even for the things that were once a given. going to college... buying a home... and not being in debt for it for the rest of our lives. but we're only as strong as our community. who inspires and pushes us to go further than we could ever go alone. sofi. get there sooner. hi there, we're live at the nasdaq market site on this chilly friday afternoon. look who stuck around. guy and the crew are getting ready. here's what's coming up on the show my fellow americans, our long national nightmare is over. >> that's what investors hope is the case with struggling shares of general electric. and they might get their wish come monday. we'll explain why. plus -- >> the walmart price >> -- just hit an all-time high.

there's something that suggests the shares could go even higher when the company reports earnings next week we'll break it down. and here's what shares of roku are doing >> beep beep >> if you missed the move, we'll tell you how to get long for less the action begins right now. >> let's get right to it, we're letti heading into another busy week the big moves could come from the big box names, the options market reporting a 6% move for target mike is taking a look at walmart, an all-time high today. >> number one, it hit an all-time high. number two, the thing is trading 20 times earnings. this is really the haves and have notes in retail, isn't it the final thing is what you just talked about, the relatively high implied move, this thing implying a move of just under 4%, normally a good deal lower

than, 2%, 4% is what we could normally expect. people do feel like there could be a little more of a move i don't think it's going to be a huge surprise, most likely we'll look to try to sell some of that near dated premium i think the best way we can do this is looking at a calendar spread i was looking at the november january 92 1/2 spread, you can sell those novembers at 110 against it, you're going to spend just $1.40 to do that trade. this is going to obviously make some money if the stock does drift higher to the striking long or even a little bit through it otherwise that shorter dated call will roll off and you'll own that other call for a relatively low price that's a nice way to maintain a long position in name that's had really quite a run >> it has quite a run, really in the last month or so if you think about it, it was consolidating pretty well, outperforming the rest of retail, especially most of the big box guys when you have a stock trading at an all-time high, after such a

sharp rally in such a short period of time, it makes sense to define your risks i like the idea of a call spread here if you're wrong, you're risking a little more than 1% of the stock price, especially at a time where a lot of retail acted very poorly. you're choosing one that actually is a leader, x amazon >> even ones that have done okay lately, target obviously bad on the year but a little bit better lately, trades at a big discount to where walmart is. they're getting a lot of credit basically for trying to go into the online space, despite the fact that the company has a brick and mortar presence. >> we tried to remove you forcibly from the set. >> it's your loss or my gain or something like that. can we talk about walmart? it traded up to levels that it failed at. the end of 2014, beginning of 2015 if you recall, because i do, you saw a pretty precipitous drop throughout the year. not to suggest we're on the precipice of that.

look what happened then. why do i mention it? because walmart does trade at a premium, walmart's at a huge move over the last six weeks and target trades at a discount. i would submit, and we said this on july 13th when you were sitting in the middle at 6:32 in the morning, you came out and announced to the upside. i said at 52 bucks there's something going on here, i think the stock goes higher. stay with target, take money off the table on walmart >> i've got a question about letting it go through january. do we get any indication from walmart about holiday sales that could be another opportunity for the stock to move? >> are we going to get an example from walmart specifically or from retail generally? yes, you definitely get clues on what's going on in retail before the january expiration date of this option. we'll see retail sales numbers a couple of times between now and then obviously we'll get boots on the ground analysis as well. >> just one thing on the actual trade structure. he's selling that near dated premium, a lot of times the way i think of it, if this stock

were to move up or stay around here, then he ends up financing, owning that jan call which may be a great time to run it especially after that big run if it's going to consolidate. >> there's two things you could do after this november separati expiration rolls off you could sell a higher strike january call against it and if it trades slightly lower you can sell the decembers to finance that trade through january >> since you're here, guy, you're the straddle between "options action" and "fast money. >> i think this is like my seventh or eighth time on this show so in my world i'm lying a regular. >> who's counting? >> i am. >> anyway. of these big box retailers which one would you likes most >> interearnings target. ctg. they finally got their act together and on valuation target

makes sense. we talked about jwn on "fast money" that airs 5:00 to 5:30 on friday dan, stop making faces at me you've got about a 5% pop. i think there's more room to the upside >> do you like target too? >> i do, it's trading 13 1/2 times earnings, your room for error in that name is obviously a lot better they do occupy a similar space i think the issue, walmart is getting a lot of credit for doing things, although i don't know that that's translating in terms of magnitude it's a big shift, they have to do a lot of things right i do think target is compelling at the discount. >> let's move on to general electric, the stock getting a boost ahead of its investor day on monday. despite the rally, shares are still down 35% this year, shedding $99 billion in market cap. that's put the state of the stock's dividend into question will they announce a cut morgan brennan is in the

newsroom morgan >> reporter: melissa, that's the biggest question on wall street. that's the one they want answered will ge cut the dividend john flannery himself called the cash flow, quote, horrible after last month's earnings, the expectation is increasingly that it will. to put that potential scenario in perspective, the last time ge cut was in 2009 during the recession. the only other time since 1899, this would be a big deal flannery is looking to cut $3 billion in costs through 2018. will that target get more aggressive as more layoffs seem to be coming according to reuters, layoffs in ge digital today what would comprise flannery's pledge of $20 billion in divestiture? transportation health care? lighting baker hughes these are some of the companies that have been tossed around in

speculation. lastly, in light of all of this, what's the new profit guidance ge still technically has a $2 per share target for 2018. it's outdated. analysts have disregarded that for months now the current consensus on the street, $1.14 per share for 2018 so there is a lot on top from flannery as well as new cfo jamie mill and her the ceos of aviation and power all of this will start at 9:00 a.m. on eastern on monday. if you take a look at shares of ge, they did close this week higher, they rallied today they're still down about 20% since flannery announced this event back in late july. that was right before he took the helm as ceo, melissa >> morgan, thank you morgan brennan in the newsroom dan is making a call on ge into the event, why don't you head over to the plasma, please >> i will. morgan brennan did a nice job describing what has been going on with ge >> you okay, guy >> i'm all right

>> massively underperformed, there's obviously been management changes, obviously been a lot of uncertainty about what that earnings power is going to be. what this company is, this big conglomerate, how do you value all these different pieces of it i think november 13th, that's monday you have this event. john flannery seems to be the right guy to kind of reright this ship. it could be messy in the near term that's why it just sense to be contrarian, using options to find your risk here's a five-year chart of ge, pretty much a disaster this was the flash crash back in august 2015. look where the stock seemed to have at least stopped for now. it's consolidated a little bit over the last week here as investors start to kind of think about what could come out at this meeting next week i just want to kind of flash forward to the one-year chart, okay this is that 35% drop that we've

kind of described. this is a year when the s&p is up 15% this what i want to focus on, all the earnings coming out in q3, the stock was 24, it went right down to 20 it's consolidated a little bit to me, i think it makes sense to target, looking at out a couple of months, but target some sort of bottom in this stock and getting back to the $24 level where it broke down. this is implied volatility the price of options it's been moving higher as the stock is moving lower there's a lot of uncertainty here here's the thing buying premium, long premium, buying calls is an expensive way to do it i think you want to sell something against it today when the stock was trading at 2050, look out to january expiration i wanted to buy an is vertical call spread. i want to define my risk to the premium i'm spending today when the stock awas 2050, you could buy the january 2024 call spread paying $1.10 and buy

one of the january calls for $1.25, i'm semming one of the january 24 calls at 15 cents my match risk is $1.10 i can make up to 290 at $24. that's a pretty good level to target until the near term one other reason why i'm looking at the january expiration is, again, it's going to be a little messy between now and the end of the year as far as what investors get comfortable about with this company, the future direction of it. it's also down 35% of the year, the worst performing stock in the dow, maybe we see some new year action. to me, i like the risk/reward of this trade it's already 50 cents in the money. i basically have the potential to make close to three times what i'm risking >> all right mike, first, do you like dan's trade in light of what he believes about ge, that the stock is near bottom and do you believe that the stock is near bottom >> first of all, i definitely think the new management team and the changes they're making are on the right track this is one of those situations, though, this company has to make a lot of changes

these problems are not going to be easy to fix it's not going to be quick to fix them some of the businesses they're talking about selling and spinning off, the locomotive business, is just one example. it's not that easy so if you are inclined to make a contrarian bet, this is definitely the way you're going to want to do it you're rifkdz less than 5% of the stock price right here it could easily move that much we were talking about the high debt level the company has, shy of $140 billion in debt. the higher the debt level is, the more volatile the equity level becomes. options premiums haven't come down quite enough to go with that this is the way to play it >> guy >> game on on monday monday is general electric investor meeting we're going to learn a lot more, i think. we've seen in the last couple of months, company reports earnings, two weeks later they speak in a meeting and say something totally out of the blue we can rattle off the companies, maybe celgene being one. but i digress.

you're going to know a lot more this time on monday. i hear what dan is saying. but you have to ask the following question what is the right multiple for general electric, a company with basically no earnings growth, as compared to a honeywell that's going to grow from 11 to 13% should they be trading at the same multiple? i've said no for quite some time at a certain point, you're going to find equilibrium in ge, i just don't think it's 20 bucks dan is giving himself time, which makes a lot of sense in the here and now, there's going to be some murky waters. >> just real quickly, on the event, you know, you're either going to get a capitulation, everything sounds nasty and you'll see a stock in the high teens, or the thing will continue to solidify and you'll like these sorts of trade structures playing for a move back to the 20s. >> check out our website, while there you can sign up for a newsletter, what guy reads every night before going to bed.

>> damn straight >> here's what's next. roku shares are running wild if you missed the move, we'll show you how to get long for less plus calling all "options action" fans reach into your pocket, grab your phone, and tweet us your question @optionsaction. if it's nice, we'll answer it on air when "options action" returns. >> logical you start trading. you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade.

well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. welcome back to "options action." shares of roku skyrocketing this week after blowout earnings. the stock is up nearly 150% since its public debut in september, making it one of the best performing tech ipos of the year if you want to get in on this rally, how can you do it for

less mike is at the plasma with the call for action. >> to buy a stock after it's had a sharp rise, we're going to take a look at how we can do that selling the put, the stock has risen sharply. we would like to buy it at a price lower than that. because the stock is moving around so sharply because it's a recent ipo, the options are extremely expensive. we want to take advantage of that we're try to avoid the next earnings, because we probably are going to see another big sharp move we can take a look at how big this move was. we may get a move as large as this one when we look at the next one we'll look out to january. when i was looking at this today, you can sell the january 35 put for $6. it closes with a 7 bid you can sell that for $7 at this point. what does that mean? you could be forced to buy the stock at $35 but net of the 7 you collect, your purchase price will be just $28, which happens to correspond with the not

updated analyst target prices for the stock. this is a way that you can try to get in at slightly lower level than where it's currently trading. >> what do you think of mike's trade? >> then do i get to comment on roku >> yes >> okay. the trade makes total sense. we've look at these situations over the years when we have these small floats, new issues, high short interest, then you have an opportunity to sell a put to effectively get involved, at much lower levels worst case scenario between now and january is this stock goes way through the difference between the strike and the premium at which you sold, then you are losing money but i don't think that's likely to happen. the next opportunity for that to happen would be some sort of competitive announcement that's where i want to talk about roku or some type of earnings miss which will probably happen after the january expiration this is a good way to get the premium over the next couple of months substantiation the worst thi >> the worst thing that could happen to you, it closed today under $34.

one of the things the company said, i happen to agree we'll all be streaming, they do have a huge secular tailwind. the valuations, we can't talk about valuation in a company like this. >> when the fitbit and gopro came public, the ceos told us that everyone's going to be using health bands and everybody is going to have a gopro it seems kind of similar >> it does seem similar. >> where are you gopros and fitbits right now? >> in my drawer, which is hard to say 6.7 million, i think there were 11.3 million or so last year at the same time. that's pretty significant growth so i get it, they're doing something right. this is the deep end of the pool trade, folks all the people who watch "o.a." understand to mike's point, all with anywhere from 22 to $28 price targets, they're all going to have to rachet it up so the level that you're going to wind up being long the stock,

worst case, is probably -- >> do you -- >> no. [ simultaneous speaking >> i will bet you that six months from now you will be subscribing. still ahead, shares of general motors have been in reverse, falling 9% since its high weeks ago that's good news for dan we'll explain why. e t us a tweet, if it's nice, onofhe traders will answer it later in the show much more "options action" after this i think it's terrific. your kids go to college and you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch.

help from real traders. only with td ameritrade.

well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. welcome back to "options action." time to take a look at our open trades mike made a bearish bet on snap on earnings. >> this is not a good looking picture, one of the fundamental reasons is they're competing with facebook. facebook was one of the names that actually did well as the earnings progressed because the company was doing well i think they'll have a much harder time. what i'm looking to do is sell

those very expensed november 10 weekly 14 puts, collect about 65 cents for those, then use those proceeds to help finance the purchase of the same strike, the january 14th puts were $1.10 >> the stock fell more than 16% this week. mike got the direction right on the trade, wrong structure, though >> so we paid 45 cents today it closed, the short went off, the trade was made 75 cents over 45, 30 cent profit, not that big the magnitude was even bigger than the bearish move i had anticipated. you can roll that position, though, out to a -- basically the same strike, a little longer dated. >> gm, last month dan said it was time to pump the brakes on the stock. >> to me i think it's gone a little too far, too fast here. when you think about it from an earnings standpoint, earnings are expected to climb next year, year over year this is a very cyclical story.

there's obviously some huge secular headwinds. when the stock was trading 4480 today, you could buy the november 4440 put spread paying 80 cents for that. >> the stock actually rallied to a new high but then fell what do you do now, dan? >> you have one week expiration, the trade is up 50% in premium terms. at one point it was double this week that's when i probably would have looked to have taken it off because the risk/reward isn't so hot there, down to the short 40 strikes. you probably take profits early next week in this one and move on >> what happened to gm >> i think this is the stock that went from 35 to 45 in basically a month. in trader parlance there's something called a back and fill why are you shaking your head? get him on camera doing that,'s mean 50% retracement of that move is 40 bucks i think gm will -- >> that's what i was going for, thank you.

>> thank you coming up, your tweets i think it's terrific. your kids go to college and you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade.

well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing.

>>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. welcome back to "options action." time to take your tweets ian asks, what is the best way to play the rumored acquisition of mattel by hasbro, mike? >> the most classic trade in options for this is the buy right. you buy the stock, sell the calls at the strike where you think that acquisition is going to take place. that's the way the guys play it. >> time for the final call mike >> rather than buying roku the stock, sell that january 35 put for 7 bucks. >> so ge, obviously it's a little dicey here, you could have the stock back towards 18 if the news isn't fantastic. you have some time to play it out. i like long january calls. >> a joy for me to be here can i give you a little history

lesson on the 11th hour of the 11th day of the 11th month in 1918, major hostilities of world war i ended. what did that create anybody? veterans day that's tomorrow. so you know what thank a vet tomorrow, fos.lk >> looks lik my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now >> hey i'm cramer. welcome to "mad money. welcome to cram america. orr pant want to make friends i'm want to make you money call me at 1700 cnbc or tweet me @jim drarm. we too often invest for the day.