talked about and he's talking about multiples but if you go back to 1950 and if you look at how the s&p performed over a 90-day window it is up, believe it or not, because the market trends up, almost over 3% but when multiples get into the range where we are, 17.5 to 19.5 times earnings, the s&p's growth dropped by 33% and that is exactly when you will start seeing it, when the leaders in the market trading at the high multiples, people are trying to figure out, what is the next great thing that will come out of them and it is hard to figure out what that is. i don't think the market will roll over but the chance for sharp moves in the next 90 days are extremely limited. >> so dan and mark are siding with janel -- janet jellen. could we see new leadership

rolling in. >> i believe so. and i'm in your camp than they are. >> i'm not in any camp. >> i thought you were. but if you look at the growth names and maybe it is time for them to take us to the next level here. and i do want to touch on dan making some great points on the charts. the roll ore in the -- the roll over in the big names, post earnings, i look looking at the volatility and what is that telling us. i take a look at an apple vix and after earnings over the last couple of years, volatility plummets and that trades below 25, down to the 20 level. but the last earnings it hasn't broken 25 and it tells me that people are out there bidding up options and maybe putting on some hedges thinking that hey, we'll get another rollover in the big names that have done so well for so far and now it is

time to buy a hedge and look for the down side for apple. >> they say diamonds are a girl's best friend but they are trouble for one of our traders and find out why when we come back. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.

if you want to succeed in business, mistakes are a luxury you can't afford. that's why i recommend fast, reliable comcast business internet. they know what businesses need. and there's a no-mistake guarantee. if you don't like it, you have thirty days to call and get your money back. with comcast business internet, you literally can't mook a mistick. i meant to say that. switch today and get the no mistake guarantee. comcast business. built for business. here at td ameritrade, they work wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart,

plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this. a positive jobs number sent stocks soaring but that was bad news for dan. >> on options it is how we trade like superstars. and that is what dan tried to do with his debt on the dow diamonds. the diamonds were coming under pressure, just shorting the index could lead to big options and so dan bought for $2.65, to make money he needs dimes to fall below 1 pl $80 or below $177.35 and paying $2.65 to pay

against the market. >> i declare bankruptcy! >> so to cut cost he sold the strike put for 65 cents and created the put spread. here is how it works between the $2.65 he spent on buying the higher strike put and the 65 cents, he cut the cost down to $2 and now he can see the profit of the diamonds fall by the reduced cost of the trade or in this case below $1.78 by the expiration. that may be true but keep in mind there is a tradeoff. and by selling that put dan's cap is $178 and the diamonds are up sand that means the trade isn't so hot and now what will dan do now? >> and so let's answer that? what will you do now? >> we put this trade on a few

days before q1 earnings and this was cheap and near the money protection in large cap stocks in multi-nationals that i thought if there was a dan draft it would be in this stock. as of wednesday this was a winner here. and this is again, what do you do a trade like this before, if it is protection against a large cap portfolio. you still have another week. i think the 180 puts is the only thing you have to worry about over the next week. they were offered 60 septembers and you paid two for -- 60 cents and you paid two for the spread and you have to think about how much money you want to recoup. >> and dan, showing the roll over and the kept stocks and the potential, do you think this was ill timed? would now be the time to put on a trade like that. >> this isn't saying the stock

will go lower but a quick point about put spreads, these are trades you want to adjust because what will happen is the two options, the decay rate at the money will accelerate to the other so you do want to adjust the trades to take advantage of the benefits. >> brian? >> i'm out there looking for hygiene strategies myself and with volatility and fear this low it seems to make sense to roll this over and look a few more weeks out and put on another put spread. it makes sense. the down side put when you go even further out in terms of expiration is relatively high so you can sell a down side put and capture premium there and that is why they are so cheap to buy and it makes sense. if you are long in the market stay long and with the beta, buying a put makes sense. >> coming up next, put your hands in your pocket and send us some tweets.

we'll answer after the break. i'e trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.

here at td ameritrade, they work wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade.

you got this. let's take a tweet. md asks what do you think about getting long on amazon now. >> dan, you take it. >> this stock has had a massive runoff in the 52 week lows and went up to 450 and it looks like it was back to 400. they will continue to get the lenk leverage out of the investment and i think you have to wait for a pull back to 400. it is not my bag here but i think you may want to look to devine your risk. pay spreads. >> and matteo has a question. stones or beatles. mike? >> rolling stones all of the way. >> i would go with stones too on that one. >> dan nathan. >> stones all of the way. >> stones all of the way. clean sweep, matteo. >> and mike carp from miami. >> i would say selson and covers

apples. >> good to have you. >> google call spread, the leader for the next few weeks. >> i'm with ryan, 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 i'm just trying to make you a little money. my job is not just to entertain you but educate you. call me at 1-800-743-cnbc or tweet me @jimcramer. today we saw what it looks like when everything goes right. like i told you in last week's game planf