get up right now and go to the window and stick your head out and yell i'm mad and i'm not going take this anymore. >> that's a bio tech investors feel this year, but we'll tell you why the group can be second half sleepers.

and, well, you're probably looking at the wrong metal buddy because it's silver that's surging and we'll tell you why it could be going even higher. >> let's get to it. want to see something really scary, check this out. this is what you get for lending the money to the swiss for the next 50 years. next for zero in the hunt for yield in investors have lost their minds. let's see what this means to money. if first thing that comes to mind is the banks. >> the big headlines on the weekend for the brexit situation is the ftse and s&p filled in the entire gaps, but there was a lot of damage done in other asset classes and you're speaking of rates for all intents and purposes. the two-year yield is below. the ten year treasury yield closed down 1.8 last week and

touched 1.42 this morning. when you think about what's going on, there's a on the of damage that's been done to the investment landscape here then you put that bank stock index, specifically in europe, out there and look how little they recovered and that just tellhouse something is going on. obviously the rate situation is a big part of that globally so you have to look at the banks again is. >> narrowest in nine years. you can't make money in that environment when you're lend sglg not a financial and if you're an investor you're left with very few choices. you're basically banking on trying to get 7% a year. you're not going to get that in fixed income this year. unless you get aggressive in the credit risk and that result is you're going do have to see support for equities because you're looking at the difference between the corporate earnings yield and it's growing slowly maybe, but it has a chance to

grow. bond yields have no chance to grow. you buy what you get, that's it. >> we know u.s. banks the sort of credit quality is much better than europe, but it's the ability to operate and make a decedent wage. trading is shrinking. with the nim this low, it's not a good proposition. you have the sharp breaks and then you all thrown back to the scene of the crime. >> this wreak is really interesting because we had the results. some of the u.s. banks god to raise degeneratiividends. that's goods news. hasn't been fantastic. i think it's in the stocks. you have to think about the rate environment again. we have a euro stock bank index and you look how poor it's acted.

it's bloelow 2009 financial cris debt. you're going to see some come pitchlation there this summer. you don't press those on the short side their so dreepressed you look at a bank of america. more so man jhonny peralthe low the 11. i think that you can simply look out to august expiration and catch the july 18th earnings report in the -- the q 2 life-support is on the 18th before the opening and the strategy is simple. you buy puts. yes you did have options premiums explode. you have this event. you have a july 27 fed meeting. i don't think there's going to be a lot there, but if you look at the the way european bank stocks act there's going to be capitulation this summer. you buy the bank of america. you may about 15 cents for

those. this afternoon, 50 cent ss your max risk. about 4% under lying stock price. just not too far away from where it was trading twog days ago. >> i understand where you're going to r with this, but i don't know the stock is going to go lower. i think the reason we saw this bounce back because people said brexit, whatever it's going to cause, isn't going to face us right now. they basically pushed that off. every concern we had brushed that off. >> do you know when they're going to trigle the article 50. >> you don't think so. >> it's two years from then. >> i know, but what are you talking about. we have seen the banks come out and say. >> obviously drops from 14 to 12. instead of just any other -- >> i think you could throw a dart.

>> i have a question. you mentioned the action of european banks. when the k card was released, the price banks have been decedent. i thought it was going to be a sell the news event. we held on to gains in today's session. >> is it more positive than the proceeding negative meaning the collapsing associated with brexit. meaning, if it was really, really positive you would retrace all the damage done and. >> will like the broader markets. >> at least attempt to do that. the banks didn't even come close to doing that. >> in the midst of all this we have other things overshadowing the market. stocks have acted really well considering it. puerto rico default, that was big news a little while ago. >> bank of america is down the 2% of the year. >> i'm talking about stocks that behave. >> duane:. >>le u.s. bank stongs which used to be the important sector can't get out.

the way the european bank stocks is working something is going on here. has nothing to do with brexit. >> are you saying don't press this because it's already been beaten down. >> i think a lot of bad news is backed in here. you're spending 50 cents on a 13 dollar stock. you're talking about 4% of the premium. in is going to expire in 60 days. i might think about looking to spread it even believe it or not doing something you don't like, but a 1 by 2 to take into the premiums. that's where the all premiums are in the options right now. >> good discussions. let's switch gears to bio tech. that's right. we're checking in after the first half closed. putting out today sentiment is just about the worst they've ever experienced in investors in bio tech right now. we decided to look at some of the numbers. it's performance in the first

half going back through its history and what we found is first half that just closed was the second worse performance for the first six months of the year since 2002. we dropped 24% in the first half of the year. you can see the other three worst performing first halves there as well. in 2002, tech had gone through the.com bubble. right now people say we're just seeing confidence get eroded because people are worried about pricing in the election. we haven't seen great data lately. people are starting to lose confidence in them, as well. one certainty people are talking about though is these big companies need to buy and they've got a lot of cash. maybe that will turn things around in the second half. you can see these gigantic cash hoards.

there is a wide expectation these companies are going to buy. the question now is that enough to turn their stocks around. >> all right. thank you. enjoy your weekend. >> so the chart master over here is taking a look at health care as a second half sleerp pick. >> a way of catching the defensive nature of health care. this stock in particular is more correlated with the lower beta names. merk, pfizer, lily. >> the bottom panel is its relative performance, the stock to its peer group, the ibb. engi amgen peeked a year ago in august. since that peak, it's out performed the ibb and that's very important. meaning, it's a defensive a fai

group. here is the actual chart itself on the long-term basis. again you can draw is the lines any way you want. my eye sees that. when you have a standoff. bears and bulls are very much matched off. a series of low or highs. people make the bet this is going to do this and that's what makes a market. i'll take the other side of that. i think the uptrade the coming based on how good the relative performance has been. soy want to zero in on this long-term wedge more immediately. here is base of the action of the past year and a half. here's our all-time high. went to about 17.81. let's draw some lines. no lines, lines. i think we're going to do it. i'm going to play for the past high at 181. sort of an offensive, defensive low beta name.

>> that would be quite some upside. >> i do think we're in a world right now where it's hard to imagine what it will good nudes for a news for any stock is going to be. i've seen that chart going sidew sideways. i'm going to make a bet here. it could indeed to my eye continue to track sideways. looking to collect some premium. these things expire in just over 50 days. i'm collecting 2% of the current stock price to sell that option and basically in a world with no yield, in is a place you could look to get some. >> what do you think. >> i actually like the idea. so we think about this sometimes that's pretty cheep option pricing in general and sometimes good to sell cheep option pricing. i'd almost take that premium if you agree with the breakout call, take the premium for a

sale and use it to do a call or a risk. like a mild bet and i think that makes sense, but you're capping your gain. >> steve:. >> obviously structure notwithstanding the issue. can a lighter group catch up. and two do you go with something that held up a bit better. obviously as you saw in the brief segment before, it has the most cash, it has the lowest beta and it's the most defensive. it's the heads you win, tails you win. >> it's trading a a cheep mulei. there's not any reason why the bottom should fall out of any stock like in. >> although could you have said that a month ago or two months ago. >> i could have and actually if you sell this put, so you might put the stock down at 146 pux. and two year low is around 132,

133. that's not a lot of downside risk. the low is 132, in this market, that's not a terrible amount of risk to take and you're elect books collecting 2% less in two months. i say that's a good trade. >> check out our website and while you're there sign up for the news letter. it's better than fourth or nuf fireworks. 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 to option actions. we saw an impressive rally in stocks and an impressive collapse in volatility. after trending higher in the days ahead of the eu referendum vote in the uk and the surge after the vote, we've seen the collapse of the fear gates since then. since that high we've seen it fall around 40% and maybe a bit

more. that may mean the bottom is in for stocks at least according to fund strats, tom lee. in a notes clients he showed the last four times we've seen the vix fall by at least 35% in four trading those. those ended january 4, 2013. october 21, 2014, december 22, 2014 and august 28, 2015. he notes that in each of those instances in hindsight the market had already made a bottom and in each of those four cases stocks finished higher three months lartd. admitically it's a small sample size, but it might be something to consider traders look to see if these post-brexit lows are really in. something to watch. back over to you, melissa. >> thank you, don. have a great weekend. >> what do you make of this incredible round trip we've seen

n vix. >> it went too far too fast right after brexit. the news is out. the vix will go up one point. we got a 5% decline right after brexit and what did vix do, it went occupy about ten. option premiums got a little bit hysterical and whenhysterical, the time you want to get long. we've taken a long look at this through many cycles and if the vix is above 25, you're going to get a bounce back. >> so you missed it. >> no we talked about at on the show a couple of times. >> i don't mean you in general people probably missed it. >> yes, maybe you did maybe you didn't. maybe you were sitting at home and before you got a chance to buy or sell anything, the market had already come back. i don't feel like there's a lot more upside from here. >> you don't agree with tom lee.

if you look out to the vix future, there's stild pricing. if you're looking at spot vix at 15 after a historic decline and historic rise, not telling you a whole lot. >> it's all noise. has anything changed materially for the better over the past week or two. it's arguably gotten worse. arguably nothing has changed except possibly getting worse. we know equities and asset class have done nothing for 18 months, yet treated you. >> everybody has gotten a second chance. brexit happened, market got slammed, and options premiums went through the roof. now we round tripped it completely and option premiums are down. ask yourself this one thing f you had another chance to hedge, would you do that? it makes a little bit of sense. >> use the low vix right now to hedge. buy insurance.

up next, mike doubled his money on silver so why does he have regrets. we'll explain when options actions 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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welcome back to options actions "options actions." how is this for a killer call. >> i'm thinking higher, so closed. played for 8, 10, 12%. >> i'm looking at the august 16.5. you could call about.50 for that. >> since then, that was a couple weeks ago, silver surged 15%. what do you do next. >> this is tough. if you think about it, if you put money to work and you're wrong, you know what to do. get out. if it starts working, and really starts working what if you take it and keeps going. this is a very difficult. i don't know the answer. i got some silver myself. let's look at this. here on the s slrlv, the actual thing we were trading for the show. if you look at it now in relation to how far above or blow it's been. the bottom panel depicts the

percentage. it is 25% above its average. it's only done that two or three other times going back basically a decade. so do you trim it? that's the problem and then it keeps going. that will be maddening. do you get out and goodness because it all comes back? here is the daily chart. you can draw these lines anyway. these are the setup. you have a head and shoulders. you also sort of have a bigger cup and handle. it's kind of a run away train. i would take some measures and trim, but something this strong can take on a life of its own. >> mike. >> one of the things is we're short. time is actually working on our side if we want to stay in this trade. dan made the point, don't sell that upside call if you think it's going to break out and he's right because we did a little over a double. you would have tripled if you had listened to dan and not me

and said i'm going to let it -- let the cubes roll here and see how it turns out. i will see this is the tradeoff you make sometimes between the probability of profit and allowing premium to work in your favor or just letting it ride. >> and that's a great point. you went for the high probability trade. that's generally the best trade, especially when you're doing long premium options directional strategies. my only point at the time is if that is the case, buy that 16.5 call near the money. and if you start getting the move towards the strike you were considering selling, you have the optionalty of spreading it and reducing risk. >> since you're already in it, i think you stay with it. >> up next, we have the final call from the options bids. 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. wearing powerful sunscreen? yes! neutrogena® ultra sheer. unbeatable protection helps prevent early skin aging and skin cancer with a clean feel. the best for your skin. ultra sheer®. neutrogena®.

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 to options actions "options actions." let's get to some of the tweets. why do you do one over the other. so mike, do that one. >> look, very quickly, if you think it's going to move up slowly, sell the put, collect the premium. if you think it's going to move fast, buy the call. >> you agree with that. >> yes, it's a matter of conviction. just like the trades we talked about earlier too. >> time now for the final call ahead of the 4th of july weekend. >> sort of big steady safe name, health care, but amgen in particular. >> enjoy independence day weekend. if you're trying to catch lobsters as i have been, don't try to disguise yourself as one first. >> meaning wear sunscreen. >> brexit or not, that was never part of my thesis and i think something is going on with the european banks here.

i think you can look to express that in the american puts. >> that's our time. thank you for watches. check out the website. in the meantime, have a great fourth of july weekend. enjoy your weekend. mad money with gym cross-clajims right now. the following program is a commercial presentation of total gym fitness. i work out to stay young. to stay in shape. to be able to do things that i wouldn't normally be able to do. and that's what total gym does for me. it keeps me active. it keeps me positive. it keeps me focused. age is a state of mind. my results were fantastic. i