>> hey there, on this friday afternoon, following a busy day for the markets, the guys are getting ready behind me and here's what's coming up on the show. >> that's what traders were saying about snapchat's ipo, but the offering has traders looking at the another social media stock. we'll tell you. >> the bond market is doing something very strange. it could signal the next contrarian trade. we'll explain. and missed a run at disney. >> darn, darn. >> relax, we have a way to buy shares of the mouse house for less than a buck. we'll show you how.

the action begins right now. >> let's get right to it. it was the best day of the year for the dow, despite the rally there are signs in the bond market that not everyone is getting on board. let's get on the money right now. what do you make of it? >> i think in an environment we've been in, we have banks moving, they like the fact that rents have gone up but haven't moved up a lot of late. you have a 10-year yield at 2.5% but they've both been basing for all intents and purposes and they could move together on a breakout higher. to me i think the problem you have here though is that there's nothing out there in the week we saw the fed that suggests that these guys are going to get hawkish too quickly. it's set up for something you're looking at. >> i don't know about the fed getting hawkish the fed really will influence the shortened of the curve probably more than the long end. when people are worried what the

longer rates are going to do, we're looking economic growth and deflation. we have a pretty good looking jobs report but that's one jobs report. revisions could follow and it could be a revision downwards. bonds were quite weak now for a while. we've had a very good move in long-year rates and it would surprise me if they doesn't stabilize or go lower while people are digesting whether trump will mean real growth. >> the headline number was upbeat, 227 but we know back two months net readvised down. it was all about wages, no movement in what would be the average hourly earnings or workweek. it's also a tell we've been stuck in this range for a long time. what's going to get us out of this range? i don't think anything for now. so while everyone is expecting higher rates, i think maybe it's time to be contrarian and expect some give back in long end. >> you say the bond blood bath

could be coming to an end. >> let's see if we can figure out together. i've got the 10-year yield, you can see that here. let's see, you can draw lines like this. you can clearly say that has that look to it. but in many ways if that's the neckline, it's sort of completed what it's supposed to do and gotten back to the high. you also could draw the lines like this. and what i'm thinking, not only have we completed this at a different level but we'll give back a big part of this so-called trump or post election move. were we to come down to trend, that would be a move to about 215, the low was 1.3 and doubled to 2.6. that would take you down to 2.15. 2.15 not a random number. here's a long term chart. 2.15 after this breakout, you

revisit before going again. a pull back to trend, that's 2.15 as well. 2.15 is exactly a give back on the short term trend and 2.15 is where you would be were you to check back the point at which we moved higher and so here is the tlt, it's the resip pro cal. this is the inverse of yields, what my eye sees. take it away, put it back. think we're going to bounce here, bounce here i'm anticipating a little bit of a bounce here. short term chart, it's not random that we held these lows. this is the tlt. i think we're going to work our way like that. which ultimately would be the same thing as a move in yields plus minus level. >> mike, are you bullish as well? >> for the reasons we just discussed. we're not going to retest those ten-year rate lows within the

last ten months, looking at 1.45 or something like that. but i think we're in a show me state as far as the bullishness and economic growth forecast that seems like a lot of investing world took on after the election. people are getting skittish, that would be bullish for bonds. one important note, bonds don't move around that much. although options premiums are cheap, there's a good reason they are. even though at the money call doesn't cost this much, i'm still looking to spread the trade. with the april 1.20, 1.26 call spread and you could spend $2.35 to buy 1.20s and sell the 1.26s and that's a net spend of 1.70. we're look at over 1.5% of this level, three months for this to play out. that's the way you make your bullish play. >> do you like this trade? >> i do. you make a great technical case for this. the jobs number and fed.

when you look at this, you're looking for a check pack, not this balance in the offtrend in rates. mike's trade targets that check back to a 2.15. that being said we get that then they start going higher again. at some point i think there's a lot of people believe there's no stock market bubble, it's a bond bubble going on for years. at some point it has the potential to really overshoot to the upside. think back to may of 2013. where did the ten-year yield get ages ago, 3%. the stock market was much lower than it is right now. at some point the investors will want to see rates -- >> look, you can never get anyone to do something when it seems so obviously wrong. no one wanted to buy crude at the bottom. over the last six months, no one wants to sell it. no one wanted to buy banks, now can't get them to sell it. no one believes rates are going lower. take the road less traveled. >> to your point, considering the kind of move you could

potentially see, we've seen it already. we saw 100 basis point move in no time. the idea you want to get net long bonds, that's just plain stupidity. you're taking massive risk for minimal reward. but the option trade actually let's you play for that small bounce without risking great deal. >> short term, does this mean you think financials will also stall or lower? >> this is how you can see the chart. the side ways action at rates is the same thing. even today with the so-called news that maybe there's going to be a change in the environment, banks have not made new -- they are kind of stuck in that range. >> moving on to another big story, snap chat filing for an ipo and many comparing it to the likes of facebook and twitter. josh lip ton has the details from san francisco. >> melissa, some investors might think of snap as the next social media superstar and immediately might draw comparisons to other tech companies focused in this space like twitter and facebook.

snap describes itself in different terms though, in fact, in its filing, snap calls itself a camera company and word camera is highlighted almost 80 times in that filing and that could draw a quick comparisons to gopro which investors might not appreciate, disappointing results this week. still let's look at snap and its performance does stack up with twitter and facebook ahead of their ipos. revenue, 404 million and twitter 317 million and facebook 3.7 billion. as for who lost and made money, snap lost 550 million in 2016. twilter lost 79 million the year before its ipo in 2012. . facebook raked in net income of 1 billion in 2011. when it comes to users, snap only disclosed daily active users in its filing, 161 million. twitter had more than 100

million at the time of its filing and no longer provides that metric. facebook, 526 million. the grand hope for snap bulls is that the company is grown into the next facebook. many are comparing snap more closely to twitter. ryan weisser says snap like twitter still a relatively niche platform and snap will best maximize the value by continually improving the core product for consumers and advertisers, not trying to be u bik tous for its own sake. >> dan over here is suited up to -- >> what do you mean? >> these are my snap spectacles i ripped off my 13-year-old daughter. it's really interesting, go back to 2011 and lead up to the linkedin ipo and facebook ipo and 2013, twitter and alibaba, we heard the same sort of

neysayers about those ipo. they were all sort of niche, snap chat is obviously very niche, but one of the interesting things, they see themselves as something very different, a camera company and the growth opportunity for a company that already has 158 million monthly active users is the fact that it is niche right now and really tight demographic and they can go a lot of places. i do see the similarities to twitter of those group we just mentioned, the only one that flamed out for all intents and purposes, $25 billion valuation for this thing. >> flamed out in the long term is the reality. let's not forget facebook after the ipo traded on the bid and looked terrible. it was labeled -- >> that's fine, the question for people looking at tht ipo should i be buying about that time? i would issue this caution. we've seen that exercise before. the long-term story doesn't mean

you won't face very significant short term pain? >> is this good for twitter? >> when people think of snapchat and limited financials we have right now and history, twitter, $2.5 billion and 12.5 billion market value, $10 billion enterprise value, i think you can make twitter look really interesting. thursday morning before the opening, 10% and moved on average 13 quarters since public 12.5%. what's interesting to me here is that the stock is up 8%. there's only five buys on stocks 28 holds and 8 sells and a price target of $16.5 below whether it's trading. that looks like a disaster. i wouldn't be buying the stock here. i think the quarter is going to be good and guidance will be bad. the run-up to the ipo could be good for this relative valuation. here's the thing into the print.

i think you could look to a risk jun expiration sell the downside, june 15 put and use the proceeds to buy the june 20 call for $1.15, cost you 35 cents and gives you leeway, the market five months or so, that stock as it goes up towards the long call strike you'll make money and as it goes down to the short put you'll lose money but the worst case scenario the stock at 15 and i think you want to -- >> all you can say is what this is, it's a trade, there's nothing wrong with that. as an asset and premise, it's uninvestable, $75 and here we are three years later $17 and one way story. down and to the right. at some point can you make a trade? -- >> there's a bit of an exception to that. around this current valuation of about $12 billion or so there has been this very tepid

response. every time it's gotten down, you've done this trade several times and several times it's been successful. i do like just simply because relatively speaking, social media property value -- >> people aren't going to get enough snap. >> somebody will figure out how to make money off the thing. >> to keep -- >> maybe, are you putting bunny ears. >> and puking rainbows. >> if you have a question out there or check out our website, options actions.cnbc.com. we have this week's super bowl winner. want to see if you're listening. 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. how would you like disney shares for less than a dollar?

>> okay, folks, it's a deal. >> you've got it, micky, and we'll show how to you to do it when "options action" returns. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.

what?pony neighing] hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. welcome back, i'm julia borsesten, it's a busy week with a slew of reports. fox on monday afternoon and disney tuesday and biocome thursday. hot topics in focus, advertising

revenue, the health of the tv bundle and what trump's presidency will mean for regulation and deal making. fox fresh on the heels of the super bowl will update on the big boost from the big game's ads and could face questions about turnover at the flag ship news network. a record seven golden globe win and 14 oscar nominations. time warner will focus on what the telecom giant is getting in that deal. and viacome is likely to community on the turnaround plan from paramount last year. the biggest focus will be on disney, reporting after the bell on tuesday with lingering questions about the future of espn and disney media networks division, four of the top five films of 2016 and number of bill

film franchises ahead. last quarter ceo bob iger was confident espn would adapt and succeed over the long term and near term the company deals with issues. we'll see what kind of update iger gives tuesday afternoon. >> thank you very much. with all eyes on disney, how to you play the stock beyond earnings? call to action. >> we're going to talk about the use of a calendar spread. one of the reasons you'll use spreads generally speaking, number one to reduce cost or risk. in this instance we're looking to profit from time decay and obviously always helpful, improving the probability of success. taking a look at this, we can see disney has had a very strong run up over 20% off its recent lows. the trade we're going to look here is going to be leaning in the same bullish direction but only mildly so. this is a stock that moves 6% on average. specifically what i'm looking at is the february/march 1.15 call

spread. you can buy the march calls for 1.25 and sell for 60 cents. you kind of want at february expiration for the stock to run to the 1.15 strike and february options will decay and you'll own the marches for just a net cost of 65 cents. this is basically a trade to the upside looking for maybe a four or 5% move which is slightly less than average. >> do the charts align? >> it's come a long way day to day. if you advance 90 to 1.12 it's fairly mature in terms of magnitude. 12, 13, 14 weeks in the making. the one thing it's not a popular stock on the street. you've got a price target on wall street only a few dollars higher than it is now and you've got analysts equally split between buys and sells, 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 earning and now 17.5 and people can't get their arms around it. i find that interesting. weaver n we're not looking for a breakout situation but it is trading at a discount to the market. espn is a strong brand for anybody who has cut the cord. i tried this. losing espn is a tough thing. i had to buy right back. >> the stock incorporates a little bit of iger's past comments saying espn is going to adapt and a lot of enthusiasm about the star wars release. with the trade structure, you can tighten up a little bit. and then you're setting up for a move later on. it's got to consolidate these gains but the strategy makes total sense. >> that's a very good point. on the regular options what do you have, five dollar strike? you can go 1.10s to the downside

or 1.15s to the upside. i was taking a bullish stance. >> ups shares getting hammered this week, great news for dan who more than doubled his money against the stock. what is he going to do now? more "options action" right after this. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade and the wolf huffed like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe.

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so we know how to cover almost alanything.ything, even a "truck-cicle." [second man] how you doing? [ice cracking] [second man] ah,ah, ah. oh no! [first man] saves us some drilling. [burke] and we covered it, february fourteenth, twenty-fifteen. talk to farmers. we know a thing or two because we've seen a thing or two. ♪ we are farmers. bum-pa-dum, bum-bum-bum-bum ♪ hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias.

get help on options trading with thinkorswim, only at td ameritrade. welcome back, time for total recall. last week dan said ups would under deliver on earnings. >> i would look at february expiration with stock was trading 1.17 -- you could buy the 1.10 put spread in february. >> here's a situation where the setup looked obvious to me. when you go for something not like mike's calendar, go for a put spread at the money short dated into an event, that means you have conviction and the thing worked out better than xpek expected. you move on and the difference between what you paid and what you made just to kind of get the last few nickels in, doesn't make a whole heck of a lot of sense. >> you paid so quickly, take the

money and be happy. >> now to facebook, carter said the tech giant could hit a new high. >> you're either going to earnings breakout netflix or earnings disappoint, and that. could you say it's 50/50? we're going to bet it exceeds the high on its news. >> you can spend 2.85 cents, just a small percentage of the current stock price to buy the march 1.35 call spreads. >> facebook shares did touch a high after the earnings report but since given up gains. carter what do you do next? >> you get this pop, 1.31. it's that 50/50 thing i'm inclined to stay long. >> we're only risking 1.85 now, if it drops lower and you can pay for the call spread, i would do that. >> what's your take on facebook? >> it was a horrible rejection at the prior high, same thing

with amazon and google. to me i thenk you see lower lowers in the big cap tech. >> final call from the options pits up next. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.

hthis bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me?

anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade big drop in ralph lauren. what do you think of the july 75/70 put spread? >> i like the $2 credit on a $70 put spread. i don't like the stock and you're trying to catch the falling life. >> so no. >> no would be the answer. >> in anticipation of rates going to go lower, buy tlt, get long. >> mike? >> to do so, 1.26 call spread is a way good way to play. >> next week i think you'll have a good quarter. look at risk reversals rather than long stock entry. >> our time has expired. i'm melissa lee.

check out the website, optionsactions.cnbc.com. meantime, have a great weekend. "mad money" with jim cramer starts right now. >> announcer: the following is a paid presentation for the nutribullet, brought to you by nutribullet llc. ♪ >> hi. i'm david wolfe. and for 25 years, i've been teaching people, to get the most out of your life, you need to get the most out of your food. all this food is loaded with nutrition, and you don't just need some of it. you need all of it. and the nutribullet is the machine that can get all of it. for a limited time, nutribullet has an incredible offer. when you order today, we will up