hey there. we're live at the nasdaq market site on this expiration friday guys getting ready behind me while they're doing that, here's what's coming up in the show >> ludicrous speed, go >> tesla's shares are on fire. something in the chart suggests new highs ahead. we'll break it down. i don't live home without it >> that's because american express shares are doing something they haven't done in a while. it may spell more gains ahead. we'll show you how to profit

♪ it's a good time for the grea taste of mcdonald's ♪ >> not really. shares of the golden arches had their worst week of the year you won't believe where some options traders see it going the action begins right now. >> all right let's get to it because while stocks made new highs, quietly tesla's shares are on fire, surging 10% this week for its best weekly gains since july of 2016 tesla is now up more than 75% this year. so is it time to pump the brakes or will it rev even faster let's get in the money mike, what do you think? >> okay. so let's start with a full disclosure there was a period when i actually said it would be better to buy the car than the stock. that was a big mistake had you bought the stock, you could have then taken some of your profits and bought the car and still had as much left in stock. this was a situation with big short interest, there's a great deal of enthusiasm for the company.

every single time they make an announcement it's basically buy the stock on the promise that offers without much concern about what the execution risk of all of that is and then finally, from a fundamental perspective, what's the helped out is that people thought the higher end model x and model s models, those sales were going to drift off and they would rely on the model 3 cars that hasn't been happening, we've seen an uptick there the enthusiasm is clearly there. >> dan >> yeah, there's a couple of things that mike just said, really important, some of the pricing and demand for the model s and model x, the higher end ones there's not a lot of model 3 supply now when you get supply, there may be cannibalization on the high end. this is not that $35,000 electric car once it's tricked out, it's much more expensive and you may see people trading down a little bit.

the other point mike talked about was short interest that's the been the killer when you think about it, with close to 27, 28% short interest, elon musk is the largest shareholder with over 20%. he never sells he actually buys every time they raise capital. so you have that thing pairing off a little bit the other point about execution, investors really don't seem to care about misexecution. this is a company that delivered 84,000 cars last year. they announced 47,000 through the first half of this year. it was a slit might miss investors don't care, the stock is up 75%. it's nearly impossible to short this stock >> break down the charts for us. >> i'll go over to the plaza and do just that interesting things going on in terms of its behavior day to day but also in the context of where it might be headed i think the most important thing perhaps is that we know, there's a lot of rotation this week. big, popular marquee super cap

names otherwise known by a popular acronym, among others, all do poorly this week. in the past five sessions, take a look at tesla. and netflix, amazon, apple let's keep going facebook pri priceline. google it's separated itself just recently from these high fliers, all of which have stalled. and i think that's an important tell, given where the chart is let's look at a chart or two no drawings, judgments, annotations by me. i would say you could draw the lines this way and if you do, the implication is it's already started to break out from this wedge. you could draw the lines this way and the implications are it has yet to break out from the flat top, that's the bet, that it will.

it's preciously close to an all-time high, it needs to move 2% and it will go to an all-time high that's the kind of environment we're in remember, all those other big stocks are sort of doing this over the past few days i think that's very important. i like tesla for a breakout, for a move to new highs. >> mike, what's your trade >> specifically because i said on a fundamental basis this is a hard stock to go out and buy obviously the momentum is there, the market hitting highs as it did this week. this is a case that sets up well for using options. obviously going out and buying a stock this expensive, whether you talk about the absolute share price or the valuation, it's kind of hard to do. you could buy the november 380, 430 car sped you could sell the 430s for 760. this gives you the opportunity, number one, to participate in the stock for a lower price and purchase the underlying shares, and also given the fact that if

we did have some kind of market event, this gives you the ability to participate on some upside which it demonstrated it can deliver. >> dan, what do you think of mike's trade >> it's an interesting trade because it really is a long stock alternative with limited upside but also limited downside if you expect this stock that's up 75% for the year to make a quick move up another 10, 20%, well, you know what, the risk/reward is not fantastic do you agree with that, mike if you expect the thing to break out and kind of move towards that higher strike call that you're shortin a sort of gradual manner, this trade makes a lot of sense you're risking one to make one for immediate participation to the upside >> one of the things i would quickly point out, this is a stock, the volatility of the stock is very high if you're going to sit there and say, okay, i think there's a coin toss here where i think the stock goes higher or lower, one of the other things you could do

is sell a credit put spread. the risk/reward is actually much worse. because this thing is moving around so much, and also because the share price is so high, that for those who are interested in making a bullish bet and are reluctant to reach out and buy the stock, and i can completely understand that, this is a way to get some potential upside without putting too much -- >> carter, final word. >> relative strength matters impressive relative strength compared to other high fliers. square up more than 100% paypal up nearly 60% mastercard and visa both up 35%. american express has rallied 17%. all of these names, with the exception of amex, hitting new highs this week. dan, you say there's more room to run what do you like about the news? >> one of the things that's interesting, i'll let carter talk about the charts for american express, the consolidation over the last couple of months is interesting to me, in the mid-80s here

how much those stocks are up on the year, obviously american express has really lagged here, only up 17% for the year the thing that sticks out at me the most is that the square and the paypal, you know, massive secular shift towards online payments, peer to peer payments, that sort of thing i suspect at some point it plays a little catch-up here that consolidation looks like their next identifiable catalyst will be their q3 earnings in mid-october. i think you have the stock moving back towards that, because of one important factor. the stock trades at 15 times earnings analysts expect earnings to get back up to double digit gains next year. and at that point, i think you may see a rerating in the stock. those other names that we mentioned, the visas, the mastercard, the paypal, they're all growing their earnings and sales at double digits and they have premium multiples for that i think this thing plays some

catch-up implied volatility, you want to target that earnings event in mid-october. with the vol as low as it is, look out the stock was trading today at $86.80, you could buy the october call for $1.40, great lakes evbreaking even at $88.90. we have a catalyst, we have a good fundamental setup, a really good technical setup i think you see the stock back up above 90 in the next month or so >> mike? >> very importantly, i think american express could barely underdeliver the way they have in the past. they lost all of those affinity relationships, jetblue i agree, the space itself is growing. providing they don't make another mistake like that, they could return to double digit growth i like this trade. >> they've got it dead to

rights american express dropped 47% from its peak in '14 to the lows in january of 16 it is about catch-up the stock has lagged things like visa, paypal, mastercard it's obviously much better than capital one and discover there's a lot of consolidation here, that dan talked about, the potential to make it back to the former high from the summer of '14. i like this a lot. >> agreement there with you, dan. >> finally just one last point. paypal as a name is new to a lot of investors it's got a $75 billion market cap. you know what american express is $77 billion. i think there's going to be some convergence there. and i want to play it long american express rather than short paypal >> got it. we have much more options action still ahead. here's what else is coming up in the show guess which stock in the dow just had its worst week of the year ♪ quarter pounder with cheese

♪ golden french fries, salad ♪ >> and the charts aren't looking much better. we'll tell you how to profit plus calling all options action fans. reach into your pocket and tweet us your question at options iti ift's nice, we'll answer it on air. logical. 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.

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. welcome back, aim dominic chu. some traders out there have been feeding on restaurant stocks this week. we're talking specifically about the qsrs or quick service

restaurants like chipotle mexico grill, up 4% this week but still down 17% on a year to date basis as it tries to recover from all that negative sentiment around food safety concerns shares of shake shack doing pretty well, up around 2 to 3% this week, but still down 11% for the year overall then there's wendy's which has been serving up hot stuff as of late, up a blistering 9% this week, north of 15% in 2017 now, the downside standout has been the biggest restaurant company out there, we're talking mickey d's and lost 2% this week, mind you, still up 29% on a year to date basis the average analyst target price for the golden arches is 9% higher than current levels michelle, it remains to be seen whether traders are still lovin' that mcd stock back over to you >> let's find out, dom, thanks very much.

mcdonald's posted its workweek of the year. carter, you say the charts are pointing to trouble for the golden arches. break it down for us >> just what you started with, bad action this week looks to me like it's the beginning of more bad action three lines. you got mcdonald's, a three-year chart, pretty straightforward. the big winner it's important to say this is the russell 3,000 restaurant it's got things from popeye's to mcdonald's and starbucks, red robin, garden burger, cheesecake restaurants have been a real dud. three years and nothing to show for it in the middle, of course, here is the s&p 500 and what's starting to happen, though, there's a little bit of life in some of these laggards as we heard from dom mcdonald's is giving way a little bit i'm going to remove the s&p. let's go one more. and take a look and see what we've got. now, this is over the past year.

this is important. what we're starting to see here is, again, that mcdonald's is starting to go down ever so slightly, while the restaurants are starting to hook up. i'm going to bit this is going to continue to happen. let's go to the day to day charts and try to figure it out. here's mcdonald's. here's the trend line you can draw and my guess is, is that we're just going to check back, check back, check back the trend if i'm long, i want to take profits. if i'm a short seller, you could get a nice 5 to 8% selling >> one of the reasons this company has been doing so well or had been so far this year was that management was doing some important things to try to improve their operating results. specifically, they were doing a lot of refranchising, looking to cut $500 million in sga expense. they've been on track and even ahead of track to do that. the problem is there's also secular headwinds within this

space that mean that once you've solved those problems, potential growth out and beyond that is going to be hard to achieve. right now it's trading at 23 times forward earnings at best that's a reasonable multiple you could expect on any kind of a pullback that's fully valid he here i'm with carter, it's come as far as we could expect it to december, 155, 145, a $10 wide put spread obviously many things that could impact the market, and this company, the restaurant space is super discretionary in general, could create some province with this put spread. it's a relatively small percentage of the stock price you're spending to make this bet. >> dan >> if you agree with carter's technical take and mike's fundamental take, target that go 150 and maybe a little more

makes sense, to do it with the fine risk. i like the fact that mike is spending 2 1/2 dollars to get you through that support i don't think, without a broad market selloff, you're going to see a stock like this that's been a massive leader that's had huge upside reactions over the last two years i don't think it's going to give up a lot of those gains unless we have something specifically fundamental or a broad market selloff. i like the risk/reward of the trade and i like the technical setup. >> i would absolutely agree. we're looking at $10 potential decline, maybe a little more, for a $160 stock we're looking for a decline of 7%, maybe, something in that neighborhood, and giving ourselves nearly 90 days for that to play out that's really the idea here, a modest fallback, a modest amount of people. >> carter? >> the issue is this is there a lot of upside it's not so much where you think it's going, it's where it's not

going. it's like test-taking, eliminate the wrong answer is mcdonald's in a position to go higher? no the inference is it's going to stall here or sell off that's the bet we're trying to make next, industrial size profits. carter cleaned up on his bullish alcoa trade. we'll give you the details plus got a question for one of the traders please send us a tweet @options action if it's nice, we'll read it later in the show. 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

oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. welcome back to options action time to look at open trades. coe and carter three weeks ago said alcoa was the best way to get in on the metal surge. >> here are the drawings i think you simply put your

green arrow and go like that if you want to be long alcoa, fine >> i'm looking out to october, specifically at the 41-46 call spread you could spend $1.70. >> alcoa rallying. mike, what did you know? >> we made some nice profits, it peaked on the 1st when the stock rallied through that upper strike i do think that right now the risk/reward is not as favorable as it was. you have to ask yourself, is the risk that alcoa is going to take off without me if i take my profits here or that there might be some downside risk to the market my inclination would be to take the profit >> carter, have you looked at the charts again >> yeah, all the time. i would do the same thing, 41 to 45, let's move on. >> that same week dan said the rally in the homebuilders was getting the a little long in the

tooth. >> it just recently broke down that up trend. it seems to be a bit of earnings news which got me looking at that exit in particular. today, etf trading at 36.50. i could buy the october, 37, 36 foot spread, buying one of the october 37 puts at 65 cents, selling one of the october 30 six puts at 25 cents the whole spread costs me 25 cents. >> so the xhb hit a high on tuesday but has since pulled back dan, what do you do? >> this trade is a tough one, basically a bust here. we talk about these directional trades all the time. you have to get a lot of things right. first and foremost, the direction, the magnitude of the move, and timing i got the direction so wrong on this one that it's really going to be hard to make up that ground, even if the stock or the etf were to come back in in the next couple of weeks at this point, you leave it on,

it's a bit of a lotto ticket, but it's a bust. >> carter? >> it didn't make the high, or it made albeit barely a new high if one were to look at it fresh and new, all the things you were thinking are in effect, there is every possibility the xhb here and housing in general and downside risk. >> reallyquickly, there's not lot of premium left. i think there's minimal risk in staying in the trade we'll see how it plays out >> what about playing with individual names instead of just going with the overall index, dan? >> real quickly, mcc, that's a great question lennar had a bad reaction to numbers that looked okay so to me, that was one of the reasons why i wanted to actually look at a $1 wide, i wanted to play a quarter of the width. option prices were cheap and the spread was dollar cheap. listen, the way that sector went back to make new highs, to me i'll take my lumps on this one and just kind of take another

look we did have that move in rates so who knows >> who knows got it thanks next, tweets in the final call from the options pits i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade. i enjoy the fresher things in life.o. fresh towels. fresh soaps. and of course, tripadvisor's freshest, lowest... ...prices. so if you're anything like me... ...you'll want to check tripadvisor. we now instantly compare prices...

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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 welcome back to options action our next viewer, john harris, asks, i bought jpmorgan september 22nd, $91 calls at 75 cents. what are your thoughts going into monday? dan? >> in a few weeks we'll have earnings i think you want to extend that call out if you think it's going to get back up to that recent high of 94, maybe back to 100 for the first time ever, you probably need a catalyst. that would be earnings that's going to come in the second week of october time for the final call. dan? >> to me i think it's interesting, the setup in

options here they are cheap american express are cheap >> carter. >> i want to be long tesla and short mcdonald's >> looks like our team has exre o tpid,urime has . my mission is simple to make you money. i'm here tolevel the playing field for all investors. there's always more work and i promise to help you find it. "mad money" starts now hey i'm cramer welcome to "mad money," welcome to cram america. other people want to make friends i'm just trying to make you money. my job is just to entertain educate and teach. tweet me @jim cramer boy do we ever have to fight not to b