so, who are you expecting? i'm simon hobbs in for my good friend melissa lee. we're at the nasdaq market site. this is what's coming up on "options action." >> yeah? that sums up apple this week. but if you own the stock, we'll tell you how you can get your money back with a simple trade. plus -- >> walmart, always low prices. >> that certainly was the case today. it could be serving up a big

warning to the world. we'll explain. and -- >> i love gold. >> you're not alone, buddy. but the man called the bouillon break-up says there's a better way to play gold. he'll reveal. the action begins right now. >> let's get to it. because it was the one stock captivating main street and wall street today, and it wasn't apple, it was walmart falling hard today on very little news. is the tumble today a broader warning for the economy, and for the market. let's get in the money and find out. dan, what do you say? >> i think there was a lot of things going on with walmart today. the stock was down 3%. that was the largest one-day decline since february 18th, when the company had reported a disappointing q4 and guided down for the full fiscal year. and so when i think about walmart here, it's had a nice steady incline. it's up about 9% on the year. it's got a 3% dividend yield,

trading at a market multiple. consider the fact fiscal 2016 was the first year they had an annual sales decline since 1980. there's a lot of things going on there. obviously amazon's results speak to a little bit of taking share. to me, walmart up 9% on the year. makes me a little nervous here. i think it could retrace some of the 25% move that it's had off the bottom in november. >> 25% off the low. >> yeah. >> obviously has giveback risk. i'm sure you're looking at certain levels. today's action's bad after a big move like that, presumptively more to go. >> if you're looking at valuation, this is not a growth story, a secular decline story. the migration of retail is going online. we also know that they've been facing historically a lot of wage pressures and we're continuing to hear more about that. they have a lot of things that will continue to pressure them. don't expect to see a lot of top line growth. you really are going to see

instead pressure on their margins. that's not a reason to buy it at a current market multiple. >> i want to make one last point. since february 18th when they lashlt reported, the ceo talked about lower oil being a possible tailwind for them. when you think about who their consumer is. well, since then, you know, crude oil has rallied about 50%. gasoline has rallied about 18%. so that tail wind he was hoping for may not be it. obviously 25% of their sales come from overseas. the dollar had really hit that profitability. if those things start to cancel out, amazon and prime starts taking share, this stock's going to be in the hurt locker for a long time. >> okay. let's get in the money and find out. dom, what do you say? >> they'll report may 19th. some new traders out there, i think there's an interesting trade set up. i hate pressing stocks on a down day like this. think about it early next week, you may want to think about put calendar, trying to isolate the may 19th earning event. the stock trading about 66.66

today, you could do a may 13th weekly, two weeks from today, may 20th regular 65 strike put calendar. you're selling one of the may 13th weekly puts. 65 puts at 50 cents. buying one of the may 20th regulars for a dollar. that costs you 50 cents. that is your mask risk. what you're really trying to do is get to may 13th, have the stock move down to the 65 strike, have that expire worthless, offset the decay of the longer dated one that you own, and then you have this put that you can ultimately turn into a vertical put spread. >> it's an interesting case. oftentimes when you have relatively low volatility stocks like walmart, you don't mind going out and buying the outright put. but this is a stock that doesn't typically move that much on earnings, and implied volatility. for the broad market, and for walmart specifically, you get to basically mitigate half that expense. now you're cutting the risk in

half and you get to own some down time for a period. >> between now and the -- >> that's right. >> i'm sure you're watching the trim lines. a break is usually -- gives you more, you know? >> okay. >> listen, this is a trade, when we talk about earnings trades, you've got to get a lot of things right. what this trade is trying to do is help you keep in the game up to the earnings event. i like the idea of the short date put calendar. >> moving on. a huge boost to commodities, like gold. here's what our own carter said about bouillon just a couple of weeks ago. >> what we know is the low in gld was literally interday low. $122.37. $22 rise. we've given back exactly a third. so one-third retracement. today we close at or near the

high. we bounced quite well and closed almost at 117. you have the vishl you'll there. this is an opportunity by my word. we get long gold if you're not already there. >> that was the view a couple of weeks ago. the chart master sees another way for gold. >> gold has continued to rise, the gold miners a lot of leverage by virtue of debt. they have come to life in a crazy kind of way. we've got really good charts that i think will put this in perspective. but the stats here, i just wanted you to start with this. this is the actual gld from its structural low. and the gold miners. now, you're going to expect this kind of thing with beta. and with the leverage associated with an equity versus a commodity. but at this point, we think this is a bit overdone. again, 100% versus 24%. i want you to look at since the data begins, this is an old index out of philadelphia, what we know is this ricochet is now

the steepest, it's three months, the steepest three-month move on record. and it is drawing in either shorts or forced to cover people who are quite late and are getting involved. which we think is late. so a couple things i want to look at. here is the gdx. what the top panel is is simply the gdx and its 150-day moving average. and what the bottom panel shows is, the percentage above the 100-day moving average. we are right now at 52%, higher than at any point, at any point in the past ten years. so again, you can use a phrase like overbought or crowded or complacent. we think it's pricing in a lot. a couple of the things i wanted to look at. you can draw your lines this way, you have something of a down trend. and so here's our day-to-day chart. we've completed this formation.

you had your head and shoulders bottom. we think it's going to stop here. so if one's long and captured these gains, i would grab some. if not, we think you can catch this as a short and it is likely to fall back here. we want to sell gdx. >> mike, what do you think? >> first of all, it was a great bullish call that he made. not too many times you get to make a call short time double we've seen in gdx. one of the things that sharp move has meant is premiums have gotten quite high. it's going to get kind of expensive. if you take a look at the straddle basically in gdx going on 30 days, it will cost you way over 10% of the current level of gdx. just going out and buying options is a tough thing to do. what i'm looking to do is help finance a longer dated bearish purchase by selling near dated options. specifically i was looking at was the july 25 put spread. sell the may 25 puts for $1.

basically cut that cost in half. now, that first option is going to expire in less than one month. obviously you've got all the way out to july for the bearish bet on the longer dated put. >> this is a brilliant way to put it to pick a top. i agree with everything these guys have just said. like walmart, you need to find ways to finance the options in the market we've been in. i know we felt a little volatile this week. but the slow creep we've had two months for now has been hard to be long premium options. the top seven strikes of open interest are all puts. people have been trying to do this the whole way up. the june, i'm looking june 18th puts, june 14th puts, may 18th puts. try to pick a top, it's a difficult business. i think the way these guys are trying to do it makes a lot of sense. >> and there's structural versus tactical. gold can go much, much higher. on a tactical basis, your biggest three-month move on

record, we think capture some gains here. >> going out to july, also, what could cause gold and other commodities to fall very sharply. you could see some action from the fed, maybe you could get something in june, or maybe even just breathing about it could cause that -- you're not likely to get it between now and may expiration. >> tweet us at "options action." check out our website options ak son.cnbc.com. sign in for the newsletter while you're there. here's what else is coming up on the show. >> is this my fault? >> no, siri, it's not. but apple shares are tanking. and the pain could soon get worse. we'll explain why. plus -- >> i'm melting! >> that's what one group of stocks is doing. and it could spell more pain for tech.

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. [ that's a good thing, eligible for medicare? but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit

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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. welcome back to options action. there's no doubt that apple was one of the week's biggest story lines in financial news after the biggest publicly traded company out there posted disappointing quarterly results that stunned investors. it didn't help that apple stock fan carl icahn that he sold out of his entire position. after all was said and done, apple had its worst week since january of 2013. and it lost around $62 billion worth of market value. that's a lot of money. let's put it this way. $62 billion, what apple lost, is worth more than the market caps

of 434 members of the s&p 500 index. it's like losing the entire value of, say, an american express, or a biogen. or it's worth two veleros. even those reduced targets on average forecast a 34% gain for apple shares. now, it's about whether the stock has caught the attention of some of those value geared traders. back over to you, melissa -- i mean, simon. just kidding. i knew it was you, simon. >> thank you very much, dom, have a good weekend. carter, how do the charts look here? >> let's look at it to the. if we know an uptrend is defined and clearly an uptrend for quite some time, higher highs and lower lows, decline has been the opposite. lower highs, lower lows. you also can draw your lines any

way you want as charters or technicians are inclined to do. here's one way, a triple top. here's another way, we've come right back to the new down trend. and we're failing. here's another way. call it head and shoulders top. but the reality is, we're hovering ominously right here at these lows. ultimately, to my eye anyway, we have lower to go. potentially down filling this gap. here's the long-term chart. again, we could put in our head and shoulders. put in your break and trend. but the reality is, it looks lower. and as a minimum i think we can come down to this long-term uptrend line. that would give you 80 bucks. and that is lower from where we closed the day at around 94. >> wow. >> what's interesting here is i was one of the people taking a look at this thing earlier today and saying, this is just getting too cheap. because of earnings, the company has suspended any potential buybacks. i think they could be stepping

in and buying shares. i got short the may 90 puts earlier today in anticipation things would start to level out. but as i began to think about it, somebody asked me, what's the cheapest valuation that apple has traded at in the last ten years? i thought this was probably it. actually, it isn't. go back to 2013, the thing was actually trading six times over earnings at that time. which would represent the high 60s from here. i'll tell you what i did. i actually bought those puts back and put a different trade on, essentially that will be willing to get long. but is actually willing to make some money. what i was looking at with the june 90-85 put spread, i bought one of the 90s, sold two of the 85s. so i actually was 21 cents is what i ended up paying. you can probably get it better than i did. if it does decline down to 85, you're going to make close to five bucks there at june expiration. if it continues further, of course, those profits trail off.

you'll get long down around 80. which is obviously a pretty big discount from where the stock is currently trading. it is cheap, but it has been cheaper. >> cheap gets cheaper. here's the problem with the stock right now is you still -- the big money's been selling for basically a year for all intents and purposes. you have a problem here, the sell side is still totally -- like 44 buys, six holds and one sell. at some point they'll capitulate. they love the product and they still think the stock is somehow intimately tied up to it. when you think about it, we use the term no-brainer with apple, it's probably somewhere closer to that long term uptrend. at that point their cash balance is basically going to be 50% of their market cap. but the one issue, why i believe this stock can go back down to the mid-80s or maybe down to carter's level, is in the year ago period they just reported, they sold $40 billion worth of iphones. in the quarter they just reported this year, they sold 33 bds.

something fundamentally has changed here. i'm not telling you it's an all-out disaster, but just as overshot on the upside it has a potential to do on the down side. >> you told me after you have a big cap report like this, it trades in values. hundreds of man and woman hours have gone into what it's worth. and this is as close to fair value as you've got. why would you call it lower? >> meaning when you get a reset, a gap associated with news, right? up or down. news is always the reason markets are closed. at that moment you have thousands of man-hours trying to figure out what it's worth. markets are inefficient. so they will gap to where the man-hours suggest it's worth. but you don't actually stay there. you actually end up, after you gap up you go higher typically, and after you go down you go lower. the markets usually don't gap it to where it belongs. >> 80 bucks. >> up next on the program, clearly a brutal week for biotech. one of our traders sees the group bouncing.

he'll tell you why when we return. 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.

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there's no way to predict that. td ameritrade. we have a news alert for you on yahoo!. seema? >> we got an update on the compensation package for fiscal year 2015. mayer earned a total of $36 million, a 15% drop from 2014, when she earned about $42 million. keep in mind the stock losing about 30%. so this is an interesting thing to conder as we wait for further details on yahoo!'s strategic move in selling itself. >> how long do you think she's got? >> until they sell it. she's out. since she took over, the stock is up 150%. having little to do with her. she's destroyed a lot of value. but that's what ceos get out there, $35 million.

>> okay. speaking of tech, time for the upside call where we look back on some of the winning trades. last week, dan said this about tech. >> i want to look out to september expiration. i want to do this right before apple's earnings on a little bit of a bounce today. when the stock -- or the etf was 43 1/2. you could look out to september expiration and buy the september 43 and sell one of the 39 put at 75 cents. that is your max risk. >> okay. the xlk, fallen 3%. what are you doing now? >> you stick with it. why i wanted to look to september in the first place, i think this will play out over multiple quarters here. i think it's going to be a very difficult year, like last year was, not for these names that make up a big waving of the xlk, but -- >> they could have done a lot worse. so i think some of the additional weakness could follow. >> here's what carter had to say about biotech.

>> so, another 5%, 6% on the catch-up trade for ibb, which would give us more convergence here. we like this long. >> the simple way to make this play, look out to june, and buy the 300, 320 call spread. that costs right around five bucks. you're spending about 1.5%, give or take, to take a bullish bet that will take you through the june expiration. >> it's been a tough week. what are you doing now? >> it was a bad week. with the gilead today, that smoked the whole thing. the principle here is that we're still involved in the long side, wanting to play this as both a head you wind, tails you win. we think this will be an outperformer. >> basically we're down three bucks and change, about 1.5% essentially of the level of the index. if it continues to fall a little bit further, i actually like selling puts. convert this into a call spread risk reversal.

one of the reasons we bought that call in the first place so we wouldn't take this risk. a lot of constituents of this index are really quite cheap. gilead's results this week notwithstanding. on "mad money" tonight, cramer's got three hot executives talking dividends. and a generational shift affecting stocks with the ceos of american electric power, columbia sportswear, and ep properties. you don't want to miss that next. on "mad money." next on this show, the final call from the options desk. 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.

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. welcome back. let's get to some tweets. this one is from tim rankins. after hours, the price hit 121 post-earnings. should we play for it to hit that after a slight pullback to 116? >> i'll tell you, we've seen

this play out before. facebook has done very well after earnings. numbers were spectacular. it jumps up, then sells off. it could sell off further. if you're thinking about a stock substitution, that is probably a good way to think about doing it. i would buy calls rather than the stock here, paubecause i th it could fall from here. >> i can't tell you to buy it here. positive sentiment seems to be focused on it. >> this is probably a better bet. >> the last word from the options pit. carter, kick us off. >> if you have great profits, long gdx, take some of them. >> i like calendar spreads in gdx, using the pits in may and july. 25 strike. basically let some of that high premium pay for the longer dated option. >> i think walmart sets up as an interesting trade. we haven't seen a whole heck of a lot of retail earnings. >> thank you, guys.

thank you very much. i'm simon hobbs. go to our website options action cnbc.com. and the daily segment inside "fast money" every day at 5:40. see you next friday. 5:30 eastern. i'm here to level the playing field for all investors. tlbs always a bull market somewhere and i promise to help you find it. >> i'm jim cramer. my job is not just to entertain you but to teach you. so call me. or tweet me @jim cramer. we got through the