so we'll help you find the car you want and show you what oers paid for it. (male #2) once truecar came into the picture, that's--that's where i go now. it was just such a quick, easy experience that i just go back to them. (announcer) discover for yourself how easy car-buying can be with truecar. we're live at the nasdaq on this friday afternoon and look who decided to join us. hi, guy. well, guy and the crew are getting ready, here's what's coming up on the show. here's the stock market and here's your portfolio and we've got a trade that could help you catch up. we'll explain. plus, is disney about the rock the world of cable? off with her head! >> some interesting moves from espn could change the media landscape and supercharge disney's stock and the bet against the market was terribly

wrong, but still didn't lose any money. no, it's not, just the magic of options. the action begins right now. let's geet get right to it. stocks are sitting near record highs, but if you missed out on this rally, what do you do? >> one of trades i was looking at in the immediate aftermath of the brexit vote when we had this stock market volatility across the world. i wanted to go back to u.s. centric stuff. things that had yield and one of those names was target. sounded counterintuitive in a lot of ways, but this was a name that you know, made a lot of sense because they don't have any international exposure. it's got a 3.35% dividend yield. it's massively underperformed many peers. walmart, which is up on the career. when i look at chart, i look at a gap. there was a massive gap in mid may, they guided down that june

quarter and if they can get just a few things right when they report in mid august, i think you're going to have this stock kind of fill in that gap, so i think a name like target makes a lot of sense. one last point. that jobs data this morning, if that did become a trend, then you are going to want to focus on u.s. consumer again. >> i don't know if one job's data point makes trend. one thing you can say about target, is it's not at expensive stock. trading about 13.5 times, a 30 to 40% discount. obviously, much cheaper than the rest of the margaret and look at the consumer debt data we were seeing this week. we're seeing that consumer rs spending. taking on more debt and you know, this is largely a consumer driven market, so, that might not just be good for target, it could be good for some other areas where you see cheap valuations in the presses. >> i'm on options action tonight. i can't tell. >> i'm glad you're aware of

your -- >> i split from that. i love being on oa. this is like my fourth time, which makes me welcome a regular. >> not really. any way. >> target. talk about target. these guys are right. went from 85 to 68 in about two days of trading. that was a huge move for a very big stock. mike just mentioned valuation. trades are up 13 times forward earnings. compared to walmart, close to 17 times, so if they can just get it right for the next couple of weeks, here's a stock that could trade up to 77. dividend is there. 3%, 3.5%. i think if it treads water here, it could grind up the 77 and do what it's going to do. >> what's your trade? >> i think you want to define your risk with omgss. if they were to miss and guide down again, the stocks going back, it's going to have a handle on it very, very easily. probably back to 65. so i was involved in this when it was about 70, but i think you want colook out of the money. look to august expiration.

it should fall in auction. but i think umt to buy a call spread. today when the stock was 71.50, the august 72.5 call spread. about 1.15 for that. in between 73.65 and 33.5, up to 3.85. getting back to that gap which could be about 75. i think it would overshoot there. so to me, i think this kind of call spread, it risks 115 to possibly make 385. it's out of the money which i don't like on a directional event trade, but a gap fill could be in place. zpl this trade structure surprises me, i have to say because you're selling a call that's pretty inexpensive. whatever, maybe 15 cents. normally what i see you do is buy an upside call. wait for that stock to rally and look for an opportunity to spread. >> i think the stock just rallied a dollar and a half in two days.

if it got to about 74, ape. then it will roll the position up. i would roll it up and out a little bit here, so that 15 cent call that i'm selling, the 77.5, it's really just to kind of off set a a little bit of decay in the near term. but i wouldn't spread it if we have the move before the earnings event. >> well, lots of calls. >> watch this show on friday. learned a lot about these things. >> put seller possibly? >> you know, someone put to me at work, statistically it works 70% of the time. 75% of the time and that's right. but what they don't tell you, maybe you talk about on this show, i don't know. do watch it every week. but the 25% of the time it doesn't work, you get your face ripped off, so i'm not a big believer in selling puts when the vix is trading around 13.5, 14. you're not getting paid enough to sell puts in this environment. >> just the last thing if you were going to look out a little bit. 65 looks like good support.

i considered a risk reversal. which xwgives me a pretty wide berth there. >> you do enkoenter if the stock gets back to a level of support, maybe bob will be catching a bit. >> now, let's talk about earnings. we have some names that options traders see big moves. >> earnings season officially kicking off nx week and wile we're hear from big names like alcoa, young brands and delta, all eyes will be on financials. j.p. morguening, citigroup and wells fargo, the first of the big banks to support and the options market expecting big moves. jpmorgan could see a 3% move and then there's wells far duo and citigroup on thursday. could move to nearly 3% while option traders expect a nearly 4% move higher. those companies combined could

create an $18.6 billion shift in market cap for the financial sector. and with all the volatile we've seen, investors will be on their toes. >> thank you very much. >> mike, how you trading the banks? >> number one, we've talked about the stocks that have rallied. they're cheap on valuation basis because people have a very pessimistic value for them. ifgs looking at is selling august 40 puts for 1.15. the vix is below 14, but citi isn't particularly cheap. when i was looking at this, those options were in about the 90% percentile and earnings is the reason. i think there is a lot of bad news.

you have a decent amount of downside. if you do, you're going to have the opportunity to sell some call side sz. >> talking about bond rates. we talked about it prior so this. we have ten-year yields going down. it's as flat as it's been in eight or nine years, the environment does not bode well for these guys and gals to make money. i get the valuation argument and i get they're as well capitalized i as they've been. my concern is how do they make money in this environment? they all start to report. now, the jamie dimon bottom, february 11, it has held up. traded down to 56. >> if you're worried about something internablly and some exposure, usual i citi and morgan stanley get egged with those concerns.

>> a few weeks ago, we had a bearish trade on citigroup. if you think it's an earnings trade, i would do something in the weeklies because what i don't like is the duration of this trade because the way european bank stocks act, i know they've had a day and a half off and are green. if you're going to do it in a single catalyst, you need to collect little bit of premium. and we've seen big bearish bets in the space. we saw them this week and talked about it in deutsche bank and i don't think their situation is the same. you brought up morgan stanley. how have they started to make as

they've seen pressure in other areas. asset management is the answer. >> waetd, hold on a second. are you kidding me? we have the betterment ceo on the other day. charging eight bips to manage your money. those fees are going down. it's becoming increasingly co competitive. >> robo advisers manage less than $300 million. it's going to take a long time. it's happening now as we speak as far as asset management fees. every day open "the wall street journal" and cnbc.com, there's a story about asset management fees going down. >> obviously, dan doesn't agree, so where do you stand? with mike or with dan. mike can do no wrong in my eyes ch we're going to crush him. >> yeah. >> with that said, i happen to agree with dan. listen. banks have rallied with the broader market, but they have lagged considerably now. for quite some time.

so, again, i just don't know how they make money. i understand valuation. it's not not the environment for the banks. >> got a question, send us a tweet. check out our website, and if you're looking for a good summer read, check out our super cool newsletter. here's what else is coming up. ♪ think that's incredible? a couple weeks back, mike bet against the market. he was wrong, but didn't lose a die. how? he'll ek plain. plus -- is disney about to rock the world of cable? some potential moves out of espn could alter the media landscape forever and boost disney's stock. we'll tell you what it is when options actions 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 3:12pm 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. welcome back. we've got a news alert on bill. let's get to sima. >> activist investor approaching square cutting back his position in the animal health care company sells another 6. million shares of the company bringing his stake down from 5% to 3.8%. back to wrou. >> thanks so much. it is worth noting that ackman's had a difficult year. this is one of these stocks that is higher this year. >> about 19 million shares. actually, he should have done, i have no idea where he got it. if you want to stay low on the stock, it's got to close about 50 bucks. i think the report on august 3rd, i don't think it's particularly expensive.

i would be inclined so stay with this. >> move on here. a lot of talk about how espn may g going beyond the bundle. julia boorstin has the details. >> we're hearing disney is looking at ways to bring sports content directly to consumers outside the tv bundle. john skipper is here along with his boss. they would be the ones who'd be negotiating deals with say roger goodell and adam silver, who are here in sun valley along with with other league commissioners and team owners. sports with a large presence here. casey wasserman says it's inevitable that sports will be offered outside of traditional pay tv and that disney must be working options including a streaming technology company ban. maybe making an investment in bam as well as offering more niche programming options. >> obviously, they're not going

too old anything to affect the value of their cable contracts and their distribution contracts, but no question they can start in certain areas and focus on going directly to consumers. whether it's a soccer specific product, making it up. a specific project around a specific set of sports or rights as opposed to a broad offering that looks like espn. >> we reached out on the reported bam investment as well as new digital offerings they're working on, no word back from espe. folks here have been talking about what a good job twitter did streaming wimbledon. makinging the rounds here, tlos lot of talk about how twitter is likely looking to make more sports content deal as it prepares for the nfl this fall. >> thanks so much. what could these moves mean for disn disney? >> it's one of these names that

was a massive market lead e for years. really stalled out about a year ago with concerns about the unbundling of broadcasting properties really took hold. the stock's down about 20% from highs last auction where they reported their q3 earnings, the stock is trying to make a bottom here in the high 90s, but i want to look out, they're going to report on august tth. we have about a month between now and august 12th exploration. the options market is implying about 4.65 move with the stock at 99.5. that's kind of fair when you think about it because we have a month duration and then if you were going to just think about the movement over the last four quarters, the ten-year average has been about 3.5%. when we figure out that implied move of 4.65, that's the at the money call and put. if you were inclined to make a bet, you would be buy iing the

call or 230 or the put for about 235 if you were bearish. i want to go over one of the thing that's interesting here is that implied volatility, the price of options is disney is pretty cheap. that's why i think that one month move that catches the earnings is pretty cheap. but here's the thing why i think the stock could really move over this time period. i think the stock's in a bit of an inflection point. when it broke down below the long-term trend here, it's just trying to find some proom, but still down below the one-year down trend. if they can get going here, probably getting up to 105, 107, back to that up trend where it should find resistance. we have this little triangle forming here. i think you're at a technical inflection point. if there's any news that helps reenforce the story to the upside, i think you're going to have a big breakout or if they continue the see the secular head winds they've basically been highlighting for the last year, you could see a break down

in that stock and if you look at it, there's really lows down to about 86. that's where it bottomed out in february. >> i wonder what carter would say about all those lines on that supermarkmart board. >> you can draw your lines however you want to. i draw them like this. in the 30 days that surround earnings on disney, you're going to see moves north of 7%, so the cost of the straddle that dan outlined is quite reasonable. viewers may remember that we saw a situation like this a year ago as well going into earnings. what ended up happening, the stock got shellacked. what are the chances of the stock here over the next 30 days? pretty low. reasonably priced. >> last stock went from 120 down to i think 98 and pretty much in a flash of an eye. what's happened sense? the whole space has been

revalued. deservedly so, but you have to ask what's the right valuation. i've said for some time, between 16 and 17. that's where you are now. gun to my head, it's an honor to sit with carter. >> should be. he's at the sein it in skills. >> he did a nice job over there. a little messy, but carter would have crushed this thing. could be pressure on the stock through the downside. >> up next, strange but true. a few weeks ago, a bearish bet on a market. stocks have since rallied, gyu get this, they made money. how? we'll explain 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 3:12pm 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.

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nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. 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. we take a look back on some of our winning trades and this is a curious one. it was a bet quens the market. take a listen. >> huge drawdowns. down 10%.

plunl in august, down 12%. it's sort of buy everybody where. >> a one buy two put spread on sbys. 20 puts. then selling 187s for 270 apiece. basically, sell two of those. net net, you're not going to spend any money to put this on. >> mike sold more puts than he bought. he's up on this trade. so, what are you doing now. >> the first thing, the reason you sell more options than you buy, we did see slightly elevated volatility. you don't want to spend a lot to make your bets. doi think you might want to look at adjusting your strikes here. get long the 210s and sell against that. >> riskier as you're moving it

out because the probability of a level in the 205 area increases, so to me, i think carter had a you know, i liked his technical work. it was wrong. i was wrong. i agreed with him. mike's trade was the perfect trade if you were wishy washy on carter's. >> as long as the economic data is wishy washy, what are we getting out of the market? we are not going to see it. >> we had a pretty big drawdown the last week of june. that trade structure, the one by two doesn't work if you're playing for the draw down. if you try to take that off, one by two on a 5% drawdown. >> to your point, this is something you have to let sit. if you run to that short strike -- this was an options trade. noot trade that really fit carter's technical view. it wasn't a trade to put

protection on -- >> it fit my view. >> just saying -- >> like frick and frack tonight. oscar and felix. whatever. >> power of options though. >> it does. >> it's a curious thing. >> right. get the direction wrong, still make money. >> that's why you do a show like this. >> up next, the tweets on the final call. 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. . let's get to our tweets. swrak ets required on options action. did you apply for a waiver? >> i respect that. these guys think they're -- i go with the tie. i don't wear the jacket. just the way it works here. >> time for the final call. >> i love being on board real quick. want to see something, watch the bond market. ten-year yields are going to go down.

>> alongside by selling the august 40 puts for a buck 15. >> dan. >> play target for a gap filter. >> looks like our time has expired. check out the website. "mad money" starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there is always a bull market somewhere and i promise to help you find it. "mad money" starts now. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. i'm trying to make you money. my job is not just to entertain but educate and keep. call me. or of course tweet me @jim cramer. i want to talk about the big picture. building wealth and not just owning stocks in partic.