about replacing your car because you'll get the full value back including depreciation. and if you have more than one liberty mutual policy, you qualify for a multi-policy discount, saving you money on your car and home coverage. call for a free quote today. liberty stands with you™. liberty mutual insurance. they are getting ready behind me. while they're doing that, here's what's coming up on the show. >> oh, snap! >> that's what they were saying about snap chat's ipo. but they are looking at another social media stock. we'll tell you how to play it. plus, the bond market is doing something very strange. and could it signal the next contrarian trade. we'll explain. and missed a run on disney? relax. because we have a way to buy shares of the mouse house for

less than a buck. a blockbuster disney trade. and we'll show you how. the action begins right now. >> let's get right to it. it was best day of the year for the dow but there are signs not everyone is getting on board. what do you make of it? >> i think an environment where we've been in, we have banks moving. they like that rates are moving. i think the fact is, you have a ten-year treasury yield at 2.5%. and the stockton feels pretty good about it. it seems like they could move together for all intents and purposes. to never problem that you have is that there's nothing out there in a week that we saw the fed suggests these guys will get hawkish too quickly. >> i don't know about the fed getting hawkish. it will influence the short end

of the curve. when people are worried about what the longer rates will do, we're looking at economic growth and inflation. we got a pretty good looking jobs report. that's just one jobs report. revisions will follow and could it very easily be a revision downwards. we've had a very big move. and would it surprise me the they didn't stabilize here or maybe even get lower while people are digesting whether it will mean real growth. >> right. the headline number was upbeat. we know back two months, the net are revise down. there was nothing the average hour earnings or workweek and it is a tell that we've been stuck in this range for a long time. what will get us out of this range? i don't think anything for now. i think it is time to expect

some giveback. jeth just figure out if we can do better. i have the ten-year yield. you can see that here. so what? let's see. you can draw some lines like this. you can clearly say that has that look to it. but in many ways, if that's the neck line, it sort of completed what it is supposed to do and gotten back to the high. could you draw the lines like this. not only are we at a difficult level but we'll give back a big part of this so-called trump or post election move. in fact, were we to come down, that would be a move. we doubled to 6. that would take you down to about 2 the.15. not a random number. here's the long term chat. the deny-year chart.

after this break, often you revisit before going again. so a pull back to trend here. that's about 2.15 as well. that's xagtly give back on the short term trend. the point at which we moved higher. so here is the tlt. the reciprocal, right? this is inverse of yields. this is what my eye sees. take it away. put it back. i'm anticipating a bounce. it is not random that we held these lows. this is tlt. i think we're going to work our way like that. which would be the same thing as a move in yields back toward the 2.15 plus/minus level. >> so are you bullish as well?

>> yeah. we're not going on retest those ten-year rate lows that we saw within the last 12 months. i think that's ridiculous. but i think we're in a show me state as well as the economic growth forecast. it seems like the investing role took on. one important note is that bonds don't move around that much. there is a good reason they are so cheap. and even though it doesn't cost that much, i will look to offset the decay. what i was looking at specifically was the april 126 call spread. sell the 126s. that's a net spend of $1.70. we're looking at 1.5% of this level. got about three months for to it play out.

i thinks the way you make the play. >> do you like this. >> some yeah. i think when you talk about, you have the fed. you're looking for a check package. you're looking, so i think his trade targets that back to a 2.15. that being said, we get and then they start going higher again. at some point a lot of people believe there's no stock market bubble. that's been going on for years and at some point it has the potential to really overshoot. think back to may of 2013. dwher the ten-year yield get? it seemed like ages ago. 3%. the stock market was much lower. so at some point, the equity investors want to see that. >> look, you can never get anyone to do something when it seem so wrong. no one wanted to buy crude at the bottom and no one wanted to sell it. no one wanted to buy banks and now you can't get them to sell

it. think the road less traveled. >> to your point, considering the kind of move that you could see, we've seen it already. we've seen 100 basis move in no time. the idea that you want to get net long bonds. a 30-year market. that's just plain stupidity. you're taking massive risk for minimal reward with you the action. >> does that mean it will stall? >> you can see the chart. the sideways action it rates is doing the same thing. even today with the so-called news that maybe there will be a change in the environment. banks have not made new highs. they're still stuck in that range. >> moving on to another big story. snap chat filing for an ipo and comparing to it the likes of facebook and twitter. hi, josh. >> some investors might think of snap as the next social media

super star and that immediately might draw comparisons to other tech companies focused in this space like facebook and twitter. snap described itself in different words. it calls it sale of camera company. the word camera is highlighted almost 80 times in that filing and that could draw comparisons to go pro which investors might not appreciate. go pro with disappointing results this week. let's look at how it does stack one facebook and twitter ahead of their ipos. snap generated revenue about $404 million. twitter, $317 million. facebook, 3.7 billion. as for who lost and made money, snap lost 515 million the 2016. twitter lost $79 million the year before. facebook flaked net billion. snap only disclosed daily active users in its filing.

hit 161 million. twitter had more than 100 million at the time of its filing, though it no longer provides that metric. facebook crushed both with 526 million. of course, the grand hope is that the company grows into the next facebook. comparing snap more closely to twitter. for example, snap like twitter, still a relatively niche platform. it is continually improving the core product for consumers and advertisers. not trying to be ubiquitous for its own sake. >> so dan over here is suited up. >> what do you mean? >> these are my spectacles i i said a said, i ripped off my 13-year-old daughter this morning. the 2012 will lead up, 2013 will lead to the twitter ipo and even

alibaba. we heard the same sort of 98 sayers about all of those. they were all sort of niche for all intents and purposes. i think snap chat is very niche but i think one of the interesting things about this company. they don't see themselves as a social media company. they see themselves very different. as a camera company. and with 158 million active users, it is niche and a really tight demographic. and i think they can go to a lot of places. i do see the sim tlarts on twitter. and of the group we just mentioned, it is the only one that really flamed out. they're talking about a $25 billion valuation for this thing. >> flamed out in the long term. let's not -- >> stock prices. >> facebook traded on the singled cat bid going out and then looked terrible. >> the question for people who are looking at this ipo, should i be buying it bright that time?

i would issue this caution. we've sustain exercise before. the long term story doesn't necessarily mean you won't face some very significant short term pain. >> is this good for twitter? >> i think when people think about snap chat in their limited financial that's we have right now, in their limited history. twitter has $2.5 billion in trailing sales. it is a $10 billion enterprise value. i think could it make twitter look really interesting. thursday morning before the opening, the ill applied move is 10%. about 12.5%. what is interesting to me is that the stock up 8% on the year. 7, it couldn't be worse often five buys on the stocks. 28 hold, eight sells. a price target. $16.5. that chart looks like disaster. here's the thing. i wouldn't be buying the stock here. i think the quarter will be good.

i think the run up to the snap chat. the ipo could be good for the valuati valuation. i think could you look to a june expiration. sell the down side. sell the june 15. 80 cents. use the proceeds to guy june 20 call for $1.15 costs you 35 cents. that stock as it goes up toward that long call strike, you're going to make money. as it goes town to the short put strike, you'll lose money. worst case, the stock is 15. it has an $8 billion enterprise. >> all you can say is just what this is. a trade. there's nothing wrong with it. you'll make fortunes trading. as a premise, it is uninvestable. it was $75. now it's $17. it has been a one way story. down and to the right. at some point, can you make a trade? >> there's an exception to that. around the current valuation of

about $12 billion or so, there has been like the very tepid response by the street. the fact is, every time it's gotten down 15, 14. you've done this trade several times. and several times it's been successful. i do like that because relatively speaking -- >> enough snap. >> somebody will figure out how to make some money. >> are you putting bunny ears on me? >> yeah, right. >> options action. check out our website. we've got this week's super bowl winner. just wanted to see if you were listening. while you're there, check out our super cool news letter. here's what's coming up next. >> mom, dad! it's evil! don't touch it. >> that's what traders are saying about one crucial group of stocks. we'll tell you what they are and what it could mean for the rally.

plus, how would you like disney shares for less than a dollar? >> okay, it's a deal. >> you've got it, mickey. we'll show you how to do it when options action returns. hecole he wand thank seam for wainhrghmyir. nly do igogoo yoney., elart.weat gy.yofoyo french ctohmucho g. on s with inkowi t mee.

aty outmplex tr.wh'sitg-sizehocrren c cfoony,waentop dist rht wnm rss inpp cha ets at a sreou dtlwiivpepe fe p, eea cot ny. soabout titiw >> welcome back to "options action." a slew of reports with media earnings. fox on monday afternoon, disney, tuesday, time warner wednesday, and viacom thursday. the health of the tv bundle and what trump's presidency will mean for regular sxlags deal making. fresh on the heels of the super bowl will likely give an update

on the boost it gets. could it face questions about turnover at its flagship news network. lionsgate sense with likely to boast with the hit la la land. 14 oscar nominations. time warner's call is likely to focus whether and when the acquisition of at&t will close is that what the telecom giant is getting. via come will likely focus. the biggest focus will be on the biggest media giants disney. reporting after the bell tuesday with lingering questions about the future of espn and disney's media networks division. the studio is coming off a record year with four of the top five films of 2016 and a number of big film franchises ahead. last quarter ceo bob iger said he was confident that espn would department and succeed over the long term.

near material the deals with some issues. we'll see what kind of report iger has tuesday afternoon. >> so how do you play the stock beyond earnings? >> we're going to talk about the use of a calendar spread. to reduce cost or risk. in this instance, we're looking to profit from time decay. always helpful. so taking a look at this, we can see that disney has had a very strong run up over 20% off its recent lows. so the trade that we'll look here will be leaning in that same bullish direction. but only mildly so. this is a stock that moves about 6% on average. specifically i'm looking at the february, march, 115 call spread. you can guy march calls for 125. you can sell it for 60 cents. a net distant of just 65 cents. the idea is that you kind of

want for the stock run right to that 115 strike. these february options will decay away and tone marches for just a net cost of 65 cents. this is a trade to the upside. looking for maybe a four or five. >> do the charts awhine this trade? >> it is come a long way day to day. if you were to judge the october february advance from my to about 112, it is a fairly mature advance in terms of magnitude. you're talking about a 24% move. duration. about 12, 13, 14 weeks in the making. the one thing we can say, it is not a popular stock on the street. you have a price target, only a few dollars higher than it is now. and you have analysts equally split. so there's not a lot of love for it. >> i think it will help. the street loved this thing when it was trading 22 times forward earnings. now it is 17 times forward

earnings and people can't get their arms around it. i find that interesting. we're not really looking for a breakout situation after such a strong move. but it is trading at a discount. espn is a very strong move. losing espn is a tough thing. i had to buy it back. >> i think it is the past comments that espn will adapt and there's a lot of enthusiasm about the "star wars" release. you're looking at 4% of the money. i would be shocked if you had a massive run the stock had. then you're setting up for a move later on. the extra makes total sense. >> that's a good point. on the regular options, what do you have? five strikes. i was taking a slightly bullish stance. >> up next, check out shares of ups getting hammered.

great news for dan who more than doubled his money. what will he do now in more options action after this. ia btag rmhei s you ow tin a atd assyn as thkom., , so mststs wi gwiw! ♪i taovk c,io-iuc cioa y, ede -ttried prtives,titid.alk or

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stthsame old gy.u rgot fnc, o ac won'let t ist go opad rs welcome back. we look back at some of our opening trades. last week, dan said ups would underdeliver. >> i would look at february expiration with the stock at 175. you could buy the spread for $2. >> stock is down more than 9% since that call. so what's next? >> here's a situation where the set-up looked pretty obvious to me. when you go for something not like mike's calendar. you go for a put spread, short dated into an event. that means you have conviction, it worked out much better thain expect. it is below the short strike. you move. on you're risking the difference between what you paid ask what you made to get the last few

nickels and that doesn't make a lot of sense. >> you paid so quickly. take money and be happy. >> now to facebook. last week, they said it could hit a new high. >> you either go to earnings breakout or earnings disappointment and that. could you say it is 50/50 in you could. we'll bet that facebook is going to exceed the high. >> you can spend $2.85, so just a small percentage of the current stock price, to guy march 135, 45 call spreads. >> facebook shares did touch a high but has since given up the gains. >> you did get this pop, 135.50. it is really that 50/50 thing. i'm inclined to stay long and bet that it will follow through. >> we're only risking $1.85. if it drops lower and you can pay $1.25, i would do that.

>> i thought it was a horrible rejection at the prior high. same thing with amazon and google. i think you see lower lows. y ng] at.oh. h thdosize y ng] m azsteding figureut tcomplexr ht ifort p let aou d orthwienir wa, to hell.that rren? h fromsize y ng] d'teecoedinthfigureut tcomplexr ht ifort p ny ohhat mytioneerkat? in-at tdriade.

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that sessyncs custudwian youant o! l ur devic, righ let's take a tweet. what do you think of the put spread? >> i like the 75/70 put spread. >> so no. >> time for the final call. >> the anticipation of rates will go lower. >> to do so, the 121.26 call spread a good way to play. >> so twitter next week. you have good quarter.

look at it rather than long stock. >> it looks like our time has expired. options action. meantime, have a great weekend. "mad money" with jim cramer starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's 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. other people want to make friends. i'm just trying to make you some money. my job is not just to entertain you but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. let's see. mix a strong employment report with a meeting called by president trump of some of the top executives in ameri o