we're coming to you on the eve of the olympics. mike's going to compete in the high jump later on. he's stretching. check out what's coming up on the show. old tech is partying like it's 1999 and there's one name that's about to break out. we'll explain. plus, how would you like to make money if disney shares go up or county on earnings? >> perhaps you haven't been telling the truth. >> ain't no fib, but could be a magical options trade on the mouse house.

and something curious is happening the markets and it could make for a perfect trade. the action begins now. let's get right to it because stocks hit another record on a blowout jobs report. if you missed the rally, what are some of the names you can buy to catch up? dan, we kick it over to you. >> we're going get a few names that have missed out on the rally, really big participants in the rally leading up to when we flat lined. i want to look at now is nike. especially in front of the olympic, you'd see a lot of enthusiasm about a company that has so many of their branded athletes in the event. this is a company that reported their fiscal q4 in the end of june, it's a good report. obviously, currency is a huge head wind, but in china, they

put up big numbers. i've been sceptical about the rally. i'm not trying to buy break outs. >> the stock is trading cheap to its group. going to get new management sort of life going in. they're getting out of the equipment business, which i think is a good move, although that represents probably just under 5% of total revenues. so the opportunity to buy a stock at a valuation below historical average, but still a top line, probably 6%, 7% and bottom line around 11%. i think it's a good name. >> you sort of inferred this when when you started talking. it's not just this. even the old sort of names like microsoft are a value. meaning the growth name, starbucks, nikes, have stalled, so these are ones that could start to participate as some of the value names fall back.

>> the names aren't really values anymore. this thing is trading before it turns cheaper than the average staple stock for example, so, you know, you take a look at that on a risk reward basis, there's a lot more potential. >> do we have to believe there's a rotation in the market to believe there's a catch up trade in the likes of nike? >> we've had a lot of rotation. now we just finally broke out since may of 2015. so my point very simply is i'm not going to buy this stuff that's been on a runaway breakout. if you look at the thing like nike, if you say the sentiment's poor, you can see catalysts in the name. they're not going to report their qi until late september. maybe you get a move up between now and then, i'm not committing new capital. but the trade i want to describe, i want to look out to september. it's not going to catch their earnings. it's a really sentiment trade and what i want to do is sell a downside put and buy an upside

call, so it's not that convicted, but if i get the direction right, this trade's going to make money. here's the trade, when the stock comes about 55, 65, you could have sold a 52.5 september put at about 40 cents and use the proceeds to buy the september 57.5 call for 55 cents. your net debit is 15 cents. all you're going to lose is the 15 cents. as the stock moves closer, you're going to have losses as it moves to the call, you're going to have gains. here's the thing. if there's a big move back to 60, that looks like the level on the chart. i'll let my man speak to that. your worst case, the stock, 52.5. >> that's the opportunity here or the trap. when you're looking at something that's lagged, the hope would be it's been a long and protracted wipeout that's starting to come to life. it's not specific to sneakers.

it's growth. if this is going to come to life, it's highly speculative and next one is the same thing. because you're saying this loser, i would just -- because everything else is working. >> i like these trades for a couple of reasons, one of the things is that the call you've selected is a little bit closer to being at the money than the put you're shorting. the put is down near lows, so that essentially, if you're getting long it, you're getting long the best price you could have. and finally, look, if you have the stock put to you, you're going to own it 8%. given the other fundamentals, i think it's probably a good place to own it. >> if it starts to move higher, that's your risk to the trade and then you have the opportunity to spread it and sell a call against the call

you're long, that's how i like to trade these. i chose september expiration that doesn't capture earnings because then i won't have the gap risk on single stock. i have a market risk, but that's why i chose the previous low. >> is this a trade in your view that should be put on assuming the market is going to drift higher? or go higher? >> well, there's nothing wrong doing it in that case. if it drifts higher, you'd be happy owning the stock and happy in this trade because it's not a long premium trade on balance. if it does drop back, you are going to be put the stock, obviously, it could work against you, but you're going to own it at a discount. >> the earnings drum continues next week when a slew of retailers report, but it's disney that could see the biggest movement. the chart master is taking a look at that chart. >> this is literally as big a brand as of course a nike and it's got as big a problem, meaning it's been stuck.

it's underperforming and i would call this a perfect standoff. meaning bearish and bullish forces are balanced. now, here's a two-year chart. there's so many things you can say about it, right, but what we know is that you're going from 90 to 120, plunging back. it's a big old mess. now, if i get rid of that, what we know is also that it was this sort of double top, there's sort of the double bottom. but what if we just draw the lines this way. a series of lower highs, higher lows. the apex of a triangle. represents a standoff so that those who don't like and those who do are equally matched and typically these are explosive resolutions. let met put it in a longer term context. here's the equilibrium. literally, i'd say this is 50-50.

this is the kind of thing like a nike that could well come back to life if the earnings are good, but this is a opportunity for option to play in a more clever way than just to say up or down. i'm going to bet on the upside, but you flip a coin. >> what's your take, clever way of playing this? >> it sounds like he's straddling the fence here. he is taking that sort of bullish tone overall. it's not a trade we recommend a whole lot, but this is an interesting case. because disney is a name that hadn't moved. for years, every earnings just chugged a little bit higher until this time last year. last year, little bit of concern about court cutting affecting their revenues on the espn side and suddenly, the stock was able to move more than 15% in a short period of time.

right now, the options market is basically saying oh, it's going to be another nonevent. only implying about a 3.4% move. that's an opportunity to say why don't you buy that and in this case, it's going to be the august 95.5 straddle. you can buy for about $3.55. less than 4% of the current stock price. if the stock moves 4% higher or lower, you're going to see profits. of course, if it pegs exactly at 95.5, you could lose $3.55 a share. the chances are low. >> you've got to understand what you're doing and how to trade

this if the stock does move over the last four quarters, moved about 5% on average and it looks to be at an inflection point. i've been kind of skeptical but i'm doing a little market research now on cutting the cord and i'm telling you, it's a disaster. you won't be happy doing it. there's going to be a lot of people going back and saying i want your packages. anniversary this for one year. i think you could have apple move. if they're able to guide up, i think it -- >> what if somebody asking about zika with 30% of the revenues coming from park and the largest in orlando. you could have all kinds of things that could rattle people. you're owning the move and you think it's cheap. >> just saying even if you get to 100, you're going to make money. >> what did you find? >> it's really hard. here's the thing. if you get rid of that cable box, you're streaming everything online and then relying on your internet connection. if you live in a concentrated place like i do in new york city where there's 500 people streaming netflix every night, the quality is poor. here's the other thing. when you start adding these apps, this is what their bet is, then all of a sudden, you start adding these up, you're going to be more than your cable thing

any way. so all the unbundling is going to go back. if you see disney in the 80s again anytime soon, you want to buy it. >> it was interesting to hear you talk about both charts because you sounded on the fence. >> the whole point of this segment picking disney, which is what represents. no one knows the answer and nike, got the same data. draw the wedge. apple, too. if you work into that, it represents those who have been selling are probably finished with it and those who have resisted buying are maybe finished with that. it literally is 50-50. i'm going to bet up. it's the momentum in the market. >> any good news could be a problem. >> a question. send us a tweet. if it's nice, we'll read it in the show. while you're there, check out the fabulous newsletter.

over 100,000 of you have, so don't be left out. here's what else is coming up. >> tech stocks are going nuts. ♪ and there's one old tech stock in particular that looks like it's about to breakout. we'll tell you how to profit. >> plus, side effects include nausea, dry mouth and constipation. >> you can add lost money. the drug stock went bust, but they may have a way to get your money back and they will explain when options actions returns. 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.

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oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim.

only at td ameritrade. a news alert on tesla. >> saying given the size and complexity of this undertaking, the cost of operating the factory could exceed our current expectations and the factory may take longer to bring online. shares are unchanged. >> thank you very much. an updated 10q after the bell on a friday before a weekend, mike. pushing out the giga factory. how do you think the stock will do monday? >> seems to be teflon pretty much. when you consider the valuations here, but you know, i don't think this is really going to be a big surprise to anybody. it is a complex undertaking. i think a lot of people had high

estimates for what the cost would be and i don't think that the people who really support the stock are going to basically lose faith in it because of this. >> well, if you just looked at the nasdaq, you might think we're living a '90s time warp. look at microsoft, intel, apple and cisco. since the brexit, those names helping to push the nasdaq to new highs. let's go to the man who still lives in the '90s. dan. >> i'm going to bring up a name, it's not that i want to chase the market here that's because the s&p is making new all time highs. i think there's some stuff going on in technology that could make investors look at ibm once again. when we see intel, microsoft, cisco, some of these megacap tech dinosaurs really at 52-week highs, about to make new ones here, i want to look at ibm. i think there's an opportunity for some sort of corporate action. not too different than what we saw in hewlett-packard here. the company has been in a

massive, massive revenue decline over the last five years. this is going to be b probably their fifth year. consensus has revenue growth flat. i think investors would be happy to see that, but here's the thing. the ceo, she's coming up on her anniversary. this board is going to get anxious if they don't have a plan to move faster with their faster growing businesses here, so one of the things i wanted to look at ibm, talk about a trade. if you look at this thing, it's up 18% on the year. just broke out. it's massively outperforming. it's got a 3.5% dividend yield and maybe investors are starting to price in. 150 looks like support here.

this is the seven year chart. looks like it made earlier this year, an epic double bottom. it broke out above that down trend here, but to me, this move taking upon on thinking they're going to make an acquisition or do a split. that's why i think you want to look right here. this is applied volatility. the price of options at ibm. 30-day is hitting a 52 week low. it's about 17ish percent. well below the 52-week average. options prices are cheap. if you think tech is going to carry some of these long-term laggards with it, and still down 25%. from its all time high in 2013, you may want to look to the next catalyst for ibm. that's going to be their earnings. in october and you could just buy a call. the options are very cheap like i just said. so when the stock was about 163 today, you could buy the october 160 call, hang about $6.50.

4% of the underlying price. the fact that is in the money. the stock goes x dividend on monday morning. i'm trying to pick a near the -- i'm in the money, but a near participation on the upside and if i get the stock moving well into say the mid to high 60s, then i can look to spread it and reduce cost, but i have 2%, break even on this thing. i know i'm risking about 4% of the stock price, but if there is any action or fundamental improvement, the stock is going to be above 170 and if you want to look at this gap here, this is between 180 and 190. that's where it's going if there's any good news. >> do you like this trade or would you reduce costs earlier on? >> i like the trade. the options, it seems like it's really expensive, but this is $165 stock, so compare the price of the option to the price of the stock, it's not that much. something else, is the stock itself cheap?

kind of hard to say. 12 times forward earnings, but this is a situation where the best part of their business, which might be cloud, for example, not well respected compared to azure and their competitors. but it is growing. and the multiple on it if they could get some traction would be significant, which favors a corporate action. i like the trade. the stock is up 40% plus. >> isn't that why you wanted to find your risk? >> 100% why. >> a year ago it dropped gap on earnings in july. we're toying with retracing that gap to the upside. probably our reasonable price objective. put you at about 175. >> so lines up exactly pretty much. >> think about -- what meg whitman did. i think it is going to need the

take a page out of miss whitman's playbook here if she wants to keep her job. not saying she should be gone, but that's the sort of thing that could happen. >> up next, stocks are hitting all time highs, but crude is stuck in the mud and that could be a problem for one corner of the credit market. we'll explain. 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.

it's my decision to make beauty last. fix. roc retinol started visibly reducing my fine lines and wrinkles in one week. and the longer i use it the better it works. retinol correxion from roc. methods, not miracles. oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face.

mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. welcome back. we take a look back with some losing trades. last week companycompany and co and coe and carter made a big bet on big phrma. >> a clear break of a down trend, this head and shoulders bottom. we think this throws higher. long, pfizer and overweight, health care. >> if you wanted to make a bullish bet, you could buy the september 37 calls for just 60 cents. >> hurt the share, so what are you doing now? >> up on monday and then just right after the earn, disaster. walk away.

>> it's informative in a situation where you put an options trade on. your thesis was the wrong one as it was here, clearly. you lost about 48 cents if you hit the bid on the call. the stock's down over a buck and a half. so, obviously, you didn't go the way we thought, but it was a better trade than buying the stock. this demonstrates why you want to trade options. >> i would. i still like health care. i like ivb. >> all right. moving on. a few weeks back, dan looked at falling crude prices and offered up this trade. >> today when hyg was traded, you could buy the august, october, pay 1.20 for that. big one of the october puts at 1.45. >> so far, the decline in crude has yet to hurt the high yield markets, so what gives? >> hyg started a crack. one of the ideas here was to sell that august 84 put to finance the longer dated one. i don't know when this is going to crack, if it will, but let the august 84 expire over the

next two weeks or so. and then you can think if you still like this idea, then you can spread it by selling a lower strike put, but here's the thing. the trade may be done. maybe crude did what it needed to do. break 40. hold there. it's a small loser now. i'd like to wiggle out and look for better ideas. >> up next, final call from the options pits. 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.

oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. you tweeted, we listened. do we have free will? carter. >> that's really up to you. and it depends which endeavor. at home or at work or in the market? >> please. final call now. carter. >> try to be contrarian here and

buy disney at this perfect standoff between bears and bulls. >> mike. >> options are fairly priced to do that. you could buy a straddle unless you're just wanting to make a bullish belt. >> dan. >> i like carter's disney. >> we're off for two weeks, so go to the website. see you in two. >> announcer: the following is a paid advertisement for the back2life 12-minute back pain solution, brought to you by back in five, llc. pain pills, hot and cold packs, endless doctor visits, injections, even surgery. if you or anyone you know have tried these or any other ways to relieve yourself of back discomfort, only to find you still suffer from debilitating back pain, then stay tuned, because your life is about to change forever. introducing back2life, the 12-minute solution to a lifetime of back pain. back2life has caused a sensation around the w