and i just don't think there's a lot of things that are going to take it up over that breakout level. >> there's two sort of critical reasons why i like the structure you've chosen and the strikes you've chose ran we talk about how much stock moves on earnings and that's sort of a one-day look take a look at how nike has typically behaved for the one month that follows earnings, you're looking at maybe a 6% or 7% move on average take a look at the strikes he's chosen, targeting that move to the downside the other thing is why do you want to do a spread going into a catalyst in this case you see slightly elevated options premiums. options will decay a little bit each day take a look at the 65 strike that you're bag that's going to decay $3.10 a day you own it, the one you're selling is going to decay $1.80, offsetting a love of the rental expense of

owning options i like the structure a lot >> the first chart dan had up, the issue of where the stock is. nike has rallied to highs of 2015 in principle a normal condition is after rallying to a prior high, you can tend with it meaning you back and fill. the stock's been doing this the better part of three months. normal after contending with the high you either exceed it -- it will be the earnings that do it -- or back away. but it's a perfect setup for a very dynamic moment. is it 50/50 making your bet? it's going to be earnings. the one thing that gives me pause, being underweight or shorted, is that retail is very poor and nike is holding up very well relative to retail big moment coming. i'm inclined to bet up it's not going to be casual, whatever happens. >> mel started just short, so would i be short this stock given what we know about the space in general we saw adidas had a massive

rally. to me i liked the risk/reward. risking $1, i probably have a 45% probability in a week or so of being basically unchanged in this trade, if you look at the deltas in this option structure if i get the direction right to me, i have five weeks for this to play out as long as it doesn't go the opposite way on a big gap higher, i'm in the game. >> it's not just nike reporting, a slew of big names are out with earnings, oracle, fed ex, general mills, micron. one of those stocks could break out. >> all tech all the time let's talk about an old line tech if we've got this it's, it's about to break out oracle versus its sector, one-year chart oracling the laggard having basically underperformed its peers by 50% or its peers

doubling t here's a longer-term chart that's one year. next chart will show us over four or five same circumstance. you've got this lag. i want to show you where the lag really started take a look at the longer-term chart. now we're up to the potential or top potential. several ways to draw the lines this is a five-year chart. one way to draw the lines would be this. a cup and handle that usually is resolved by an up next way to draw the lines is a wedge that usually is resolved up. one more way to draw the lines after breaking out from well-defined top, often after breaking out, you check back to

the top, pivot, and start to go again. so now hold your eye on that classic line right there and look at the long-term chart going back to the dot com era. and here it is look at this it literally was a checkback right to the highs, the breakout what a setup classic. all-time highs here. i love it. i want to be long oracle going into its earnings. the charts speak for themselves. >> i love it, he says, wow mike, how are you trading oracle >> we could talk about the fundamentals all day this is an options show, we're going into a notable catalyst, he was making a technical setup. take a look at how the stock typically trades on earnings this is a stock that like nike, 5% to 6% moves on average. what i was looking at this earlier today, you could buy the april 52.5 calls for $1.45 is

where they closed. those are going to break even to the upside if oracle is above 53.95 by expiration. think about the fact that it could move dive% or 6% one way or the other, a $2.75 move, you're get ac free look on an option that's going to last until the 20 if it does go higher you'll have an opportunity to do a couple of things you can sell this option if it is profitable, you could roll into a call spread as dan does in these type of trades. right now this is a favorable price i think on one-month options going into something. >> mike worked into what we talk about, implied move. when you think about that, active money straddle. mike's buying half the straddle, implied move about 6%. he needs a 3% break-even we talk about that in events all the time you need a lot of things just to get -- just to break even, you need three things right. direction, magnitude, timing so these are ones where you take these inputs, his charts, they

do look kind of good the tech bid for these names is pretty good too. but mike's defining his ricks to less than 3% with a $54 breakeven over the next month or so seems like a pretty good risk/reward. >> in terms of technique or methodology from this seat, it's the exact same principle as what we're talking about with nike. when you get to a former high, the reason you back and fill, as this stock, nike, because there's memory at the former high people who own it are just being made whole and they sell into the move after contending with it, you can exceed it as nike is prospectively going to do or oracle has done. it should be free sailing. >> our research indicated 70% to 80% of a stock's movement throughout the year can be attributed to their four quarterly earnings reports if there's ever a time when you need to think about if options are fairly priced and they are in this case, this is it going into earnings as a cataly

catalyst this is a stock the street loves which could cut both ways. so i like the stock fundment iffally. they're in the right businesses. if for some reason it became disappointing, we did see this, a down move over 7%. >> on the fundamentals, the last two quarters the stock has sold off. it had rallied into the results. their cloud sales had not hit expectations that's what investors are really keyed on here. to me, again, it goes back to defining your risk in an event where you need to get a lot of things right to break even the risk/reward makes sense, the charts look great. >> check out optionsaction.cnbc.com, sign up for our newsletter, rumor has it dan reads it every night before bed. don't be a - >> actually, maybe you should. because shares of square are surging. and it has nothing to do with bitcoin. we'll explain. calling all options action fans reach into your pocket grab your phone.

tweet us your questio question @optionsaction. if it's nice, we'll answer it on air. when "options action" returns. well, it's earnings season once again. >>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. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

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uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. two, one, fadeaway. that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum -- just to help you improve your skills. boom! that's lesson one. education to take your trading to the next level. only with td ameritrade. bitcoin tanking and taking down cryptos with it except one. a man who never gets knocked

down, come chew. >> you folks are bunny tonight i get knocked down but i get up again. bitcoin prices and cryptocurrency prices have been heading lower as of late small and micro cap stocks that try to ride the wave by putting block chain in their names are changing their business plans on a dime to be more focused on crypto, they haven't fared that well they went up and in the case of a stock like riot block chain that upside para bullough. bitcoin now trading around 8 bucks a share. long thin, whose ceo came in on "fast money" and tried to stock his talk down, got up to nearly $143 a share on block chain optimism now it's closer to 50 bucks. even more established companies like overstock.com rode that crypto wave higher and has lost half its value since jab

january. square is working on incorporating some elements of crypto into its platforms but some will argue square goes beyond just a crypto play. in any event, bitcoin prices falling. that's also having effect on assets elsewhere in the market, all getting dragged down alongside it, except for some. >> thanks dom chu. square has been on fire, up 200% in the past year if you missed the rally, relax, "call to action. >> we'll take a look at selling and put spread why might we want to take a look at selling a put spread? number one, selling a put spread is a trade that has limited risk defined by the two strikes that you're both long and short this is a trade where you're collecting premiums. this is putting time on your side finally, this depends probably more also on the strikes and expirations you choose you get a higher probability of profit take a look here

we can see as melissa was referring to the stock has had quite an enormous move to get in and start buying the stock right at this level, you can see that it's come a long way awfully quickly. what goes up could potentially go down. we're going to try to participate to the upside, get time working on our side, without taking all that downside risk specifically what i was looking at was the april put spread. collect $2 by selling the 55 put for $3.35, buy the 50 against it for $1.30, limiting your risk, 40% of the distance between these strikes. importantly we were talking earlier about if you see an identifiable catalyst, you might want to own options. in this case their next earnings is going to be reported may 2nd. these options are going to expire before then, one of the reasons why we happen to like this trade that would obviously be probably the biggest and most important near term catalyst that we see. we get to collect premium before that happens. >> what do you think, dan? >> i like the trade idea, i

think it's the third point is most important, high probability of success he's short the money options, got basically 50% chance of being profitable or losing money. if it does nothing, just sits here, he's collecting as that option decays that he's short at the money. if you're convicted as going lower and you move higher, you're going to have an opportunity to take this off for a quick profit with not a whole heck of a lot of risk so i like the trade idea. >> as charts go, it's parabolic. the issue is does that last forever? for now it's lasting we know cater pill later was parabolic, no more mcdonald's boeing these are stocks that were up. it becomes hard to know when surely if you're long, taking profits -- >> one point rlgs we started talking crypto stocks. square is not a crypto stock they announced some users are able to buy bitcoin on it and analysts who have done work on this company that's expected to do $1.3 billion in sales this the year think it's a 30, $40

million revenue opportunity. if you're buying square because you think it's a crypto stock, you're buying it for the wrong reasons. i just want to be clear about that. >> the question i would have, even if this does start to run out of gas about here, are we expecting a sharp sell-off or expect it to trade a little side ways? our break in this case, below where the stock is coming from - >> that's why that's so smart. think about it, there are very few ends that are just straight up and then straight down. that only comes in a biotech where you get sort of force may judge, act of god. usually a great run stalls is like a great run in anything, a sport season, you start to age, you stall. it wouldn't be like that. >> so the options market right now is implying that there's probably about a 65% probability that the stock is going to close above $53 by april expiration. so that's the chances that you either break even, make some money, or make all the money so certainly better than a coin toss. >> do you think that most investors are in square because

of the crypto? because they try to talk that down, very clear about it. >> they're smart, getting into -- they have this cash app, it's an amazing app, it's growing why wouldn't you have it so you could invest in crypto crushty? they don't want to be known as that look how bitcoin has done this year, look at how square has done they're totally uncorrelated to me, the market's telling you it's not a crypto stock. i'm saying, don't buy it because you think it's a crypto stock. boeing posting its worst week in more than two years, shedding $15 billion in market cap. is boeing's incredible run done? got a question tweet us @optionsaction. if it's not mean or laced with profanities we might read it later in the show. don't go anywhere, "options," back after this. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation?

eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

so lionel, what does 24/5 mean to you?rade well, it means i can trade after the market closes. it's true. so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light.

♪ you're not gonna say it are you? at holiday inn express, we can't guarantee that you'll be able to contain yourself at our breakfast bar. morning, egg white omelet. sup lady bacon! fruit, there it is! but we can guarantee that you'll get the best price when you book with us. holiday inn express. be the readiest. time to take a look back at some of our open trades. two weeks ago they said boeing's amazing run was done. >> one of the principles of trend work is that when you're an uptrend, you will check back, chemical back, check back to

trend. just as when you're in a down trend often you will throw back, throw back, throw back to trend. we have now gone longer than any point in history of the data for boeing without a check back to trend. i want to make the bet that this current 7% plus/minus sell-off is the beginning of something more. >> i was looking at the may put spread you can spend $19.75 for the 335 puts, sell the 290s against it. >> they were right, boeing shares fell nearly 7% in the past week, its worst in more than two years now what this. >> so first of all, the trade is up modestly i would say at this point. obviously we were targeting a sharper move down and we are giving ourselves a lot more time for that to play out so my inclination is to stay in a bearish bet here the puts we bought, 335s are in the money. one thing you could do and i would do myself if you're in this trade is sell the 335s,

roll down maybe to the 330s, so you're at least looking at an out of the money put spread. we have until may, that's going to capture earnings, we have plenty of reasons to stay in the trade. >> if you put the context in the sell-off and the proceeding moves, 90 to 350, we've given back nothing in principle, if this is trouble or the beginning of trouble, it's not likely the end of the trouble. >> do the odds tip in their favor because of the potential trade war and tariffs? >> this stock hasn't caught a bounce where some other sectors did after they got hit hard the last two weeks this thing has lost almost $20 billion in market cap. you think of the market cap gained by steel and aluminum stocks, it's de minimis compared to what this has lost. i wonder to you, carter, because it seems like there was a fundamental reason that sparked it, does that give you more conviction that you'll see 300 in the near term >> always, in the sense that while i don't look at the fundamentals or funny-mentals as

i call it, it's usually something like that that starts to cause the break in the chart. otherwise, good trends don't stop. up next, your tweets and the "final call" from the options pits once again. >>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. at holiday inn express, we can't guarantee that you'll be able to contain yourself at our breakfast bar. morning, egg white omelet. sup lady bacon! fruit, there it is! but we can guarantee that you'll get the best price when you book with us. holiday inn express. be the readiest.

two,that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches

and a full education curriculum -- just to help you improve your skills. boom! that's lesson one. education to take your trading to the next level. only with td ameritrade. breaking news on qualcomm from the newsroom. >> we're hearing in the press release dr. paul jacob, former ceo and current board member of qualcomm, will follow be renominated to the board of directors because of the notification to the board that he has decided to explore the possibility of making a proposal to acquire qualcomm. so take a look at shares of qualcomm trading now. >> jackie, thank you from the newsroom is this likely do you think this is a possibility, dan >> i think it opens the door to a lot of other things. we were talking about at the break, when you look at qualcomm's balance sheet, their licensing issues with apple that are likely to short up in the near future.

this is a really, really cheap stock, especially when we've seen $300 billion of mna in the semiconductor space. at some point these guys are going to get in play i don't know who it is, maybe intel. i know broad can't do it >> we touched on this last week. one of the things we talked about was the fact that it was trading 10 times eb, a measure of free cash flow. what you care about is cash flow, they've got a lot of it, so somebody could make a run. >> a major laggard that obviously has turned the corner, so opportunity. >> time to take some of your tweets how do you calculate probabilities of underlying prices based on options prices the 63% chance of square above 53 by april? >> hopefully your brokerage platform can give you some of the possibilities. look at the delta of an option, see what the probability is that a stock is going to be at that level or beyond it by expiration. >> final call, carter?

>> buy oracle. >> mike? >> put spreads in square. >> nike, i like the april 65.60 put spread. >> our time is expired i'm melissa lee. for more head to our website "mad money" with jim cramer is up next. >> this is a paid program brought to you by the international fellowship of christians and jews, presenting the plight facing god's chosen people today so that you can be a blessing to them through your prayers and christian love. >> and it was right here in those ravines jews would be brought. they were walked for kilometers. ♪ comfort my people... >> each of them went through unbearable darkness. ♪ comfort my people...