are we not or are we geniu . hey there, relax, the nasdaq market site, the guys where getting ready behind me. they'll they're doing that, here's what's coming up on the show >> they can fly the 747 is the in thing we want to know why. >> because it's a cool hp-looking jet ♪ come fly with me >> after a run, boeing shares are hitting turbulence it could spell trouble for one group of stocks. we'll tell you how to profit talk about a bank job. >> put as many convenience anz 100s you can into it

>> the stock could spell more trouble next week. we'll explain. and -- >> it's happening. >> you bet it is because netflix is set to report earnings on monday we'll tell you how big a move options traders see it happening. it's time to risk less and make more the action begins now. >> let's get right to you. bank earnings kicked off with j.p. morgan, citi and wells far go they performed in the red. so could this spell trouble ahead of the next wave of reports next week? let's go straight to the chart master, carter worth is standing by at the plasma ready to go >> good morning. it was big for those three, five of the top 11 biggest financials reported this week it's not a good week for them. the presumption is there is more to come. let's put this into context. i think it's important what i've chosen is a start date

sluft high, the 2007 bull mark, so 11 october, 2007, two lines the market and the bksx. i mean, imagine that, more than a decade and your result, owning the bkx is down 1% versus, of course, the markets so the thought might be that one could may this for catch up. but, in fact, of late, it's not catching up, it's on or performing the mark even on the here and now basis so let's roll through. often the bet is and the bet that i would like to make is that you bounce off that line, but individual equities one at a time are undercutting. citi has already.net and certain others so forum shun is the whole index is going to break. now, here's the same chart and this is telling. same chart, but look at relative

performance. it peaked right after the election and all of this advance in banks and how quote good they have been. no, they haven't been good, they've been below market performance. adjusted for beta risk much below mark performance. let's go back to the index, itself then look at marken stanley and this is one of the ones that's already started to break you can see it sort of here just below the line and the presumption is just as citi has already done that, that morgan stanley is next. so back to the index, itself, holding the line as individual components break the parts compose the whole. the prem shun is the hole will break. marken stanley is on the radar here it will, goldman, too, break next week. >> all right well, come on back over. in the meantime, how are you trading morgan stanley >> we have a little dilemma here because a lot of the financials on a lot of metrics i think

don't look particularly expensive. we have pretty good results this week we have reason to believe businesses like morgan stanley, we saw good asset growth from black rock from the retail side, morgan stanley hinged to asset management we seen more deal flow this greer. we have more volatility. that's good for sales and trading. when you think ab their businesses, you'd say, that looks pretty good. they look relatively cheap to the rest of the sector outside of that though, they've performed very badly, what's interesting to me, the implied move is 3.4%, that's less than average, what is moving less than average these days? for the last 30 days, etching has been volatile to me, when you see a intuition of that weakness also the openings pricing in the smaller than average move, that doesn't make sense, i was looking out to june the 52-and-a-half, 47 put

spread, it's been a 1.40 for that trade, you are looking at less tan 3% for the current stock price. we have increases in the inputs. but to me, i don't really see how you could be overly optimistic after what we saw this week. >> so i think the most important thing about this trade is mike obviously can make a decent fundamental case for opening the stock here on valuation, some of the catalyst you see, carter talked about the poor relative performance. have you this technical setup, it really does lend itself to looking out fought just next week, that's why i like you are looking for a june put spread, but then also the width of this spread, you are not looking for this thing to crash. you are looking for it to come back to a level that darter has identified so i like the risk-reward of the trade. i like the timing of it too. when mike says maybe it moves two-and-a-half, 3%, that's what bank america, j.p. morgan, citi

and wells fargo has been down today. >> everybody thought that good earnings would basically take the markets off the headline risk that we have been seeing what do we see today that didn't happen we got good earnings that was a ridiculous narrative. i heard it all week. >> stop talking about this >> it got disproven today. >> when the yield compressed today. when banks took a turn, how does that educate how you view this space? >> it's not a fundamental data point. it's a common sense mark if something reports good result, it can't move higher, black rock did it. obviously, other banks today, particularly jp. that's just like, hey, something's wrong, our horse isn't running. our athlete isn't performing whether it's rates or there is nothing left it's the action in and of itself today says something is not right. >> i was going to say few make a bet on rate, maybe buying calls

from bank of america, which is levered to a shift in the yield curve would be the way to play it they're just fought behaving leak the bets you should be making. we have news on general electric >> general electric restating its earnings results for the revenue recognition rule that took effect this year that requires companies to change the way they are koupthd on revenue in long-term contracts in light of that here's what we bought the from ge the cumulative retaining earnings impact is $8.4 billion less than had previously been stated for 2016 earnings, those were reduced by 13 cents and for 2017, restated earnings, those reduced by 17 pentz per shampl for the most part in line with the guidance we dot back if february here's what it gets fuchgy revenue the ref view counting standard impacted 2016 revenue

by negative 220 billion. nextive 2.2 billion. but the company in addition to these required accounting changes made chaings to accounting and methodology and pension accounting and some other things that it is accounting more. in light of that it is taking another $1.6 billion hit forrevenue in 2017 and a $4 hit to revenue versus its previous reported numbers or 2067 back over to you. >> morgan, thank you morgan brennan in the newsroom, traded up today, sharply up for the markets. what do you think? >> i think that maybe the magnitudes of these may be larger than expected this was expected. let's be cheer, everybody was anticipated a restatement. we got one what we fed to see is sort of a kitchen sink, let's throw everything out and start fresh

maybe may believe that babe it's a bottoming formation here >> you are looking at the space overall? >> ge will report 2018 guidance or as much as they have visibility to next friday, honeywell one of their competitors is reporting the week after that we have boeing i think the industrial space is importance we talk about ge every day, it's the worst performing stock on the market or the planet it feels like, one of the best stocks is boeing here's a stock down 10% on the year it's still, down 10% for its highs of the years ago still up 12%, massively outperforming the s&p, which is basically flattish i think this is an interesting space, much like the banks were interested into today's earnings i think the industrial space over the next weeks will be interesting. it can be interesting to tell, that's boeing chart, right in the middle of the 2018 range to me, it looks like a no man's lan, that's you who ip to focus how stocks act relevant to what

we expect for q1 who the heck know what is the forward guidance is, that's xh li honeywell and ge make up about 10 of that i want to fade this move here. you can see that down trends here obviously, there is a little more room to the upside, if this thing was to pop a bit i want to play for a move below 70 over the next month or. so becau-- or so when they reported, they will go lower. today i was looking at xli trading at 74 and a quarter, you see max expiration 7459 that breaks down to 73, you can make up to $4 between 73 and 69 to the down side. i'm targeting that prior low at about 70 there to me i like the risk-reward here, because i have participation down a buck and a quarter and i have a multiple of

what i'm ricking if i make the direction on this trade. >> what do you think of the industrial, claire >> i put it in this kind of a context. the market is still above the february 29ing flow. honeywell is below united technologies is below ingersoll rand is below. the whole sector perform on the mark that's a preview of coming attracts >> i'm not even going to bother asking about ge then >> we got ge's last week's trade as this. >> this is definitely the structure up to have you have some big components of this that really haven't been that hard hit. boeing might be the most notable. it's a different story tan ge is the structure of the trade makes sense. >> listen, we talked about boeing it's the j.p. morgan of the space. j.p. morgan reversed 5% from the pre market, 6% or something like that don't think boeing -- they will hit their numbers in q1 if they guide down for q2.

this stock will be on its way back to the low end of the range. it will take the whole sector with it. >> for everything "options action," check out optionsaction.com. while there, check out our news letter, don't be the only one fought reading it. in the meantime, here's what else is coming up. >> don't be such a skwa ir >> good advice, because square shares have been flattened from is one vent event that coud save it. tweet us your question at "options action. if it's nice, we'll answer it on air when "options action" returns. >> logical (indistinguishable muttering) that was awful. "options action" is sponsored by -- ooh. so, why don't traders have coaches? who says they don't? coach mcadoo!

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you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. i'm not really a, i thought wall street guy.ns. 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 welcome back to "fast money" the stock is up 62% for netflix. breaking it down is a man familiar with all the stranger things in the market. >> reporter: i don't know if orange is the new black, i know how netflix has traded more on that in a bit, it's been a roll ev coaster of a ride. according to data by reuters the company is expected to share 3.7

billion of revenue subscriber growth we learned are going to be the big metrics to watch as traders dig into this earnings report. that brings us to the anticipated trading action over the course of the past eight earnings reports, netflix stock has been a bit of a coin toss on a positive or negative day following earnings you have four up, four down. during that span, shares have moved up or down by 8.5% with double digit percentage moves up or down in five of those eight reports. as of now, we are seeing the positions pricing in an approximate 10% move in either direction him they will see if they can remain unbreakable in the netflix earnings, whether their name is kimmie schhit. mike is at the plasma with a special call to action.

>> reporter: we have a tossup, talking about possibilities. we want to pay attention to the fundamental also in mind the first thing we want to know is the stock going to go up, down, or side withways where is the stock going to go the second thing how much do we think it will move a little or a lot. finally, how much can you make or lose on thundershower u your trade? we are taking a look at netflix. we can see obviously here that the stock is actually not that far off of its highs this is kind of a coin toss here, which way it can go. we had good or bad earnings results. i don't like the way themark feels here, let's take a look at the trade i identified, specifically, i'm looking at the april 310, 290 put spread. sell these for $3, i'm spending $10.75 for a trade that could be worth if it go those that lower strike $35

let's pay attention to that let's look at the probabilities, here's a good looking guy some 98% of the stock gets to the strike we're buying, the 310s, snipe% it gets to the break even. okay it's a 36% chance that it gets all the way to that strike, where we make the most money think about this, this is better than a one in three chance it's going to be worth $35 if it gets there, we've spent just over 10 to do that all right. so we can basically say 36% times 35%, i think this trade is worth $12.75 and i'm only paying $10.75 for it. so i like the odds of the trade. i think this is the way you make a play in a netflix earnings >> how do you make this trade? >> we don't make the probabilities that oump, one of the things is to me probability has a lot to do with conviction, too, how convicted are you in a trade means sometimes how far you will reach and what the

probability of that reach, what mike is talking about, so in this situation, meek is buying a high probably put and he's selling a much lower probably put on the end of his put spread and that's really the way to do it you basically are saying, i think there was a low probably that goes 275 to the down side here i want to capture that mid-range here, you are putting the odds in your favor. i like the way you are thinking about it if convicted, you have a high probably of success. >> if you don't know how much a stock might move going into a catalyst like earnings, the options will tell you that, as dom pointed out with eexpect a 10% move, 10% about $30 bucks. that's kind of how we select those strikes the other thing i would point out is in this particular incident, we are looking at options one week from today. it basically will be win, lose or draw, we will know the answer by this time next week >> for me, i don't want to do

it, either long or short sometimes inflexion points are well definable another we can break out to undercut or bounce to me it's 50-50. sometimes things are 50-50 now, it might not be what you are thinking, this pop on earnings, sure a drop on earnings, times the way they do you that, but not this one >> trekky. carter probably or your probability? >> this is one of those sixes with the coin toss, if the move is 10%, it's a good trade. if it's a 50% chance, this trades away. >> still aheading one of the hottest trends of the year is flirting with bear mark territory. we will tell you the name, tell you how much worse it can get. we are live, do not go anywhere, more "options action" right after this 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. (a voby daft punk is heard bettethroughout.) (sound of typing) (sound of exhaling) (sound of drilling) jimmy (shouting): james! brand vo: the world's largest workforce works for themselves. we work for them. quickbooks. backing you.

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hotel, car and activity all in one place. ♪ 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? welcome back to "options action". time to take a look back at some of our open trades last month mike thought square had more room to run it didn't quite work out that way. here's what we mean. on "options action," it's our main motto, risk less so we can

make more. that's exactly what mike tried to do with his bullish bet on square after nearly a 200% run, mike thought square still looked pretty good. that's when things got ugly. [ music playing >> that's right, mellissa. let me tell you how it all went down, i like square. to make a different bullish bet, i decided to sell the april 55 put for $3.30 n. this equation, if square stayed above 55, i'd get to keep all that money, i'd even see profits if the stock fell slightly below that strike, as long as it stayed above 5170 by april expieration this is how things get complicated. i could be forced to buy a put even if the stock falls to zero. so to limit my rick, i then bought the april 50 put for $1.30 and created my bull put spread i thought it would put the odds

in my favor, here's why. between the 330 i collected by the high strike put, i'm still able take in 2 bucks on the trade in this scenario, $2 is the most i can make, even if square falls below $55, i won't see losses until it falls below that higher strike price by more than the $2 i put in or below $53, below that level losses do kick in, but they're capped at the lower strike put i bought. let me simplify this a bit i found a way to make money if the stock goes up, down, nowhere at all >> you are a genius. >> you are right about that. but this time i got it wrong how bad was it, melissa? >> since the time of the trade the stock blungeed 12% now "options action" fans all over the world are wondering one thing, what will mike do now so, mike, answer the question, what do you do now >> actually, there isn't much we can do the reason the has gone against us badly enough, if you

cover this trade, will you salvage maybe 40 cents the pay to think about it is if you are doing that, you are selling the 5050 call spread i wouldn't do that there is some chance the stock rebounds moving on here, dan made a bearish call on the banks last week so how are you managing this trade >> so at the time i think the xl lap is 2030. today it's 2745, april 27 puts for 55 cents, 2% of the underlying stock prices lost half their value here, we have bank reporting, i think you stick with this trade, will you get out of this thing at least for flat >> all right, coming up next a final call from the options final call from the options pits i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo!. zblrnlgs

you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.

i'm not really a, i thought wall street guy.ns. 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 . time now for the last call from options pit carter >> morgan stanley, throw goldman in there, too. >> mikeco. >> i think you can use put

spreads for morgan stanley >> xlf, i think you can roll the puts out, play towards may >> it looks like our time is expired, i'm mellissa lee. for more action, check out optionsaction.com. in the meantime, "mad money" with jim cramer starts right now. >> 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. (speaking foreign language) >> "be a believer. believe in god. he will never abandon you." (singing) >> what these holocaust survivors endured in their lifetime is beyond words.