exploding from this. this is unbelievable. these are bright guys right here. you know, the think about head and shoulders tops, and i think dan makes a great point and mike talked about it as well, you don't know until it happens, right? so you have to sort of draw a line in the sand at some point. the fact they priced it 242 and it held there to me is pretty interesting. yes, you've got the benefit of a decent tape today and yes elon musk bought a portion of it which i think gave people some sort of hope and encouragement, but 225 is the ultimate line in the sand through there, then 180 comes back in play. >> levels dan picked here make a lot of sense. what you're hoping for if you're going long the stock is it's going to break out to new highs. i think that's the reason you're looking to that up side call. to the down side this is where the stock has found some support historically. it's a pretty meaningful discount on a valuation basis to take it down 20% from the current levels. when i take a look at this i think it makes a lot of sense. >> what is your concern if any about going to january?

by then we theoretically will have the -- we will have whether or not they meet guidance for the year, which they've already lowered. >> yeah. so here's the thing. if there's any production issues and we know -- they're producing two cars now. okay? they have a giga factory they're building out and the stationary storage. they have a lot of balls in the air for the first time in a long time and i think you're going to know by the fall whether they are executing on multiple fronts very well. >> we've got some breaking news here on kkr. let's get to cnbc's kate kelly in the newsroom. kate. >> hey, melissa. interesting news here break just out in the "wall street journal" in fact within the last hour. sampson resources which at the time in 2011 that it was taken private that an lbo by a kkr and others, the largest, lbo, $2.7 $7.2 billion, planning to file for bankruptcy in mid-september, according to the journal. i just spoke to kkr. they're declining to comment so far. but this could be the first in a wave of bankruptcies that we see in the coming six months or a year, melissa, as companies struggle with a cheap flat price

for oil and also natural gas in which sampson was a key player. >> walmart, home depot, target, lows, to name a few. what do you expect in this space, given we just got retail sales for june. july was revised higher. >> we have a secular shift that is going on. and i'm not that enthusiastic about the targets and especially the walmarts of the world when you take a look at it. let's look at walmart specifically. here you have a name that is growing, essentially at 1% to 2% in terms of revenues each year. that's less than the economy is growing. in notional terms, it may seem okay. the fact of the matter is they're actually shrinking in real terms. the exact same time frame you've got amazon which is still experiencing double-digit top line growth. this is ultimately where the

pressure's going to be. it's the same story we've been saying for the last five years. bricks and mortar versus online sales. i think they're going to ultimately end up being the loser. >> target was interesting. that was the clear winner up until the last month or so and now target appears to be rolling over as well. function of the entire space and maybe people taking profits out of tgt. if you ask me to play the game we often play -- >> would you rather. >> would i rather walmart or target? i'd still rather target. but the fact it's rolling over concerns me. but given the choice between the two. >> i'm going to throw another name in there. costco is interesting. went down to 135. consolidate add round 145. i know mike has a different stance on walmart. costco looks like it's setting up okay into a sort of back to school sort of selling season. >> i would just quickly say on costco, this one passes what i call the holly test. i look at what shows up on my american express card bill. that's a number that keeps -- >> not anymore, american express. >> well, that's american express' fault for having lost that relationship. but as i take a look at this, we've got walmart reporting

soon. a simple way to press a bearish bet. and that's really what you're doing here. the stock's down 20% on the year. just to look out and simply look at the october 72 1/2, 67 1/2 put spread, you can spend about $1.60 to put that trade on. again this is one of those situations trading just under 15 times next moss earnings. if you want to make a bearish bet -- >> might want to as a dozen flowers to that bill after that holly. you spend money just like she does i'm sure. right or wrong? holly, i'm on your team right there. >> guy. >> yes. >> walmart, do you like his bearish bet? >> i think he's been spot on. the stock has not been able to rally on what has been until recently an up tape. if you ask yourself it can't rally when the tape is in its favor when is it going to rally? >> i'm going to take the other side and we're going to -- >> you want to -- >> well, mike and i go way back here. when i look at the long-term chart of walmart, 70 is a massive level. the stock closed today at 72.38. if it can hold 70 you have a

push back to 80 in the fall. i'm going to go with an extra trade here. the october 70 call offered at 3.70. 2.50 or so in the money right here. that looks like a good way to make a defined risk back to the upside. >> this thing has not shown any real signs of support the way i look at it. the thing is trading straight down. and their competition in the online space is going straight up and that is telling you pretty much everything you need to know. >> i like how guy joins the set here, he gives us his advice on stocks, marriaged a vice. >> i just want to help the brother out. he's traversing the -- i just saw him in new york. now he's here. it's nuts. buy some flowers, you're off the hook for the weekend. >> got a question out there? marriage advice question? send it to me @optionsaction. check out the website optionsaction.cnbc.com. we've got the hottest options news and videos throughout the week as well as exclusive trades. check it out. here's what else is coming up. >> they've got the golden

arches. mine is the golden arcs. >> and now shake shack has options but that may not be a good thing for the stock. we'll explain what it is that has some traders feeling indigestion. this woman has a stern message for twitter shareholders. and she'll reveal it when "options action" returns. 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.

the moment foods and options fans have been waiting for. traders were less excited about the calls and puts for shake shack, just under 1800 contracts traded today. why do you think so few. >> i think the primary reason is we see the spreads are pretty wide and i think a lot of people uninitiated about options are going to see the prices and find them confusing and the reason they're confusing, this stock is hard to borrow. there's a small float a high short. what that means is when people want to short the stock you've got to pay up to do that and so option prices are going to reflect that and actually you can look at options prices and it is suggesting shake shack has a $47 stock come january. so i think when you take -- and you know, you look at the options prices there people are, they're saying i have a hard time figuring out the price. >> some of the enthusiasm about the stock that we've seen this year, you know, kind of carried forward today on the first day. call volume was more than 2 1/2 times that of puts and nine of the most active strikes were all

calls too. i think that some investors are looking for ways to define their risk but i think the main point here very simply is that the spreads are really wide the prices of options are expensive here. i think you need to see marketmakers settle in here and -- >> but you hit on exactly the right point which is that if you are really inclined to get long shake shack at this point i don't think you want to buy the stock. want to use the options because the calls are cheap relative to the puts. because of that dynamic we just discussed. and you're limiting your risk. you know how much you're putting out there. go out and get the lockhart link burger at the shake shack in austin. i'm telling you it's one of the best sandwiches i've ever had. and then buy calls if you want to be long the stock. but i personally would not be. the options market is telling you this stock is going -- >> i wouldn't recommend that burger for you, guy. >> my constitution i would not do well. especially with the fact i've got to get on a plane and fly for 5 1/2 hours. i have a comment and i a question. my comment is mcdonald's has been trading well. got to give tim seymour credit, i think dan mentioned it last night. the fact it continues around

this $100 level where it's had trouble the last three years maybe they finally figured it out number one. number two, a question for the esteemed panel on o.a. will the fact options take the volatility out of the underlying stock, will we no longer see the crazy fluctuations in price? >> kuo can handle that question. >> i have an answer for you. we can look at almost every other t ipo that has taken place. what has happened after options started trading was we saw the volatility started to go down. and i think that's exactly what we're going to see happen here as well. >> another way to think about it is if you do own the stock and you're looking to add some income you could sell calls against it. the stock is not likely to go back up to 100 anytime soon. you could use the opportunity to sell short gaining calls, add some yield to that position. >> coming up next twitter shares getting a boost today on hopes of new leadership. kara swisher in her "options action" debut will tell us if she thinks should take the top spot when we come back. 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.

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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.

welcome back to "options action" call to the west. we're out here in beautiful san francisco just blocks away from twitter's headquarters. and today shares of the social giant got a nice pop amid whispers that the company's search for a new ceo could soon be coming to an end. here's what suntrust robinson analyst bob peck said today on the halftime report. >> we think it will be this triumvirate structure with jack dorsey as ceo while probably still being ceo over at square. adam bain as president. and ed williams as chairman of the board. we originally targeted right after labor day and then we heard it was speeding up the process and so it could happen as early as next week now. >> so is twitter about to make a move? and who might top that list?

kara swisher is the co-executive editor of re/code. she joins us here in her "options action" debut. hello, how are you doing? >> welcome to sunny san francisco. i wanted to dress the part for you. >> and you are dressed appropriately. to the nines in fact. >> yes. >> in terms of you who think is tops on the list. there is probably jack dorsey. >> yeah. it's interesting. i would think a company should have 100% of a ceo. that's just my -- it's a public company. square has filed to go public, or is filing to do that. and i would assume if you're a shareholder you wouldn't want a 50% ceo. that would be an issue. i think henry blodgett brought that up. it's a super fair point. that said, he's the founder. he's a product visionary. you know, he's got the support of the board in many ways. and so we'll have to see. i don't think it's imminent. >> you had chris sacka on, the great interview on decode radio the other day. he basically was saying what bob peck was saying today. and what he thinks. and he thinks that it should have this grouping. but you seem to disagree here.

>> i think it's not a bad idea. it's just whether it's going to actually happen. i don't like to declare things without -- i'm not clear if that's actually what's going to happen. >> quick question. sacca has tremendous command over the story right now. is he going to be on the board when costolo is out? and the board shake-up. that would be a great idea. >> i don't think so. >> i think that interview angered people at twitter. i think he definitely knows how to push their buttons. he doesn't call himself an activist shareholder, but that's precisely what he is. >> isn't 50% of a visionary better than 100% of a manager for twitter at this point? i mean, take a look at apple post steve jobs. >> they had 100% of steve jobs if i recall. >> they did have 100% of him. but i could easily imagine them getting 100% of jack back after the square ipo. so to me i'd rather have 50% of the visionary at this point because it seems like they've got zero guidance as far as that is concerned. >> it's a silicon valley myth the founder coming back and saving things. it's only happened really once

and it's steve jobs. i think jack dorsey's really talented and stuff like that. but it's really -- it's a myth that is not necessarily workable all the time. jerry yang came back to yahoo! that didn't work out so well for yahoo! and for him. >> and he did have the alibaba -- he saved the company. >> that was jerry semel. >> a lot of people did. he's a great person. but was he the right ceo? i think they fall in love with this idea of the founder ceo. now, jack was forced out before for evan williams, who's now going to work with him. and twitter is such a dramatic -- it's like a soap opera in a lot of ways. it will be interesting. them working together within will be interesting. and adam bain, i have nothing but great regard for. he's a really top executive there. >> we were just talking to roger mcnamee of elevation. he was saying they're one night's sleep away from make the right decision and turn things around and that would be if they turned twitter just from a straw for information for data into a firehose. >> yeah, he said that.

he told me. >> i'm just wondering what your thoughts on that are. >> there's a lot of direction that could go with twitter. i personally think it could be sold through a bigger company. my feeling is -- i know they say it reaches all these people and it could be a great advertising medium. but seems like attaching itself to a larger steam engine, whatever, like a google or something just makes more sense. it would work better. that said, you lose the innovation. >> it seems so obvious to me. that conclusion. but yet your reporting has said that google is not going to do this. it just seems so odd. when you think about it, though, when what's app was purchased for $22 billion twitter has an enterprise value of $17.5 billion and to me it's got to be the most scarce social media and mobile messaging property on the planet right now. >> i think this is a larry page call and of course now he's running alphabet. so it's whose call is it now within google who would buy this thing? and where would it go? probably under sundar pichai's area. and they've been terrible in social. it's real-time social. it's news. it's advertising. i always thought that was the

natural -- but there are others. alibaba, 10 cent, microsoft, apple. you can go through a zillion -- facebook. which also doesn't seem interested at this point. i don't know. >> kara, thanks so much for coming by. >> thank you. >> appreciate it. >> you must acquiesce to the ray-bans. well, i hope you'll be back. >> we'll be back. >> coming up next your tweets and the final call from the options pits. much more from san francisco when we come right back. stay tuned. 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. i'm here at the td ameritrade 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.

lowe's or home depot, which do you play on? this is the mashup tonight. what would you do? >> i would rather lows. lows is about a turn and a half cheaperment they have the same effective growth rate, they'll be announcing earnings. their options are more expensive at this point. you could take advantage of that by getting into the trade with something like a buy rate or -- >> hope depot makes me nervous. reminds me of a crowded trade like disney was last week into its earnings report. i'm not a buyer. >> time for the final call. we'll go to our special guest here. >> oh. you're coming to me. >> guy adami. >> walmart reports on the 18th. mike is -- i've got to tell you something. always spot on. love dan. but mike, the quiet man, is always right. so i think this negative call on walmart might come home to roost next week. >> the quiet trade. the way to play is a put spread. 67 1/2. >> we'll end it with dan. >> twitter -- or excuse me, tesla, i'm not a buyer here but

i think you look at risk reversals for stock replacement. >> looks like our time has expired. i'm melissa lee. thanks so much for watching. for more "options action" check out the website. we'll see you back not here but friday, 5:30 p.m. eastern. >> announcer: the following is a paid advertisement for omax3, brought to you by prevention pharmaceuticals. today on "medical discoveries," you'll find out why you should stop taking your store-bought fish oil. doctors everywhere are recommending americans take fish oils daily because over 8,000 clinical trials support what have been called miraculous health benefits. so, why aren't you seeing the benefits from your store-bought fish oil? coming up, you'll discover the truth about potency, purity, and the missing-link ratio between epa and dha that researchers affiliated with yale university have discovered, which is the key to unlocking all of the health benefits of omega-3 fish oil. you'll also be introduced to a specific formula called omax3 ultra-pure, used by pro