look who decided to get here. >> honestly, we're out of gas. >> that's what some traders are saying about the energy stocks, and we'll tell you what it is that has bears growling. >> look for the boys from brazil. >> we've got a way you can make even more money. we'll break it down. >> you know ha they call a quarter pounder with cheese? >> yes, it's a royale with cheese. it's all about the metric

system. but do you know how to buy shares of mcdonald's for just $6? we'll show you. the action begins just now. with today's rally, stocks just posted their first winning streak since october, and driving the srnl, a break out in crude. is this rally sustainable? we'll get on the money right now. >> it's interesting here, because the fundamentals for crude really aren't that strong. i think everybody had basically said this thing was going to go to 20. there were people talking about it going even lower than that. still with modest production declines, we're seeing weak builds week over week. when i look at this, i feel hike we may have come a little far too fast. bear in mind, with 530 million barrels in storage, this is about 30 days worth of consumption for the unit. it's a really volatile commodity, that's why we use a lot of what we produce in real time. so when i look at this, i think

right now we're probably going to see it level off. >> on top of the inventory numbers avenue week, there's also the chatter that there could be a meeting which producers will either freeze production or cut production. and then the dollar came down. >> and the meetings you talk about, that rhetoric started on february 11, around 2:30 or so in the afternoon, and it's been off to the races ever since. you had john killdoff on your show about two weeks ago. and he talked about it going down to 18. i don't know if it will get that low. oil rae versed to the down side for the first time since that february 11 date. that is interesting. i think the ovx bottomed out yesterday as well. and if you want to chase these equities, do so at your own risk. at this environment, a chevron, at 40 times trailing is down right expensive. >> yeah, well, thanks a lot.

good to see you, brother. mike, we talked a lot about supply and production cuts. we didn't really talk about demand. one of the things that's interesting in a week that we saw the federal reserve take a more dovish turn is that they're worried about global growth. we've seen a lot of bad data in china. i know the data has been incrementally better in the u.s., but that's part of this whole crude story. since crude topped out, when the dollar started rallying at the end of qe, at the end of 2014, it's been in this massive down trend. crude oil has not been above its 200-day moving average since september 2014. there's been a couple massive counter trend rallies. last year we had one in the spring, about 45%. in the fall, 35%. now we're up maybe 40%, 45% off of the lows just weeks ago. and in each of these instances,

the counter trailed. when you think about what guy just said about the ovx, about it bottoming out with crude oil turning a little bit, i think it could set up for a good counter trade in some of these large cap oil names. >> and to get at the larger cap names you're going with the track oil. >> chevron, exxon. so looking out of the money, i want to look down out a few months. there's the chart of the xle. look at that down trend, $60. it looks like that was a level where it broke out, where it really got going to the upside here. if it fails at that down trend, i think it sets up for an interesting trade. i was looking at june exploration. you can buy the june 60, 56 put spread paying $2 for the june 60 put. at a dollar, your max risk is

$1. so here's thing. it's not a massively widespread. i'm targeting a break down level hear. i don't want to risk a whole heck of a lot of premium, because i'm looking out a few months, but i like the risk. >> this is an inexpensive options, and if you take a look at chevron's most recent earnings, the one bright spot was refining. if you look at product, storage, they are also they're at all-time highs. that big margin they're making on the refining side, they're operating full out, that is an area that's not going to be a surprise tailwind like it has been in the past. >> take a look at slumber j. on fast money at 5:00 every night, we talked about the potential for that stock to trade down to $60, make a double buy. that's pretty much ha happened. you've had a pretty incredible bounce since. just like the xle is in this monster down trend, slowest

lumber j, it's down a percent and a half. as we get closer to earning, i think it was april 21st or so. people are going to ask, do i want to be long slumber j at this, and i think the answer's going to be a resounding no. >> what is the one thing that would keep you up at night in terms of being directionally bearish? >> the dollar, if the dollar kept going down. that is a nonconsensus trade here. we're going to show a trade about the dixie. i'm expecting it to be continued to be range bound. if some of the economic data in the u.s. firms up a little bit, chairman yellin, or chair woman yellin said april is a live meeting. you would see the dollar weakness reverse very quickly, and then you would probably see oil move the other way. >> well, the surge in oil has been a boom for a number of

stocks. >> a stunning reversal for a select group of emerging markets. check it out. china now up 10% so far this month. india up 8% after unveiling. today the central bank said inflation is retreating and gdp will turn positive in late 2016. and brazil, this is what's really captivated the attention of global investors, the stock market there up 22% on track for its best month since october 1999, due in part by the rebounding commodities, but politics a major driving force, rising speculation that president dilma rousseff who has been blamed for not implementing enough reforms will be impeached. investors are betting on a change in government, that's not only helped stocks but the currency, the currency the best performing global currency in 2016, up about 9%. so all of these factoring

helping the global etf and still trading at a sharp discount for the s&p 500. >> seema, thank you. valuations are relatively cheap, what do you think? >> the reason the valuations are cheap, if you take a look at something like eem, the biggest sector represented there are financials. and that also tends to be the cheapest. this is the sector that has been underperforming equities globally for the whole year. so there is a bit of a catchup trade that you could potentially play here, whether you're looking at the banks or eem where financials are very well represented. even if we saw weakness in the broad equity market, this is an area that could play some catchup, so i don't mind making a bullish trade here. could you do a call spread remembers risk reverse a selling the may 30s

for 30 cents. 37 represents an area where we have seen some resistance, and 31 is an area of some support. we did see a loafw of 28 and change. >> what do you think of the trade? >> i like the target that he has on the call spread to the upside, if you look at the eem it's right at that 200-day moving average. it also could fail. i like defining the risk to the upside and targeting a break out above that. i'm not so sure a put like the eem is so volatile to the down side. i'm happy that you would be happy to take a shot at the 31. you know, looking out a month and a half. >> one of the things here is that we're trying to mitigate some of the decay, because of that volatility, options are slightly elevated. they should be.

to your point, that would be a place to get long eem. >> mitigating decay? this is a high-brow. >> did you have to look up those terms? >> the eem has been in a pretty significant down turn since the end of 2014. and the bounce we've seen since it traded 28 or so, we've seen bounces of that magnitude a couple of times over the last year and a half, two year, although i always like what mike says, this might be trading right up against the resistance, just like oil is, just like the s&p is, i would travel with some trepidation. >> i agree that, and that's really the reason we're selling that upside call. 20 cents may not seem like a lot, but getting it where it can have a hard time to depreciate. >> keep the tone civil, we might even read your tweet on the air. it's options action.cnbc.com.

some say it's better than the "new york times," check it out. ♪ i'd like to buy the world a coke ♪ ♪ and keep it company ♪ it's the real thing >> it sure is, because mike coke doubled his monday knee coke and has a way to make even more, and -- ♪ nobody can do it like mcdonald's can ♪ >> that may be true, but how would you like to buy shares of the golden arches for just $6? we'll explain when options action returns. ♪ it's hip to be square 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. (singing alougetting to know you. getting to know all about you... getting to like you. getting to hope you like me... is someone getting to know your credit? not without your say so. credit lock lets you lock and unlock your transunion credit report with the swipe of a finger. getting to know you. getting to know all about you...

get one-touch credit lock, plus your score and report at transunion.com get in the know. ♪ no, you're not ♪ yogonna watch it! ♪tch it! ♪ ♪ we can't let you download on the goooooo! ♪ ♪ you'll just have to miss it! ♪ yeah, you'll just have to miss it! ♪ ♪ we can't let you download... uh, no thanks. i have x1 from xfinity so... don't fall for directv. xfinity lets you download your shows from anywhere. i used to like that song. 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. if the dow were to close a month right here it would mark its biggest quarterly come back since 1933. if your portfolio is a winner, what's a way to protect your profit? we end with a stock replacement strategy. >> we have a little playbook. the market is green on the year after all that volatility. some of you may have gains in some stocks that you're saying i'm really happy the stock is back here. but some of the risks that were really prevalent in the market a couple months agatha took this stock down may be still there and you may be trying to define your risk.

so we talk about the term using options. there's a couple of criteria we like to think about. maybe in a single stock it makes sense if there is high valuations, a high valuation stock it's back to a certain place, but maybe the market's placing more scrutiny on high valuation stock. low options prices. you generally want to buy cheap options, and the last one is if you think there's the potential for volatility ahead. maybe it's single stock volatility or market volatility. i want to use mcdonald's as an example. it broke out last october at 105. i believe recently, mcdonald's has been the benefit of the selloff of the dollar. the dixie is down about 1.5%. look at the range that the dixie has traitded in the last year. it seems to have found a little support there.

i think trading stocks off of entry month moves on the dollar is not a great strategy, can 3r0e6d a little volatility. this is the last month of mcdonald's versus the dixie. this is the one year trend on mcdonald's, that was that trend we talked about that consolidated, made this new high early this year, consolidated again, and here is the move i think has a lot to do with the dollar. here's the thing about mcdonald's, it trades at 23 times forward earnings, it is an expensive stock for all intents and purposes. we know a lot of shifts in their menu have caused people to get bullish about it. but if comps were to change, if the dollar were to rally, mcdonalds at 23 times could be expensive. you might want to think about low employed volatility options. here's the trade that i was looking at in june, you could

buy the june 120 call for $6. i know that sounds like a lot of premium, but it's already 3% in the money and breaks even up 2%. are' buy ago cheap option in the money and defined your risk to what i think is an important break down level at 118.5. so that is one way you could use options to refine your risk and replace stock. >> what do you think of this candidate for stock replacement? >> i think it's a perfect candidate. he was talking about mid-low single digit growth. the top lean has actually been declining over time. this is not really a growth company, yet it's trading at a modest growth multiple. one thing i'm curious why you didn't do it is reaching out and buying the first out of the money call strike. one of the things about a stock like mcdonald's, it's a big dividend payer, you would own the stock as long as you get the dividend. if i thought it was going to stretch and continue to the upside, i might look at buying that first out of the money strike as far as the call's concern, but otherwise, i like

the trade. >> i think that what i'm looking at is the risk reward relationship. although the options prices are pretty cheap. what i'm trying to do here, if you're inclined to buy mcdonald's, you think things could continue to go, you have all the upside as you would with a stock here and your defined risk to the down side, when i'm looking at the money, i have all that extrinsic premium. >> what are some other candidates out there, sectors or stocks that you could do for stock replacement. >> whoa, you're throwing stock replacement my way. >> the notion that, you take a look at utilities. >> utilities are great. i think coca-cola is braking out here, but that would be much like mcdonald's, that probably sets up similarly, which is a very difficult word to say. i can't speak to the implied volatilities in coke, but just off the movement it's had. >> you know they talk about getting in front of things.

we shouldn't be talking about coke. >> i wasn't talking about mcdonald's here. >> yeah. they're cheap. >> coming up next, exactly what guy said. let's go -- no, shares of mcdonald's going wild. we'll tell you why after the break. here at the td ameritrade trader group, 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. if you have moderate to severe ulcerative colitis or crohn's,

and your symptoms have left you with the same view, it may be time for a different perspective. if other treatments haven't worked well enough, ask your doctor about entyvio, the only biologic developed and approved just for uc and crohn's. entyvio works by focusing right in the gi-tract to help control damaging inflammation and is clinically proven to begin helping many patients achieve both symptom relief as well as remission. infusion and serious allergic reactions can happen during or after treatment. entyvio may increase risk of infection, which can be serious. while not reported with entyvio, pml, a rare, serious brain infection caused by a virus may be possible. tell your doctor if you have an infection, experience frequent infections, or have flu-like symptoms, or sores. liver problems can occur with entyvio. if your uc or crohn's medication isn't working for you, ask your gastroenterologist about entyvio. entyvio. relief and remission within reach.

herthey work hard.ade, 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. i'm spending too muchs for time hiringnter. and not enough time in my kitchen. (announcer) need to hire fast? go to ziprecruiter.com and post your job to over 100 of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier.

(announcer) over 400,000 businesses have already used ziprecruiter. and now you can use ziprecruiter for free. go to ziprecruiter.com/offer2 welcome back to "options action." we take a look back at some of our winning trades. last week collin carter made a bullish bet on coke. it's been going so wild it's been turned into a national geographic special. take a look. >> capitalist, constantly on the prowl for new trades. a familiar opportunity appears. ♪ who's down? or the best? who's the best? who's the best? coke would rather be here than almost anywhere else. >> the a cool, refreshing taste of the world's number one carbonated beverage intrigues

the predator. but he must act quick and avoid the temptation to buy stocks. 100 shares would set him back nearly $4500. so to spend less, mike instead buys the april 43 strike call for $1.15. now to make money might need coke to rise above by more than the cost of the trade, $44.15 by april expiration, but it gets better because all things being equal in the wild, the value will increase faster than the stock will. and it will make mike a winner. [ tarzan call ] >> but with the april expiration just around the corner, the creatures of the wild only want to know one thing, what will collin carter do now? [ lion roaring ]

>> now you may have noticed that carter isn't on the desk tonight. guy is here. but of course he just sent us a postcard. hey, team, my wife is in maine for a childhood friend's 40th birthday. and it's all hands on deck for me here at home front with alden and brewster. coke is a no, no when mom is around, so that of course means all three of us will be a bit naughty this weekend and drink our share of the number one drink of all time. after all, when the cat's away, the mice will play. crazy on a friday. >> carter substituted like coke. here's run down. here's the story. this thing is now in the money. what we're going to do is roll out-and-out sell those calls if you haven't already, those will be the 46s, those will cost you less than a dollar and i will have banked some profits and still have upside. >> what do you think, dan? >> it was a great trade on these

guys' part. i don't know what you're paying 23 times for in coke. it's at all-time highs. >> the same thing you're paying 23 times for at mcdonald's. >> sales and earnings are declining for the third year in a row. i don't get it. >> i love this. i'm really enjoying myself here. >> i'm sure. >> but coke, the stock today is where mb donald's was six months ak, banging up against an all-time high at valuations you could say are stretched and then you saw what happened to mcdonald's. i think the same thing's going to happen to coke here. they're going to take the step to the next level. yes, you can argue that the valuation didn't make sense, and maybe the business model is flawed. >> you're playing with house money. >> now it's carter, coe and guy. >> i'm the big loser. >> yeah. didn't mean to agree with that.

coming up, your tweets on the "options action"s 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.

♪ no, you're not ♪ yogonna watch it! ♪tch it! ♪ ♪ we can't let you download on the goooooo! ♪ ♪ you'll just have to miss it! ♪ yeah, you'll just have to miss it! ♪ ♪ we can't let you download... uh, no thanks. i have x1 from xfinity so... don't fall for directv.

xfinity lets you download your shows from anywhere. i used to like that song. 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," time now for tweets. first one from alan. >> the stock is at $27. if you look at the money and the foot premium is about $16, $17. it's too late. the one that can you consider is the 20 one biocefen. >> why does guy have to switch chairs when he does "options action"? >> i don't know. they tell me to move. the good thing about me is i'm am by dextrous. >> i'm, this is fun for me. i'm away for a whole week.

don't miss me too much. i think the market fails here. >> risk reversals, eem. >> xle, i think it fails. >> and it looks like our time has expired, guy have a great vacation, "mad money" is up next. >> announcer: the following is a paid presentation for cize, brought to you by beachbody. this is the end of exercise. >> get ready to cize it up. [ beat drops ] [ people cheering ] are you ready to dance? 5, 6, 7, 8! >> ♪ on my way in i'ma take it ♪ >> stop exercising, people. it's time to start dancing. welcome to cize. >> announcer: cize is the all-new dance workout program that's gonna make losing weight fun and easy. >> to me, it's not even exercise because i don't want to stop. >> announcer: it's simple -- dance, have fun, and get awesome results.