live at the nasdaq mark site, kicking off the holiday weekend. don't pack up and leave just yet. the guys have ideas you can put to work when the markets open back up on tuesday. here's what's coming up in the show. >> money will always be paper. but gold will always be gold. >> and there's something in the charts that suggests now is the time to buy it. we'll explain. how would you like to protect your profits at amazon for nothing? >> nothing? >> yeah, that's right. nothing. we'll break it down. and talk about car trouble. gm shares are tanking. and there are signs that it's about to get worse. we'll tell you how you can cash

in. the action begins right now. >> let guess right to it. another record-setting week for stocks, a potential warning sign has appeared in the market. stocks hit all-time highs. treasury yields have been sitting near year to date-lows. what's behind stocks and bonds rallying together? what does it mean for the market? dan? >> listen, obviously u.s. equities are some of the strongest around the globe here. they've kept that bid, they've broken out to new all-time highs. the fact that bonds are rallying now says something a little differently. you take a look at the performance of the s&p under the hood some of the best-performing sectors are pretty defensive. for all intents and purposes the performance of utilities, health care, consumer staples, it doesn't exactly speak to some reflation trade. obviously some of those are due to be bond proxies also. to me, just because the s&p has made 19 or 20 new highs this year, more than they made all of last year, doesn't exactly speak to a particularly healthy thing,

especially when you overlay the fact that persistent low beyond yields the last couple years have been something that equity investors have been worried about for all intents and purposes. >> at the same time low bond yields are supporters of high innovations so there's two sides to this. >> it helps from a dispoint rate perspective. one of the reasons rates remained where they are is because of the economic news we saw. capital goods orders weren't as strong as some had hoped. atlanta fed is lowering what i think were some ambitious growth estimates. the new york fed as well. i think when you take a look at that, the reason you're seeing rates where they are is because basically the forward look at economic growth is lower than it has been. and then of course would be justified. you need to see signs of economic growth and you need to see material signs of inflation which people might expect when you have full employment. maybe that's partially false full employment. you'd need to see that for rates to go materially higher. >> that's what we're seeing at the strong end -- the short end

of the curve. we know two-year money is holding up as 10-year continues to weaken. there's a message there. the real thing is this, that it's independent financials. risk off has been in effect all year long. december 9th are relative performance of industrials, materials, energy financials peak the. they've been underperforming the market basically post-election. and there's nothing that suggests that's going to change. >> so he just mentioned financials and bank stocks have underperformed this year. the xlf, the etf that tracks the bank stocks, 2% versus 8%. a lot of them outperformed immediately after the election like carter said. from december 9th have gone sideways. when i look at goldman sachs, the way the stock has acted, down about 13% from its 52-week highs made on march 1st, in that is a really bad quarter they printed in early april for q1. when i say really bad on a relative basis to a lot of their competitors was not particularly

good. goldman's considered best of breed. backlog is not what people expected. the stock went down 5% the day after the earnings. the thing has not been able to recover. when i look at this i see a big air pocket between 220, not far below where the stock is traded now, 200 bucks, that is the intersection of the uptrend from the post-brexit lows last june. look to q2 earnings on july 18th. i think there's an opportunity for that stock to fill in if you want to call it a gap down towards 200 here. i want to use a simple put spread. option prices are relatively low right now. especially at a time where this stock is trending lower. it's making a series of lower highs and lower lows. to me the trade is pretty simple. look out to july expiration, it's going to catch thatterings event. when the stock was trading at 222.50, you could buy the july 220, 195 put spread, paying $5 for that. that is your max risk, 2.5% of the underlying stock price.

it breaks even down at 215. your max gain $20, down to 195. that may be a little aggressive but here's the other thing i wanted to say about this trade. this stock has outperformed since november 8th versus the s&p 500, up about 22% or so. the s&p 500 up 13%. i have to think the next couple months we are going to get a broad market sell-off. i think bank stocks will be right in the middle of it. it's not just goldman. jpmorgan has acted very poorly also. i think q2 could be that catalyst for bank stocks to go lower. >> mike, do you like this trade and the target of goldman a sacks? >> i like that. take a look at the last quarterly earnings results, morgan stanley trading revenues were doing better than goldman sachs. they have the asset management business that is a little bit stronger as well. if i was going to look at these two i'd rather own morgan than goldman. secondly because dan's trade happens to capture earnings,

this isn't going to decay as quickly once july expiration approaches as short-dated options typically would. i think it makes a lot of sense. even though if you just take a look at it on a valuation basis, maybe 12 times earnings, it looks cheap, 1.2 times tangible book. actually i think this trade makes a lot of sense. >> what's important is it's not specific to goldman sachs. while that is the trade we've got here. if you look at regional banks, if you look at other investment banks and brokers, if we looked at dan's pattern, not only is it that air pocket there that can be sort of filled, there's a minor head and shoulders top forming. and the burden of proof is on the bull. even though they've outperformed from before the election, goldman has underperformed since november 11th meaning it hasn't gone up, it's gone down. >> would you apply this to the regional banks? move more to -- >> i would. i guess what really got me going is the fact that the stock sold off 5%. that was a huge number one day after their q1 earnings.

i think if they put up another quarter that resembles q1 i think this stock is going back there quickly. >> the benefit the throwback, a nice bounce post the earnings. >> to gold. the precious metal hitting its highest level in a month. chart mast are says gold looks pretty good at these levels. >> i think it does look pretty good. let's go look at these levels. figure it out together. i want to start with something that is not about the trade. if you're sitting at home at any point this weekend, you get there on a monday or tuesday back to the office, anyone tells you gold is not an investment, remember these first three charts. it's very much an investment. i have picked nonrandom time frames. this is gold versus the s&p. gold in blue, s&p in organizatiorange. that is november 11, 2007, the absolute peak of the bull market. the winner is -- gold. next time frame. nonrandom time frame. this is a longer-term. what this is from the absolute

peak march 24th, 2000. 17 years ago. and this is gold versus the s&p. you would say, okay, but stocks have dividends. all right, i have that. this is with three invested dividends. and what you see here, yes, we know that dividends are a big part of your total return. in fact, more than -- still, it's a blowout. let's go on to gold. if anyone tells you gold not an investment, you tell them that. here we go. how do you draw the line? long-term chart going back to the '08 lows. what my eye sees is this. i think you have a nice -- call that tension. lower highs, higher lows, something's about to give. a few more contexts. next chart. this is very important. same top chart but the bottom is relative performance to all commodities. so even as gold has been going down, gold's performance relative to all commodities, whether it's tin or copper or nickel, oil, natural gas, cocoa,

pork bellies, is up. that's very important. keep going. next chart. so here's the here and now. i think we have this. here are the lines. okay, we're going to draw them ourselves. sometimes the computers don't work. here, watch this. up arrow. thank you, computer. up and out. i'm long, want to be long, gld. >> mike, how are you trading gold? >> i'm looking out to august. i think you can buy the 121-127 call spread. looking at that earlier, 121 calls were 265, sell the 127 for 85 cents against it, that's a net 1.80, just over 25% of the distance between the strikes. that's math we like. i want people to think about this. to carter's point, as investment, land can be an investment, doesn't necessarily generate income until you put a hotel or something like that on it. investments can be assets. i think that's what he's referring to even though i

haven't been much of a gold bug. if you start seeing investment flows into europe or into emerging marks, away from here that would weaken the dollar, that would be bullish for gold. >> we have started to see that, flows into europe and emerging markets, in the equity performance. do you have to believe the stock market in the u.s. is set for a pullback in order to be a believer in gold? >> well, i don't think so. a really interesting occurrence this week. bit coin got a lot of attention with the surge that it had. but the market cap of bit coin surpassed that of the gld. we know that there's trillions and trillions of dollars of gold reserves out there. but when we think about gld, we think of the inverse relationship to equities. we think about traders using it as a way to position against an equity decline. that surge in bit coin got me thinking about gld the same way you're thinking about it. if there is truth to this, if we are to have a rocky period for equities this the summer, owning that 120, 127 call spread in the gld looks like an easy one.

i like the risk/reward on mike's trade. >> some would like to buy the equities, you get more leverage out of a gdx or gdxj. either way, gold bullion or minors, if there's going to be a move it's going to work. >> tweet options action for everything options action, check out our website and our newsletter, makes for great beach reading. what are you waiting for? here's what's coming up next. >> you want to say something really scary? >> check out shares of general motors. the charge point to even more pain. we'll tell you how to profit. here's what shares of amazon are doing. if you want to lock in gains we'll show you how to do that for free. when "options action" returns. get the latest news, realtime trade updates, a sneak peek at interviews. stay ahead of the headlines and make today's events tomorrow's profits.

cnbc.com/futuresnowe-mail. 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. see options data like never before. with thinkorswim only at 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. amazon reaching 199, a fraction of the milestone investors have been watching. with shares close to 1,000 does it mean it's time for amazon to split its stock? deer ra is in san francisco to break it down. >> that depends.

if amazon wants the glory of a 1,000-dollar stock, a club with only four members, it's a few bucks away. if amazon and co jeff bats zoes want the prestij of the dow, it will have to split. it's four times the price of the currently high-priced price in the dow, 36 times the lowest, ge. since the dow is calculated based on price, amazon's sky high tag would throw the index out of whack. amazon has only split its stock three times since its ipo, the last time was 18 years ago. bats zoes said this week he had no plans for a split any time soon. amazon might have to pay a cash dividend. something that it has never done. that's not a requirement for dow constituents but every name currently in the index does it. again this may also be unlikely for amazon considering bezos has never been shy about using cash to reinvest back into its business. another reason for amazon to

hold out may be the so-called curse of the dow where newcomers often underperform their replacements at first, at least. 2014, apple shares were approaching 1,000, it did a 7 for 1 split, finally entered the dow, then fell 17% over the next 12 months and took nearly two years for shares to hit another record high. alternative alternatively, at&t popped about 17% when it exited the dow. by letting its stock run up, amazon is becoming less and less accessible to younger and mom and pop investors. >> all right, thank you very much deer ra. if you made profits in amazon we've got a way to help you protect those gains. >> the stock is up 32% this year alone. it's gained more than $100 billion in market cap, trading at all-time highs. about ready to ring the reg jer. a lot of retail investors are focused on that. how do i use options to protect my gains in a stock that i own? buying puts can be a drag on

performance if you do it too frequently. one strategy to buy a collar against your long stock position. what are you doing when you're buying a collar? selling an ouch money call and using the proceeds to buy an out of the money put. basically you're interested in protecting gains but you're looking to do it for a minimum premium outlay rather than just buying puts which cost you, and you want to do that oftentimes for no premium whatsoever. but here's the big thing about when you're buying a collar. you have to be willing to give up some potential upside to have that potential downside. let's go through what a cash list collar would look like. amazon, back in 2011 to 2013 when the stock doubled, when it doubled again in 2015, '16, it was about aws, cloud services. now it's gone parabolic and people are talking about other things that are happening in the future. the way they use data. machine learning. that sort of stuff. let's move forward. this could be one reason why you want to protect the stock here. i look at this breakout level at

850 as something that could be in the cards if the stock were to go down. versus 100 shares of stock at 992.50, you could tell an august expiration 1045 strike call at $26, use the proceeds to buy an august expiration 950 put, that would cost you nothing because each option costs 26 bucks, selling the call for 26, buying the put for 26, you would have gains in the stock up to 1045, that's where your gains are capped. protection down to -- losses down to 950, protection below that. that's what you would use a cashless collar for. >> what do you think of dan's trade? >> i really like this. normally with collars what you'll often see is that you have to buy a put further out on the money than the call you sell, then you have less potential upside than downside risk. that's not true here. in fact at the current stock price, this is a very favorable risk/reward. i have a hard time imagining

why, if you own the stock, you wouldn't be considering a trade like this. it's actually very much like a essentially extrinsic premium-free call spread. i do like the trade. >> a couple of things. start with the thousand dollar level. i think it's a completely arbitrary thing. i know for a fact that management does not look at that, couldn't care less. i don't think it excludes the retail investor, you can buy one share. talk about the prosects of going higher. amazon has had two major drawdown in the last 24 months. 2016 at the beginful the year down 28%, twice the market. preelection it was down 17. this is about when that kind of thing can happen again. having a defensive play in what you're doing, it makes a lot of sense. >> what happens if the stock moves up? >> great question. one of the things, say you own it coming into the year, you're already up 33%. if the stock went a little above that or whatever, again, this is one of those major bullet points. you're willing to give up some upside for protection to the downside. the way i see it, below that 950

strike, you do have an air pocket down to that breakout level. who knows what were to happen, if they missed q2 earnings, i chose august expiration, it's going to catch thoserings and possibly some excitement in the market. energy stocks having their worst week since mid-march. that's good news for one of mike's trades. he'll tell you why you should keep betting against energy. [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.

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steve, other than making me move stuff, i'm here at the td ameritrade 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. see options data like never before. with thinkorswim only at td ameritrade. two weeks ago, ko and carter bet against and said crude's comeback is short lived. >> it's just this, and we are just in that. i just don't want it. i want to be underweight energy, short energy. >> i'm looking up to september. the 67.5, 60 put spread, spend 3.15 for the 67.5 put, what i was looking at that earlier, sell the 60s against it for 85 cents. >> crude and the energy sector plunging on disappointing news from opec this week. carter what do you do now? >> plunging is the operative word, it is plunging. the real tell was as crude was

rallying energy stocks never were. energy has made a basic 14-year relative low to equities. why can't it be like coal? maybe it's going to get worse and worse, stay away. >> i think we stick with this as trade runs out to september. it's now starting to get in the money. we've got plenty of time and plenty of room for this to drop further. >> dan, is there something to be said for buying laggards? >> no, in this market there's nothing to be said for buying laggards. you keep pressing weakness. >> they said it was time to hit the brakes on auto names, singling out gm for a drop about a month ago, here's what they said. >> gm, 10% down, i'm looking for a move to these lows at 30. sell. >> i'm looking at the june 33-30 put spread, spend 80 cents for that, a small fraction of the current stock price. we have that catalyst and it takes us to june. >> gm's down over 4% in the past month. what do you think next? >> this is a situation where

although the stock still looks weak, we actually need a little bit more time. actually what i would do, we can sell this put spread for about what we paid for it, 80 cents. i'd roll a little further out in time. i don't think all the damage has been done yet in some of these auto stocks. >> that's the key thing, it's not just general motors. ford's under duress, the parts companies, auto zone, the whole thing is under very severe pressure. >> up next the final call from the options pits. hey gary, what are you doing? 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.

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 to "options action." first tweet from matt hale, thoughts on selling a july 21-24 call spread on ssnap? >> it's a matter of if you're bearish or not. the stock was up 5% yesterday in a straight line. i think this stock's going to fill in that earnings gap back

to 24. if that's your belief i wouldn't be selling that call spread. >> would you rather a gld call spread or the sptf put spread? >> we just recommended a gold call spread. obviously i like that trade. but right now with implied volatility, options premiums this low, the s&p trading at highs, i think a put spread on spy is a pretty good trade too. >> i think they're both good ideas. meaning i think you want to be cautious on equities, i think you want to have some gold. >> there you have it, farmer john. time for the "final call." ahead of the three-day weekend. cart they are. >> gld. buy some. >> mike khouw? >> i like the gold call spread and farmer john's put spread. >> mike, i hope you get back from vegas at some point. he's been there a week. >> he sounds roughed up. i don't know what you've been doing all week. >> the goldman thing is the

stock is right about where it was when it reported q1 earnings, hasn't bounced a lot, look at july put spreads. our time has expired. thanks for watching. i'm melissa lee. happy memorial day, have a safe holiday. see you back here on tuesday. >> announcer: the following is a paid presentation for the worx air, brought to you by worx. prepare to be blown away. [ whirring ] you're not looking at an ordinary blower. there's no cord. there's no gas. it goes where no other tool could ever go, does things no other tool could ever do. it finds every kind of dirt in every kind of space... and makes your whole home cleaner in just minutes so you get to spend more time enjoying it.