we are we are live as the nasdaq markers. wager of a weekend. carter and the rest of the gang are getting ready. here's what else is coming up. >> that the only thing we have to fear is fear itself. >> well, maybe not fdr because a collapse would be signaling trouble for stocks. we'll tell you how to protect yourself. plus it's the one retailer that benefits from higher gas costs. >> please tell me. >> we will. you'll be shocked. talk about a heist. carter made a killing on

financials and find a way to find even more. the action starts now. quiet day for stock s unless talking about apple. 3% on the week. big moves higher for the tech giant s. apple going to break s&p 500 out of fight trading range? let's get to money and find out. doesn't seem like there's catalyst here for this move. >> i think people are looking to worldwide conference in early june. iphone sales remain strong. i think this is one of the situations also we're going into a season when of all spaces that typically do well, you often see technology stocks do well. this is one of the few technology stocks you can look too to in evaluations in terms of market cap, when you look how much it earns remain silent i-- earns, it's not fundamental. yesterday raising estimates

on the iphone as well as the watch. the upcycle, there's a base of users that have not upgraded to iphone 6. >> a lot of action out there. when you look at option pricing in apple, look at this. you've seen a huge drop in last few days. that's translated to bullish upmove in stock. i love seeing that uptrend of volatility breaking. that's bullish of any asset class. that could push apple higher. >> what a do you think carter? >> the price today is exactly the same as three months ago. it's tight in range. the way it acts, we think it will get out of the range and move up. that's a good thing if you own apple. >> if you are lone apple, what is going --

>> the iphone 6s. they've already begun to talk about when that will be released. that's potential catalyst. the watch is interesting. i didn't think initially this could be that big material mover for stock. one of the things i do end up going to apple store as often as i go to anywhere else. >> do you go there to look at watches? >> not to look at watches. i lost the charger to my i mac or something. it is amazing to me. if you get to the apple store before they open, it is the one store out which to this very day there's always a long line. i live in austin. i can go through the mall and before the store opens, there's a line to get into the store. you see the whole staff queuing up. i think it's amazing with a company this mature, products this saturated that demand runs

so high people are queuing up even now. >> let's got charts carter. >> there's a news follows price leads. let's look at price of charts and figure how this gets resolved. we think up. we've got a nice trend line. if you want to see it, draw the lines, right? we know you've bounced off the line over and over. the presumption is we're about to bounce again. you get these nice moves. no trend, trend, presumption is up and out. now, i want to study this tight action here. so the next chart is a more short term chart. we're literally the same price we were exactly three months ago. late february, late may. equal lib rum, draw the lines like that. we think it gets resolved like that. here's the chart without the lines. draw like this flat top sending bottom tos. we think gets resolved like that.

buyers here, up and out. should be 5-6% move. >> wow. up and out. >> brian thinks options is relatively low. i will say for stock to move to upside, talking increase in evaluation that dwarves good percentage of s&p. i'm looking to specific july 135-140 call spread. i could buy and sell against 135. i'm spending $1.55. we're looking at 8% in increase to get apple value. think about what that means. i think it's okay to make a bullish bet. i don't think you need to go out and make calls. for stock to go up 10 to 15% i don't think we'll see this time to july. >> it's tough for that stock to

go up and raise to upside. there certainly may be upside move. i expect it to be slow hof imov. you say hey a, at this level of evaluation, i need to be at the level of stock. it's not getting that price. that's a great way to play, cheap way to play apple to the upside if you think evaluations may be high. smart way to stock replace so to speak. >> button this first. you think apple will go hire. what does that mean for s&p 500 or nasdaq? >> it's a big stock, bigger than three. i don't think it means the market is going higher in some way. i think you have a cheap stock delivering better results on the market. apple looks higher. >> talk about a fearless. breaking through 12 and hitting year to date low. giving how little moving, should

it be lower? what do you think? today is tricky because it's the day before a three day weekend. >> yes. typically traders take out option price and take out the time value. you'll typically see the vix fall. what's been happening is upside call buying in vix option expiring in three weeks. look at june 17, june 20 calls. june 18 we saw 170 calls bought. tremendous side to open interest. vix down at 12, markets at highs. finding a way to hedge portfolio if we have a summer draw back in the market. >> or something happens the next fed meeting. >> i think that's exactly right. look at where the vix has been bid. everybody has dismissed the idea

there would be a rate hike in june. what's the sensible way to hedge that? you know where else you see a bid in vix figures? september and december. look at that structure, basically the same pattern is exhibited. i think what's going on is people who are alone in the market are looking for hedges, pointing specifically to catalysts you're talking about and buying themselves hedge in case they get something early. >> is vix broken? has it helped anyone do anything would you say in many months except dig down and look -- >> you question his -- >> no. no. >> you have expertise in bio tech. >> i fix on a lot of things. vix is sort of broken in the sense the vix itself is a calculation. it doesn't consider time and dei day that happens to option prices. doesn't consider real movement in the market. in that sense, it doesn't tell you what the market is doing.

it's a forward away to look t at how to price things. it's a way to price fear. there's various other instruments to use to trade volatility and hedge. we do that with our fund. >> for protection, what's the trade? >> for protection, what i've been looking at basically -- i always look for cheapest way to find that protection. go look at june 30 date and options in the spy. this is expiring end of june. they're going out in a month. i'd be looking to buy june 2007 put for $1.55 while selling june 6 put $1.35. i've only spent 20 cents. people say 1 dollars put, what are you doing? i'm risking 20 cents. it's a cheap way if the market drops 20%. i'm going to get back $100. this is cheap way to hedge out portfolio and get a nice payout.

>> that's a good risk. those are things we like to look for in put spreads. what you paver sus what the thing might be worth. you say why only a dollar? if you get four to one payoff, you buy as many as you need to hedge for the move you'll get. this makes sense. when volatility stays low, it may stay low a while. >> carter, you ask this question in an appointed way. does vix help at all? >> never. it's derived from price ultimately. why not stick with the primary source? if you're looking at the s&p 500 in the way we are at vix. it's been range bound. vix futures tell us it will likely remain range bound little later. expect volatility higher late per the year. q 3, q 4 the market is expecting

zblcht got a question, send us a tweet. if it's mean, we'll ignore it. if it's sweet, we'll read on tv. options actions..com. what are you waiting for? here's what's coming up. cohen and carter nearly double in less than two months and have a way to make more. they'll show you how. oil is surging. that could be good news for one large retailer. we'll tell you which one and how to profit when options action returns. if here at td ameritrade, they work hard. 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.

ahh... steve, other than making me move stuff, ces. 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. . welcome back to . welcome back to "options action." put it on the record books. oil closed lower on the day but not enough to kill the winning streak. this mark as the longest streak of weekly gains on record going all the way back 32 years. that's how long these performance numbers have been tracked. w 2 i crew down one barrel to $59.72. some pointed to strength of the u.s. dollar as well as profit taking a ahead of the long memorial day weekend. crude oil off times moves in the opposite direction of a dollar value because oil and other commodities are priced in

dollars. as dollars become more expensive, it's more expensive for non dollar buyers to convert oil. in the latest dat a at that from oil service companies, baker hughes fell by one to 659. the rig count the did fall. it may indicate industry may be stabilizing for now. back to you melissa. >> don and carter is looking at retail a their sales gas. what is it? >> costco very big name. what i have to start is chart since the bull market began. it's up four fold. it's crushed the market. we're in the middle of the channel. i want to study this recent dip and tell you what i think is coming. here is the past year or two. what we moe is we have a powerful advance up a 45 a to

50%. this pull back of 10%. these lines i've drawn here -- this is what's important. we're up $45 a from this period over 11 months. we've pulled back a 15. there's a ratio which is to say we've retraced 33% of the advance. there's nothing random. where we started to stop is exactly the average. presumption is this decline leaves us at a level of support where rebound potential is high. we like costco for a bounce off the trend line going into earnings. >> mike, this lines up with what you're seeing with your little known stock indicator known as your credit card bill. >> yes, my credit card bill. if i look at the household where we spend our money, it's apple, cos costco. there's not a place to get

single digit bottom line growth. they're immune to gasoline volatility than a lot of other retailers. they're a gasoline retailer themselves. what a happens, is consumer gos to cost when gasoline gets high. that's one of the advantages of being a gasoline retail area. you get a bump in volatility. i'm going to look to the call spread to make my bullish bet. june 1.a -- $1.55. you would think retail would be a strong place to be during summer months. technology and health care tend to outperform. this is a hedge bet. >> do you like costco or this trade? >> you like costco. i don't love it from a fundamental standpoint. look at estimates in growth 10%

in coming years, 8% in coming quarter. i'd be leery how costco can possibly go. names like price line i like playing as long as oil prices stay cheap and don't explode to upside as well. i think there's other ways to play. this is a nice call spread playing slight play to upside maybe get bling on charts and get bang for your buck. >> questioning chart blt. >> it's only fair if i don't use the vix. >> payback. >> right. no. obviously so there's discretionary element to this. there's a big staples element. there's a lot of groceries and gas, that kind of thing. it's not as sort of cynical as a -- >> compare to wal-mart. compare to target. if you take a look at it fundamentally, it's growing far better than the other two. if you're in a space, better off

in this one. >> good debate. talk about money in the banks. carter and cohen made a killing on financials and have a way to make more cash right after this. here at td ameritrade, they work hard. 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. dovisit tripadvisor new york. tripadvisor not only has millions of real traveler's reviews and opinions, but checks hundreds of websites,

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ahh... steve, other than making me move stuff, ces. 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. my daughter.door there's a scientific genius at work... it all started when she got a dell 2-in-1. it's a tablet when you want it and a laptop when you need it. dell 2-in-1s with intel inside have everything you need to learn and do just about anything. whoah! genius. like father, like daughter. dell inspiron 2-in-1s. starting at $379.99. buy select pcs for $699.99 or more and get a free 32" tv. ♪

on on "option actions." carter thought the financials were about to take off. just buying etf. >> as if. >> after all 100 shares could set you back 2 grand. both said the july strike call for 25 ascents. now to make money, mike needs it to rise more than the cost of the trade or in this case above 2525 above expectation. >> praise the lord. >> but it gets even better. that's because if xlf does rise, calls increase in value faster than etf meaning more money in mike's pocket. rally are up 3% meaning this

trade is a solid winner. bankers all over the world are tuned in to "options action." they have one question? what will cohen and carter do now? >> start off with carter. do you like the banks? >> it's done -- we would like this to stay. >> it's called i want more cash. what are you going to do? >> stay in this trade and look for opportunity to spread it. wait until you collect meaningful premium. we're not there yet. one of the big reasons for rally in financial is speculation of rising rates improving that margin among other things. that's the standard line on this. basically, we're looking for that at the end of the year. we should sit tight on this trade. >> you're on the same page

pretty much. you like jpmorgan. >> that's already a winner winner chicken dinner. that's a nice play for you. i think jpmorgan is a name you want to stick with in the financials. when correlations are as low as they are, try to find the winners. those will outperform. the rest of the market lags, stays stagnant or back and forth. when you look at banks and apple we talked about early ir. those are names you want to make. >> when buying calls or call spreads, you're making implicitly hedged bet to the upside. you're risking little thoegs to the upvalue. we're risking 1% to make the bullish bet. there's no harm staying with it. >> when you look at s&p 500 financials, where do you see the most strength? regional banks? >> it's starting -- whether

there was original leadership -- it's spilling over to not necessarily bank of america which has been certain big insurance stocks are not acting well. importantly you have online brokers, traditional brokers, regional banks, money center banks and other center stocks coming to life collectively. >> a lot of financials were among the cheapest stocks you could buy. black stone was a good example. they have potential deals going on in the energy patch. these companies are poised to do well. they're cheap, poised to do well. good combination. >> next, reach into the pocket, send us a tweet. we'll read it. stay tuned. the "final call" is soon. here at td ameritrade, they work hard. 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. he can not see through doors. his speed, anything but superhuman. but when it comes to health care options, george found helpful information and resources at aarphealth.com this makes him feel unstoppable. well, almost unstoppable. discover real possibilities at aarphealth.com today and tomorrow take on the world.

ahh... steve, other than making me move stuff, ces. 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. let's take let's take a tweet. the tweet is i have june 113 home depot call. should i hang in there or pull the plug? you had a trade on hd.

>> yes. we wish we had "options action" every day. the time was when stock ripped to 116. make that longer and push that further out and maybe go for call spread. >> if you can push the time out, the pattern is intact. we think it goes higher. >> hd or lowe's? >> i would go hd. hang in there, push the calls out later. watch the ten year note. i think if interest rates start to tick up. that should have a negative impact on home depot. i'm short futures. i think you've got to watch that. trade 225 could trade up to 260 on the ten year interest rate. that may negatively impact home depot. time for the "final call." >> choose one choose both. >> use call spreads to make bets in both of those. >> good to see you once again. thank you. >> thank you melissa.

have a great memorial day weekend. i would go with apple call spread too. i think apple is ready to break out at all time highs. >> our time has expired. thanks for watching. for more "options action" check out the website. have a safe, fun, memorial day weekend. >> announcer: the following is a paid presentation for luminess air. >> people have said to me, "you look amazing. what have you done?" >> people ask me if i've had a face-lift. >> people asked if i got botox. >> announcer: these women all switched to a new foundation. >> people come up to me and say, "your skin is beautiful." >> announcer: it's not a skin-care lotion or potion. it's not even plastic surgery. >> i will have people say, "what are you doing? you look younger." >> announcer: it's a huge leap forward in makeup technology. >> this is what i used to look like 10 years ago. >> announcer: and it can help you look 10 years younger instantly. >> i've had two people actually tell me it looks like i have porcelain skin. >> announcer: it's the airbrush