now a throw-back trying to repair itself. the throw-back after that much damage typically counters

overrun. >> now let's get to the yield on the ten-year, which actually hit a one-month high. soaring as investors sell bonds presumably to buy stocks. the move may be a little overdone at least according to the chart master. carter what are you looking at? >> it does seem overdone. let's see if we can get some charts up and figure it out. look at tlt as the trade. this is ten-year yields basically over the past year. we know for the most part we were basing this range of call 2 to $2.50. plunging of china syndrome, if you will, whatever it was, now when you throw back like this, you start to get back to where all of the memory is. so we're back to a fairly difficult level. sorry, there's that chart. now this. so here is our range. what we know is that this point here, from our lull of 152, high, tart of the year at 323,

we've thrown back almost to the halfway point at 198. that's a very difficult juncture. again, where the overt supply is and also a huge group 1522%. here what is i'm going to make a bet on. tlt is reciprocal. we've kind of checked back here to the point at which we broke out. you can draw the lines this way and play for a rebound or you could draw them this way. but this is a big standoff. it's back to the top from which we broke out. my thinking is here that this is going to get resolved up, which is to say that yields having moved almost to 2% are going to fall back. >> all right. mike, what's your take on this? >> we have a little bit of a situation here. there's really a bifurcation between what's going on here and what's going on in europe. it seems right now like the market is not pricing in any kind of a rate increase. that would be consistent with his point of view. the flip side of that is labor

markets are extremely strong. for those of you who have exposure essentially here and you might be inclined to basically bet on falling yields, rising tlt, i think what you want to do is hedge that position. the way i would do that is by buying a put spread so you maintain that long position. specifically the mai 127 put spread, buy for 310 and sell 120s at 0.70. what you're going to notice is basically that lower level we saw in tlt if we do see rates go higher. i think right now it could break either way frankly. u.s. market, i know everybody on this desk maybe and on the desk that was here before have had a lot of fairly skeptical things to say about the market. if you're wrong about that, rates are actually going to go higher. >> walk us through. >> yeah, i mean, so again may 127, 120 put spread, buy 127 for 310, sell for $0.70.

>> we know what they are pricing in for hike is all over the place, moved dramatically after the jobs number you mentioned in february. there's probably some low probability trades with high potential payouts if for any reason the fed were to surprise. more hawkish next week. your trade obviously covers that. you'll see tlt flatten. it will go to low 120s so quickly if they basically intimate they are doing to go in april, now fed fund futures are pricing 50% chance of june and that is kind of the consensus for the move and stell only 50%. to me, i think this trade has potential to work very quickly. >> you still have the paradigm of the spread with all the european rates, germany to france. five-year highs, supports this general premise. the move to 2%, things are not quite as good. >> okay. so what happened to the utility

tell com, gains in the market, soared on s&p 500 near 50-week highs, albeit gains in the sector were small in the overall market. does this put a floor in the markets and help support it. >> the things about those trades, they have performed four or five weeks in a row, even they are up. >> all right. >> the ricochet from this violent move on energy is outperforming. they are steep. tn v not all reits and utimts, many are. >> first thing, yield trades have been fairly stretched for a while, even though i've not been that skeptical about the market. this is an area i am skeptical. we continue to see an upset. i think the rope we're seeing that, people buying into that are probably betting this is more of an inflation adjusted yield trade rather than a fixed yield trade. that probably makes it more

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steve, other than making i'm here atme move stuff,rade trader offices. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and 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. td ameritrade. welcome back to "options action." let's take a look at the market. despite volatility, s&p 500 is stuck between january high and february low. that's left a number of stocks in no man's land. break it down, a man that was lost and now is found, dom chu. hello, dom. >> i don't know about lost and found, maybe a little of both. we want to take a look at stocks not lost, not found all at the same time because pretty much it's been a no man's land for the stock market. look at the 52-high, the high over the past year versus the low over the past year, right

now we're pretty much smack-dab in the middle of it. if you take a look at dow components, it's even more so. this is what i need. check out what's happening with shares of visa. if you look at visa stock, right now it's trading just around $71, $72 a share. that's right there in between it's 52-week high and low, between $50 and $80 a share. drug giant merck, $53 a share. now talking 52-week range, $45 and change to $61 and change. again, right there in the middle. caterpillar, a stock that's been beaten up all kinds of ways here in the global macroeconomic sense. that stock again, $72, $73 a share, right in the middle of the range. jpmorgan on the big bang side of things, $59 or so dollars a share. that stock stuck there in the middle of its 52-week highs and lows. it becomes a question about

whether or not traders and investors take a look at stocks, see downside or upside. right now glass full or empty, lost or found. it all depends on how you want to play them, melissa. back to you guys. >> dom, thanks so much. have a great weekend. with many stocks treading water, mike has a strategy that may revive them. mike, do tell. >> i want to look at stocks he's mentioning, how to use a strangle. specifically what we're talking about, how to sell a strangle against a stock you already have. first of all, we're looking for stocks that are, as dom was pointing out, range bound most likely. the other thing is because we're selling options we're looking to do that relatively short time frames. we want to look for options to expire in 90 days or less. we want to collect yields that will pay us for the risk we're taking. in this case sell a call on a put, we want to make sure we collect 1.5% a month of that's doing to depend a little on how volatile we think the underlying stock is.

caterpillar, this stock has had a sharp rebound with commodity associated names. the thing is, commodity markets haven't come too far too fast and haven't come far enough to revive that super commodity cycle stock like caterpillar. this is one of those names where i think you probably should feel comfortable if you own it selling it at a higher level. the other thing it obviously has fallen sharply over the last few years. buying at a lower level might make sense. what we're looking to do specifically here, get over to the next screen, here we go, we're going to look to sell the april 77.5 calls. you can collect $0.70 for those and sell 67.5 puts, collect $0.85 for those. this creates the strangle. if it's through the 77.5 the call we sold, away, but collected $1.55 sell strange else effective price north of

$79. contrarily if it goes below you may be compelled to pie more of it. we collected $1.50 premium to do that. down around $66 level. this is the kind of trade you want to do when you really feel like, you know, we're probably going to be capped out a little on the upside but i would be interested in purchasing more at lower levels. if it stays right in here, going to collect that premium. >> this is a playbook for stocks in the middle not just for caterpillar. what do you make of this sort of trade? >> i like it. if you own it and a long-term holder and looking to buy yield and buy lower, that is really the most important point. you can always cover that call to the upside if you were going to be called away. main point, using april expiration. i wouldn't do strategy looking out months and months especially in a market, stock this volatile, tied to the global growth story we know can change quickly. >> exceptional volatility.

this stroke selling 75, 55, back to 75 and now back at 72. the risk obviously you get more of that roll tilt, blow outside the advance you're talking about. if you do get a v and return right back to the point you plunged, you typically will start to go dormant, back and fill, depends how much time you put on the trade. >> for stocks mentioned in no man's land, is that the way you view it as well, they are in no man's land, something should happen? >> it's about the precondition. visa, right, it's gone up five, six years, just rolled a little bit. caterpillar from 120 to 50, bounced a little bit. circumstances are completely different. not because you're between the high and low, where you came from. >> material differences between those businesses. visa a has fundamentally been growing successly, the commodity

supersized caterpillar plummet. really short dated strangle here, going out over a month. shorter than usual you would be looking for something to make a sharp move. >> in general would you look to make a play on stocks stuck in the middle or breakouts, breakdowns. >> i think after the moves they have they set up for decent shorts. i would be careful on the short strike on the downside. again, you're fine for april. >> this is the calendar spread, the space, russell, you're selling that. if you wanted to buy longer dated premium might make sense. >> coming up next, one hot soup tray. shares of campbell's shoop at an all-time high. is it a no touch? we'll tell you what has a chart master so worried. i'm here at the td ameritrade trader offices. 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 and 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. td ameritrade.

here at the td ameritrade they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey?

td ameritrade. welcome back to "options action." time for a little call, look back at open trades florida aren't doing so hot. last month dan thought it was time to short the transports. take a listen. >> this is a trade i'm looking at early next week, 134 sets up well, april exploration, 133.50.

you can buy april 130, 115 put spread paying $2.50 for 15 wide put spread. >> since the time of the trade, the transports have rallied more than 3%. so dan, what do you do now? >> stock up $3 today. stock in general up as much as s&p 500 is in the time since this trade was put on on february 26. to me that doesn't concern me so much. it's a massive rally. here is a problem with the trade. i was obviously early and that makes me wrong. long premium direction trade as long as the clock is ticking you have to make a stock, 15% premium stock it's there, roll this out early next week but this is one i probably have to cut my losses. >> dan, a little encouragement. how many times have the dow jones transportation up eight weeks in a row, which it has just done. exceedingly rare. you'll be fine. >> i need to give myself more time here. >> also last month carter thought the run in campbell soup

would cool off. take a listen. >> look where it's struggling. it has gotten right back to its all time high of 1998, touched there and closed down on the day. we think that's exactly where it stops. you've got a situation of a whole bunch of this or a bunch of that. the third opportunity or prospect of this higher we would say is 1 pours. >> simple thing to do here, look out to may, buy the 60 strike put. this is only doing to cost you about $1.60. >> the stock hit a new high today. so carter, you stick by the view? >> if you've got a v bottom those can accelerate. if you've got something increasingly extended it's basically end stage kind of behavior. this has gotten steeper and more vulnerable. >> look at this fundamentally, i don't see how there could be more upside. this thing is very, very rich here. there's a lot of air underneath it. i'm completely flummoxed by how the stock is traded. i'll tell you soundly if i was going to be short anything this is the place i would want to be.

>> coming up next final call from the options pit. 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 3:12pm every day or jerry getting dumped every third tuesday. jerry: 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. td ameritrade.

steve, other than making i'm here atme move stuff,rade trader offices. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and 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. td ameritrade. time for tweet, a common one we get "options action" to twitter. looking to trade options can anyone recommend a good book. thanks. mike, maybe you can take that question. >> i'm happy to take this question. this week options edge released and written by yours truly. that is on sale now. this is suitable for both novices and people with quite a lot of options experience. >> who knew, "the options edge." final options time. >> bump and yields from 5 to 2, tld. >> mr. options edge. >> stay short campbell's. >> i got in the mail "the options edge" i looked all over

for my name, mel's name. >> nada. >> i thank all of you. >> fair enough. put calendars. >> have a great weekend. our time expires. stay tuned. mad money is up next. >> announcer: the following is a paid presentation for the 21 day fix brought to you by beachbody. [ cheers and applause ] >> very nice. thank you. hey, welcome. i'm tom bergeron. if you are struggling right now to lose weight, keep watching because today right here on this stage we're gonna show you how you can lose up to 15 pounds or more in just 21 days. >> announcer: now there's a breakthrough new way to lose those pounds and inches, and it happens in just 21 days. >> in 21 days, i lost 10 pounds, 6 1/2 inches, and two dress sizes. at 44, i'm excited. [ laughs ]