avoid drawing too many conclusions from it. >> perhaps this has become a distraction for carl icahn's line of work, if been fielding income iing calls of ceos and business leaders continuing to advise the president, even though he said it didn't happen as often as he intended. perhaps on the flip side, president trump had been getting questions about t that, too. unclear what happened, what precipitate d this, all we have is this letter, which says he is ending his role as regulatory add virz >> thank you michelle kcaruso-cabrera is at the white house. if you wanted a job with the president, you've got a few openin openings thanks very much for joining "fast money" live from the nasdaq, any thoughts on carl icahn steps off this pseudo advisory committee >> what took him so long

>> look, on some level, what we got in the last couple of days is folks that are really both addressing the moral issues for and how it gets in the way of their line of work and then into a political tactician. some jumped on the band wagon late >> you're assuming it's because of charlottesville he says because of the appointme appointment. >> i think that's not, to me, strikes me as cover for what's going on i haven't heard much about what he's done in the last several months to me, he was using that as cover. i think this could have market impack >> "fast money" will catch it and cover it >> absolutely. >> i think it's a slap in the face to the administration i think the it's a slap in the

face considering the timing of it the it's terrible, but i don't think it's going to have market impangt. >> you have something like icahn on the night of the election, said i am buying futures an bought a billion dollars worth of futures that night. now saying you know what, hands out. market's at highs. i think i'm going to take my chips and go home. i think this is going to have market impact on monday morning. >> i don't think think of it as looking at it this way from the fact we had a very sort of you know, a president that was quoing to back up the market i don't believe the markets going to look at this and blink. >> so, we had a number of people resigning today or getting fired. >> so, did anybody do anything today? related to what was going on with steve bannon and gary kohn? >> i did take back a little risk going into a weekend, the overriding theme, i know we

haven't priced in fiscal policy, but we have delayed the white house obstruction is something that's a distraction even for congress bannon leaving means the white house now is four, five steps removes from looking out and denying what they're going to do even though we don't know what his role was so i think going into next week with the technical, the s&p has stayed below this 24, 34 level the technicals and transports don't look great >> why do you need to keep your exposure >> i agree we could see more of a set wak back in the market it's poised to pull back more. maybe 3% the max i think that would be a 5% pulldown from the top. i just say to you, in my view is in general, i don't think the market is being driven on any st of expeck tases here from the administration it's not it's being driven -- sf

>> i realize that. >> this week, it was >> but the market didn't -- >> i mean, listen -- >> what did happen today it rallies, we rally 150 points on the word bannon is out. to bottom's drop then sell off. >> that's not good news. so presumably, bannon being out was good news. you saw the market rally when markets don't hold good news, that's just a bad sign not a political sign just a bad trading sign. seeing the headline, they react to it. they cancel. >> then sellers came in. but there's no volume and no real sort of institutional volume happening now people are on vacation volume is light. i think you just have a little bit of movement there. >> who thinks market opens lower on mond on monday, dan >> i think what these guys are are saying is there's a little uncertainty. icahn, here's a guy who's a real

billionaire, unlike the president. he was probably never particularly cozy with the president. this is the point we try to make earlier in the week where all these ceos who stepped off these counsels he was never part of this club, right? so they jumped on. they had this optimism about what it could mean for regulatory, tax reform infrastructure spending and the problem we have now, it's kaput and now we head into september, we have this budget issue. this is a big issue to me, why i think volatility likely gets dialed up and so to these guy's points about technical, the s&p broke that uptrend >> go around what happens on a monday >> first time here >> yeah. so, to me, i think you just really have to be cognizant. whether you think the it's icahn, the generals, whether you think it's all right guys. this and that and whatever we're at a point where there's a lot of uncertainty >> the market on monday opens lower or higher? >> i don't know.

>> flip a coin same camp, but i think there's probably more downside risk to the market in the near term, but again, just because the next two weeks are big vacation weeks, volume is going to be light and you're going to see people jockeying back and forth >> max has demanded i go around and ask each of you. >> when max says something, you jump because that has got it going on >> opens lower i think this has market impact actually, if we get any type of rally monday morning, i won't be a seller of that like tim, i took off more risk probably up to b about 60% cash now. i would probably raise that higher for my trading. accounts because i think this has market impact the technicals set up horrible and when a market fails on good thus, that's not a good sign >> like it did today >> market will pullback i think but there are things that continue to work if you look at the cod xhmmodit trade, that continues to work. tech continues to work this isn't a time for wholesale

selling by any means this is a time everybody said this, market's going into a seasonal period where i actually think there's more ris b k out there for markets in september than people have priced in therefore, some broader risk where i can do it and volatility is cheap, i can defend against that >> some suggested that with bannon out, that meant gary cohn stayed that this was a battle of wills between two rivals and the fact that bannon is out means that cohn is still around. you buy that >> there's no way gary cohn was going to leave this administration period. it's a massive number that he's saying >> you think he's conflicted >> the power struggle, donald trump, president trump, needs gary cohn around much more than he needs bannon around and gary cohn wins the game hands down.

>> for more on trump's wild week is the one who broke the news this week and that cohn was staying. hey, jonathan was it a battle between gary cohn and steve bannon and did cohn win? >> no. they have been in a battle and bannon has been trying to destroy gary cohn for months now, but the primary battle was steve bannon versus jared kushner. it morphed really into steve bannon, let's go inside his head here for a moment. it was really steve bannon against the people he describes at the globalists, west wing democrats he used for them that is jared kushner, ivanka, hr mcmaster, gary cohn, the top economic adviser and dina powell, the the deputy national security adviser so bannon has been at war with them for a long time

jared won the war. kelly came in with a mandate to put more order into the west wing and he was told when he went around the orders that bannon was a major destructive force in there and he was also told by people in the wing that blamed d the outside campaign against hr mcmaster, they plablamed that oo steve ban p. rightly or wrongly, he was certainly told that bannon was driving that >> so, gary cohn is staying. there have been lots of rumors that he's demanding he be nameded the head of if p federal reserve very soon. are you hear iing about that zp >> that doesn't square with what i understand i'm sure he would like the fed chair job when it comes up u, but he came in for one purpose and one purpose only and that is to be the architect of transformational tax reform. he sees this as a huge generational opportunity for tax

reform he wants something like 1986, not sort of milk toast rate cuts, something that changes the code and takes the corporate rate down really, really low most people don't think that's achievable most people think that's a fantasy, but that's what gary cohn wants to achieve. >> what about carl icahn resigning from his never formal position how do we read that? related to charlottesville, it's not? what does it mean? >> i have no insight into carl icahn's motivation,s, but it comes as a really for trump, unfortunate moment where cor corporate america scrambling to distance themselves from this president. so for one of his closest allies, friends, to come out with a statement like this, all though the statement doesn't condemn donald trump in any way, shape or form, it does seem like he wants to divorce himself from the trump administration and

that is not a good signal for corporate america. >> back to steve bannon in a number of places "wall street journal" editorial page pointed to bannon as one of the causes of the constant drama that we're seeing in the white house. with bannon gone, will the white house run more smoothly or at least appear to run more smoothly >> there's also this guy called donald j. trump, which is a relevant feature of this white house, so, yes, steve bannon is a master of chaos, he is what people don't really understand about bannon, there are these sort of absurd caricatures of bannon that he is this player of five dimensional chess and everything is a reason that is brilliant, guys, very smart, but he's quite sham bolick and never had a huge fully functional staff he basically was this guy who came up with idea, sat in his

office and usually put the ideas in donald trump's ear and didn't really towards the end engage in proper process >> but can bannon be a scapegoat and can trump regain moral authority to lead? it's that simple because you can blame it on him. blame charlottesville on him and maybe yet again, distract people back on track. >> that's crazy because charlottesville was donald trump. trump was happy with his responses to charlottesville he doesn't think he made a mistake with his response. he thinks it was right thing to say and he tripled down on it. bannon spoke to trump about it bannon and trump spoke three times by phone according to my reporting about this, but bannon wasn't like a puppet master telling trump what to say. this was pure trump. >> okay, thank you jonathan swan. let's trade it kind of already did, but let's discuss more anything new there >> jonathan said about this, this was pure trump and it wasn't bannon necessarily pulling the strings.

i think is what the market saw this afternoon so you had that initial rally and i think people, initially, there was that relief that okay, maybe tpuppet master is gone. >> then the question is can he do more damage through breitbart. they were talking about this through mcmaster cohn was on there with two globes next to him, on tuesday and thursday so if he can't control them, they're going to go after these people in the white house, it's going to be difficult to get around an agenda so as far as tax is concern, if you're optimistic about that, let's not forget they both said they're going big or going home. they want a big, big tax cut here and you know what, when they came out in april, they wanted to talk about tax reform. they had a one page bullet pointed think. the problem is now, they have three parties in congress. and that's a fact. they have alt-right group then

the democrats. >> scott wapner has more on carl ica icahn's i don't know if you can call it a departure because it was never an official role, but it was an informal advisory role on regulation and now, he's not going to do it anymore what do you know >> i think it's significant, michelle, for no other reason that you're talking about one of the earliest and most hardened supporters of donald trump you're right the it was never an official administration vote. it was an informal advisory role, but the criticism of that role sort of you know, it gathered steam over the last many months. elizabeth warren and some other democratic senators have been criticizing his role almost from the get go because of what they said was his and their term, his sprawling business empire and the unlimit portfolio that he had and could influence the president to help out you know, him, in ways that were ak

conflict of interest it mostly centered around some of his energy related things and this renewable fuel standard rule, which icahn has long maintained and has called it stupidity. he said that he is only going to discuss broad matters with the president, those are the exact words that he used today in the letter that he sent. to president trump but it's just interesting given the week we've had that this happens today from somebody as prominent as carl icahn stepping away from what was an inforadvisory role. >> thank you very much, scott. calling in based on the news that carl icahn is leaving his role to president trump. l regulation and deregulation was supposed to be one of the corner stones of the trump presidency and was also supposed to help

out the markets. >> so, the lack of regulation, we still have. and a lack of continued enforcement has been taken off the b table. we've seen -- going after the financial sector i think though this week, it should not be understated what happened to the business community's support and as scott pointed out, carl icahn was a fierce and early supporter they are going to now take stock and be careful about their next move and i think business confidence was important and i know it's just confidence, but it is a leading indicator. i think this is something that will weigh into the market in the next few weeks >> i think scott's right to say it's a significant, right, fact. having him resign. from the standpoint of pr in my opinion and also advisory, but i don't think the public is going to look at this and say that's significant, it makes them take their money out of the market. so from a market impact perspective, it's a no impact. >> carl alone is not a market factor as we go into a friday in a

seasonal trend where the technicals are broken. >> two months ago when you put out that danger ahead video, we took it seriously. markets took it seriously. what if you were to take a similar source of stance about markets because ultimately, we have to assume that he's making this very vocal or very you know, optically, it is obviously in the president's face because he has a lot of reservations, so at the end of the day, you know, he may start, he hasn't been on our network for a long time. maybe he starts getting more voe kl about his concerns. >> he did put it out on a friday at 5:00. >> again, you're talking about a guy on the night of the election said i am buying this stock market to me, this is effectively him taking some chips off the table. so i do think this is going to be to have a market impack a market player. who has had a lot to say about the president's agenda and how it's going to impact the economy and now, he's not part of that so, for me, i do think this has major market >> i think he bought the market because he believed, he knew,

he's a trard, he understands that -- >> he's a trader now and selling. i follow billionaires, man >> i'm not arguing with that i think he was right to buy the market aggressively under those scenarios because the tail wind effect is -- >> you're assuming this press release that he's leaving means he's selling >> i think the it's a signal he's not happy with what's going on in the administration and extrapolate that to the economy. a guy who's happy with the administration and buys a billion dollars worth of future, then several months later says i'm no long er part of this administration, i don't know if he's selling i have no idea here. >> probably isn't. >> we got to assume he was out months and months and months ago with that short-term trade we haven't seen any high frprofl stakes he's take b innen new companies. he's been pretty quiet probably for good reasons, so we u just talked about it. optimism is that soft data for all intents and purposes jobs, jobs, jobs, they've been

running at the same rate they were at in 2016. we're not seeing a massive uptick in growth if he was concerned 18 months ago he probably with the s&p 30% from two years ago >> that group of corporate leaders that were arm and arm with him around that horseshoe table, bottom line here is you've got a case where corporate leaders were holding their nose on a lot of things on the personal side with this president. whatever toupt say, that's my view of what they're doing they're business leaders and were tired of the old environment and it had to change at that election, it did and that's what the market has applauded. now, the question is, how retarded how that process now become because these guys have had to step back because they had to >> they signed up, too there was a honeymoon period everybody was shocked. >> to me, it's a psychological impact which i think is what you're

getting at it's a psychological impact and exactly what you're saying, an exclamation point. we've lost everybody this week carl icahn is probably the final straw. >> let's listen to what he said on president trump's inauguration day >> donald surprised me coming on so strongly about the establishment. i add himire him for doing that. not just trying say, well, let's smooth it over let's be buddies he came on extremely strongly and he's giving you a look at what the future i think is going to be. i think it's going to be a confrontation to some extent and i think that might be a good thing. because it's going to really promote change which you have to have in this econo economy. >> it has been about confrontati confrontation. he was spot on >> out of the gate, when he was elected, the whole, it wasn't necessarily about change it was about the hope and eck

peckation of change. i don't see much upside from here from in general to your paint, his resignation of these people from his administration, i don't believe that change s the narrative. we're not going to get it. we're going to get tax cuts. it may come early next year. so, the market is just hoping for a thread of good information. earnings are driving the tape and there's no tax baked in. no tax reform baked in >> you think we get a tax cut though >> i think a cut happens possibly next year at some point in time. i don't think it's going to be -- we're in the getting reform >> we had a guy on today who thought actually you can get somewhere between 15 and 20% because republicans in congress who need win need to -- >> midterm elections are suddenly -- >> coming up, home depot getting

crushed and something in the charts spells even more trouble. how bad it could get here's what else is is coming up on fast. >> snap out of it. >> and that's what shares of snap have done, posting their best week in four months we'll tell you what's driving it plus dpsh. >> when visitors hang up >> but don't hang up on shares of at&t because we have a way to keon ith gupdown or nowhere at all. we'll explain how when "fast money" returns

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zblncht shares of snap soaring today after nbc's stay tuned show has brought in 29 million viewers since its july debut 60% of those viewers under the age of 25 and 40% watch it at least three times a week who says kids don't like news? still, snap shares are down more than 17% since march, but for these new show collaborations and growing appeal to the audience be enough to turn the stock around >> i think there's no doubt about it i have a young daughter, 14 years old, this is how she gets her news think about what social apps, you want to give people stuff where they are and that's how

you monotize them, so here's a company that had 173 million daily active users in that last quarter. people don't love the growth it was 21% year over year. i want to see how these guys are going to monotize the users they have and to me, i think there's a trade here before the next lock up, so to me, i think you see this back. i bought more today. >> i think snap chat is going to have their lunch eaten, i mean, facebook, facebook's going after their jugular and they're going to continue. it was ten bucks that was the line in the sand. it got down to 12. this is great news, but q3 numbers don't go high. theyations game. time for the final trade around the horn. tim. what was that? >> i have a friend happy birthday what's your final trade? look what daddy -- there >> tim's daughter. >> toyota. on a weaker yen is what i was told >> okay.

bk >> happy birthday buy netflix. >> buy it. >> dan >> room to the upside. >> that does it for us catch us monday. options action start right after isreak finally. hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management.

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louiwe's this week and there's something in the charts that suggest more pain. >> let's get to it because while the s&p is falling more than 1% in the last month, the so-called safety sectors are rally lg. telecom and utilities up more than 4%. ooempb consumer staples, managing to eke out gains. if volatility picks up, is this where you want to be dan? >> it's interesting because you know, we useded to auk about interest rates we thought we were in rate increase cycle here. fed fund futures are pricing less a 35% chance of a hike in december that's why you've seen these rate proxy names come back to life telecom is an interesting one. we know there's some pretty fat dividend yields there. t we lookeded at utilities here, staples are acting well. so at the end of the day, if you're looking for safety trade, if volatility is going to pick back up, it makes sebs to look at some of these ones that are

with some decent yield >> michael, what did you do? >> one of the things that's interesting about these safety stock, you were talking about vol kags voluation, they're different in this space you can look at names like staples and utilities. uations are higher in the telecom for example and if you're looking for yield, the latter one is where you're likely to find it. >> there's no great valuation frankly anywhere in the market u utilities are near historic highs, so, too, for staples and teleco isn't a sector. they love at&t >> only like three stocks or two. >> it's like coke and pepsi. it's tmvz. so the question is, can they continue to generate the cash flow and they buy things to do this they do whatever they have to because no chairman wants on their watch, i cut the dividend at&t so they're just going to keep desperately trying, but as operating businesses, i mean -- >> to the point, one of the

things you should look out for if you're looking many stocks is when you see high dividends. very high yields that often can be a warning sign, actually it's the market telling you it might be unsustainable >> you're trading at&t >> i'm looking at at&t, the it's a stock i bought close to 36 about a month ago prior to the earnings it's important to think about why we're buying stocks in a market that was f all time highs. this was year 52-week lows i was thinking about something fundamental. that yield also, so, you know, to me, i think this stock sets up pretty well if you believe the fundamental story, that gap you see there a few weeks ago, the stock was up 5% and then here's the other thing. "wall street journal" reporting yesterday they're time warner bid for $85 billion bid, i liked this this is the reason why i was doing it if we get more clarity on it, i think the stock is going to rally. i'm long the stock i bought more today. i think there's an opportunity near term to sell against my

stock and do a buy right and add additional yield this is a stock that has an annual dividend yield of 5.2%, so today, when the stock was trading at 57.5, say if you were to buy 100 shares of stock, you u look out to october expiration and sell one of the october 9 calls at 38 cents. you have a buy right on. your max gain is up to $39 in a stock of 150 if the stock is 39 or lower, you take this that 38 cents, in two months, that's a 1% yield or just yield in general and if you annual liz that, it would be a nice yield on top of the 5.2 gives you a buffer to the downside and i think it's important to remember that this is long stock, short call. the stock is going to pay a 49 cent dividend in october, so i'm eyeing a move back towards the 40 range if i get to october and the stock moves up to 39, i'll roll that to a higher strike, so to me, lock stock, short call, sets

up well. it's a super yield trade in a name that's beaten up. z>> in yield trade, typically, n high dividend paying stock, you're not expecting the stock to rocket hire which is one of the reasons you might look to sell upside calls. xuan time, you'll find that the premium u is low actually sxwresingly in at&t, the price is up a little bit recently, which makes this somewhat more attractive from a yield trade perspective, that makes sense >> dan respects price action and what i was thinking, this is a stock that had a 52-week low >> capped up, and now, he's buying the check good technique the question is, the upside is about a buck 50 and downside, so the question is is, do you get the next reasergs.

>> sitting in the middle of thosedefined >> this is a sleepily friday not much going on. this is a starter drug trade for equity traders here. so you own something, not going to sell it you look out, sell calls, in a premium. if you knefeel it's going to rocket, you cover the call so to me, this trade gives you optionalty on your long equity holdings >> let's move from the starter drug to the opioid now, to deere. this is rival cat perpillar rallied 1% carter, you say deere's pain could triple down to its dow counterpart. why? >> we know they're related it's not these two specific. let's look at a few charts inferences are based on evidence but it's also a presunlgts

so want the to do this rapid fire i'm going to go through fairly big industrial conglomerate names. cummins, 25 billion. market cap, it's clear uptrend. there's your break in trend. to the next stock. ingersoll rand clear uptrend and now, here is a breaking trend i'll just give you some nice red arrows next one, here, we've got two works. 48 billion big uptrend. here's your trend line your breaking trend. there's a pattern. yeah, keep going now, a big deal. this is 80 billion things in the world. uptrend. here's your trend line here's your breaking trend keep going flavor of the day. deere. uptrend. here's our line. ready. breaking trend all gapping. inference. here's caterpillar here's its trend it's the only guy holding up, so

either their miracle or going the same way i bet you they're going the same way. pretty simple. >> what do you think >> caterpillar is an interesting case because this thing is trading not far off its all time pique valuations it's rallied strongly. had a great year, but it's earning about 40% of the revenues now than it did in 2012 60% lower eps. if something's going to set up for some weakness, companies with lef rrev lichaj companies that are cyclical trading close to pique valuations when maybe fundamentals don't justify it. to me, those are the ones that set up for a potential pullback. ooichl inclined to go along with carter here. i'm going to buy a put spread to do that. october 115, about four and a quarter. sell the 100s for 60 cents spending $3.65 for that, which could be worth as much as $15 if it went to the maximum value of the spread

only laying out a small amount of premium and giving myself some time for this to play out i think there are plenty of things that could make it play out. >> the trade itself, i like the structure, the fact it's in the money here you're giving it, the stock has been range bound for a month or so, so it helps you u stay in the game a little bit. when you see a competitor have a gap, that was a nasty break down it could be you know, it could be telling a story about some of these multinational industrials that you know, maybe things are not as good as you think >> cat is more multinational it's much more focused on construction and mining than deere is, which has considerably more ag and forestry type businesses, therefore, it's more volatile and vulnerable. >> how closely do you pay attention to what's going on with xhod theties, particularly with caterpillar >> it's all related. >> than deere. >> has nothing to do with the key commodities like copper. iron ore and aluminum. but it really, yes, deere was

the one that broke, but every one of those other stocks on their earnings broke cat has come right back to its all time high and it's somehow defying what is going on generally speaking in industrials. whether it's big industrials like ge or the transports can cat just go it alone probably not >> if you're long the stock, the amount you're risking is a fraction of the gains you've had this year. a very small fraction. why would you not think at this point. >> much more apgss actioptions still ahead. here's what's coming up u. >> they're selling mortimer. >> stocks just posted two back to back weeks of losses. >> sit back. sell, sell >> don't be so dramatic. because we have a way to protect your portfolio plus, calling all options action fans reach into your pocket, grab your phone and tweet us your question if it's nice, 'lwel answer it on air when options action returns. >> logically [pony neighing]

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anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade welcome back we've been reporting on and talking about lack of volatility in the marketplace for months now. but over the last couple of weeks, things have started to get dicier while today it wasn't a loss of 1% or more for the dow, yesterday was and it was just the third all year we came close last week on the heels of all that north korea tension. to put it in perspective, last year, there were 24 types the dow had a 1% or fwraeter drop. in 2015, there were 34 such instances. for the most part, this is still the buy the dips, shake it off kind of market there are though fears we could

see a reversion towards more volatility take place. now, in fairness, stocks aren't even close to being in panic mode there was a time when some of the geo political shocks seemed in markets would lead to much more than a 2% pullback, but there are some traders who look at the recent price action and of course, bets being made by hedge fund managers like bill ackman on more stock market volatility they're perhaps getting more cautious than lately >> so, if you are worried about more volatility, how can you protect yourself mike's at the plasma with the call to action mike >> thanks. so, although we had a slight bump up in volatility, really, we haven't seen that much yet. so if you are interested potentially and want protection, that's when you might want to consider buying a put. also, if you're anticipating more volatility, are these moves we've been seeing recently a sign of things to come and

finally, options prices are low. they're ali l higher than they were, but they are still quite low. so we can see obviously the dow, we were talking about dow stocks earlier, had quite a rally this is a small little move to the downside that we've had here, so i still think that if you're interest in buying protection in your portfolio, you have the opportunity to do that i'm looking out to december at the 210 puts, you can spend $4 to buy those less than 2% of the price of the diamond etf right now, so an inexpensive way to give yourself a hedge to the end of the year gives you a little bit of leverage in the event we see sharper moous for the downside >> there's the trade what do you think of it? >> het him go on the charts fist >> nothing's happened. think about it we had an all time high. a week or so ago tuesday, s&p was what, 24.90 spot 87. sticking that number in my head.

here we are down 2.6%. i mean, it's like nothing's happened and the feeling is though the market died. this is just a salvation of what could happen and it's all depending upon a few vix stocks the five in the s&p. the bottom is 250. and that's going to determine -- measure of what happens. >> not every constituent of the dow jones industrial average has rolled over yet. we were talking about one of the big ones caterpillar. there's only 30 stocks in this index and one of them is still trading right up there obviously, a pullback in a name like caterpillar, that could help general volatility in the market and also, listen, when things start to turn over, you said correlation wise that's when products like the diamonds, like the spy, the qs, are going to behave much more sharply than they have typically in upward moving markets >> what i like about this, why i wanted you to go with the

charts, what i like is if you have some of these doe winners that have appreciated a big deal, 210, your strike price is really the level where it broke out and that's where you want protection for and here's the thing. we've been lulled to sleep how many times have we had a 1% drawdown this year twice or something it can happen at once and then you're going to be scurrying for protection so i like the idea of this if your long is 210 and near 210 then you want to pred that by selling a lower strike put, take that off the table the likelihood of it going below 200 is not great anytime soon and that's one way you trade this >> consider that if implied volatility in if the vix was around 20, you would eck pecht the move on average each day to be about 1%. >> we've had two instances this year so we're talking about this is happening every 2% how about it started every 20% >> what do you think about russell? that had a much bigger drawdown than the spy >> that's 2.6. the s&p equal weighted is down

3.3, so it speaks to a few big names. a week or so ago, the dow had eight a, nine, ten days in a row. it's a lower index when the dow was start tog outperform, that's a defensive kind of thing. because people are wanting to be b in those safer blue chip names, but a lot of them have had no ground. like boeing hasn't cracked yet mcdonald's hasn't. >> all right coming up, home depot seeking 5% in the last week and there's something in charts that suggest more pain on the way we'll wraek it down when options action 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. see options data like never before. 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. home depot shares fell this week that's great news.

here's why >> on options action, it's how we build sturdy profits. risk less so we can make more and that's what ko and carter did with their bet on home de t depot. carter say -- >> so i think the next move is down and i want it against home depot having rallied steeply going into its earnings >> but just shorting the stock that could lead to mass destruction. so, to make a bearish bet, mike sold the september 155 call for $3. $3.40. mike needs shares of home depot to stay below $155 above that, profits trade low. until home depot rises above the call's strike price by more than

the $3.40 he took in by september expiration however, mike will be vulnerable to infie anytime losses. he brought the september 160 call for 140 and created his bear call spread >> see what i'm getting at >> not even close tim >> now, between the $3.40 he cleked by selling that lower strike call, and dollar he spent buying the higher, mike still pogts $2 that $2 is the most he can make on the trade but to keep all of it, mike needs home depot shares to stay below $157 by september expiration above $157, losses do kick in, but they are limited to the difference between the strike of the call that he sold and the strike of the call he bought >> little clearer now? >> less than ever, tim >> we'll make it real simple for you. mike can now do something even the handiest of men can't do

not exactly. but he can make money whether home dee toe goes down, stays flat or even goes slightly higher and since the turn of the trade, shares have fallen nearly 5% and now, options action fans are all over the world want to know just one thing. what will ko and carter do now >> what do you do with that trade now, mike? >> you know, we've made essentially all the money you can make on this tlad. there's the tactic, happen to be short, but there's a structur structural hit a high of 160. given back little. it's hardware. and after all, if things are getting in trouble, home depot is not immune from it. >> this thing, you could buy it

back for 23 cents a day, take your profits and roll out to the october 145 put spread and you're playing with -- >> so, mike, you went into the event and knew prices were elevated you got it right, so now, you want to roll it out. >> i want to roll it out because i think premiums are ready to the underprice. they tend to go up before catalysts like earnings, often, they go up by more than they should. if you can identify a direction and now, we've got a trend you're trying to make a bet, but once it stars to roll over, that's where you can press your bets >> got it. up next, your tweets and the final call 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?

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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. time to take some tweets first question is from james who asks is it dr. spock logical, redundant, isn't it, to see baba hit 200 by september

extradition. love the show. >> i think it's entirely -- what it will be if you look out to september and look at the 200 call, the options market about a 2% chance of that. you said september 18th, i'd say that's much higher >> second question from mike, who says i own a small amount of tesla shares what's the best way to protect them from downside risk. it must be pretty eck pensive. >> the cars are expensive, so are the options, but if you buy one of the cars today, you get a federal tax credit to off set that, you need to sell options against it. put spread callers are probably the least expensive way to make that bet >> time for the final call carter >> caterpillar has been perfect. perfection does exist, but doesn't last >> sell your caterpillar >> with the october 115 100 put spread, you can make that bet at a low risk >> so, at&t.

this was kind of a stock call. i like the stock call. i think it's going to be higher, but i think the idea of selling calls makes a lot of sense >> that does it. don't go anywhere because mad money is up next right here on cnbc so don't move don't move >> hey, i'm cramer, welcome to "mad money," welcome to kram network ca call me at this show, this show is based on on