this is "options action" on this friday. here's what's going on in the show >> maybe not, because according to carter worth, something in the chart suggests there may be no happy meal for investors. we'll break it down. plus, risk one to make five? dan nathan has a way to do just that if chip stocks move just 8%, he'll break it down. and ralph lauren shares are

nearing one-year highs but if you missed the move, relax. ls there is a way to make it long for just two bucks the action begins right now. >> let's start off with a look at one of the hottest groups of stocks in the market that all of a sudden are not 8% down from its recent high this as a number of groups trade near correction territory or worse. advance micro, micron all flirting with disaster, so should you stay away from this chip wreck >> i think so. you said it's down 8% from all-time highs but it's really had a bounce in the last month or so. the way i think about this is this amat news today was really bad. they printed a quarter where

sales were up 25%. down only two and a quarter percent and the stocks are down 8% they're getting a little uneasy about the guidance they're hearing, but one of the biggest bull stories in all of chips is micron they're going to host an analyst meeting next week. when they reported in late march, they had a beaten raise, still down considerably from its recent high. i think this sets up pretty interesting. if micron can't rally after their meeting next week, i think you have a charter where you could see this thing come back below 100, possibly as low as 95 last month's low here. we're going to talk about this a little bit tonight here, but right now i forgot to talk about what exactly a butterfly is. it's buying a put spread and selling a put spread and in the

middle they kind of overlap a little bit you can look at the july expiration, and by july 105. i'm selling two of those at 1.05 or $2.10 total you buy the one that will cost you $2 your break evens are down at $1.03. that's $2 in premium and the strike all week long you can make up to $8, okay? you can actually make up to july expiration between '95 and '97

the stock is below 85. that's not the stock closed at 1.0465 >> when is learning options when thisshow first started -- i'm still learning options, by the way -- the thing to remember is you sell the guts. the middle part is what you sell and you buy the rest >> if you're targeting a direction, you want the underlying or you're expecting the underlying to walk to your straight shots one of the things about a butterfly that we sometimes have i hope we have this within two

months that can actually make a lot of sense, though, because considering what kind of move that is. you're making a bet that will decline approximately 10% over the next two months. take a look at the that is the lower end of that range. the reason r maybe if it hits 1 195. >> basically what we know happens is this very important learning is basically, if you look at a 20-year chart, for the better part of a year, year and a half, we've been churning at that level it, beginning of a head on

shorld we p you were getting drops, and if you look at the index, the index isn't seen as big as it is >> it's down 20% from its highs. they're the ones who make these tips for outsourcing here's the thing about this trade. this is really about fundamentals it's not about my charts or my lines. they help form the strikes of this trade structure, but if we get the fundamental story right, if micron can't rally next week after, say, good news at their analyst's meeting, investors are going to start discounting the cycle to be ending sooner than later, and then you'll want to outsour outsource. jack in the box falling nearly 40%. let's get to dom for all the

details. hey, dom >> we might not get hit with some data points, but the rising cost is certainly noticed in the restaurant implications. melissa, you mentioned that jack in the box and then talking about the rising it's not just going to be for him but. and mcdonald's has remember. a full increase around 2%. it says worried about the current inflation environment. for instance, the parent company of longhorn and.

but that one place they are seeing rise gs a truck driver shortage has driven up the cost of getting all that food around to strauts. they'll be keeping that watchful eye on whether food costs show signs of that is food combined with labor are big and key should we be worried about the fast food space? >> restaurants in general have struggled, and obviously, if you're going to get it down to petitio petitions. the u.s. is one of the biggest consumers of potatos you have them designated as a restaurant 300 total. names, names you know.

not potatoheads skpl this is the who's who. it's everyone who is listed. i want to just take a look at this index it's these securities which basically, here's the thing, haven't made a whole lot of progress in the better part of three years. this is a five-year chart. so to put that into perspective, what i've done is give you a relative chart to the. we know that performance peake in 2015 and even as basically the. equities as an asset class which

brings is to one of the biggest on the board take a look, of course, what it's done relative to the s&p. the here and now is the issue. mcdonald's is stalling, has solved, and what we know that mcdonald's never was able to smak even though one is making money, the opportunity cost was greater than the money made because you could make more money somewhere else or equity in general. here's the way i think you can draw the lines what we know is this is a fairly well do i understand do i understand we finally cracked.

to -- talk about head & shoulders. this is a there's your neckline. and the bet could be, we're headed >> mcdonald's has been doing very well recently terp of those -- >> they brought in fresh beef hamburgers >> wit until you see the other two items. >> once you've cut $500 million in g and a snp what would you sns i would think of using a

structure msimilar. mine is called the broken wing butterfly. buying one of the 160s, selling two of the 150s and covering the bottom prime >> actually. which you can in a conventional flight once it goes -- that's still the sweet spot but what happens if this thing really falls out of bed, you're spending $2.20 even if it goes down below that. selling those other two, that's sort of the way you can make a

fly trade. >> a his variance on it makes a lot of, because my scenario is if the stop sign tls. i just think the money is in this strategy because we want very near money participation. to keep us in the game over the next two or 30 it's also going to reduce your margin requirements substantially because your. >> maybe fpt as much >> got a tweet out there send it to everyone.

tomorrow is the royal wedding. don't miss it and be the only one watching this thipg. -- thing. 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

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.

retail is on a bit of a hot streak although falling today. the s&p up this month and following the broader markets. it could be make or break for the group as we check out the latest moves the retail market, around 8% for michael kors, around 10% for foot locker. should you shop any of these >> we'll take a look at ralph lauren here, and as you were just pointing out, there were some pretty significant implied moves. when those implied moves are large, what does that tell us? options are expensive. we still want to be able to use them how do we go about doing that? ralph lauren, 7.7% is what i saw earlier today. i want to make a bullish move in

this stock we are up 11% since the beginning of the year. worst case, if i do end up opening it, i want to have it closer to where it was before. we can see right around here, we're looking at the 100 level, essentially, as the down side, and right up here we're right around 120 is essentially the up side the trade specifically i was taking a look at was the 105, 115, 125 call spread you can buy the calls for 125, then sell for 1.50 net you're going to see profits above $1.17 and where you'll sell the stock is right here around $1.25 we expected it to move on earnings maybe 7, maybe 8% we're going to miss most of the

losses on a down side move about that size. and finally if we do have the stock put to us it's going to be down at a level where it's not you can essentially own it where it began the year if it doesn't work finally, let's go ahead and take a look at what the probabilities are here first of all, one of the things we can see is stock was $1.15. so there's about a 100% it will get there. we can also see there's about a 40% chance of getting to where it was short and 48% to where it was profitable >> what do you think of mike's trade? >> this is really important. we talk about the different uses of he cequity option. he's created a trade structure

based on the probability of outcomes, based on what the options market is implying for this thing he's selling a put at a level that if he was put there at 9.05, this is better than if he was to buy it at $1.15 i would view this as almost a long stock replacement and using it for risk management purposes rather than buying the story here >> it has so many beaten-down retailers. a long, a wipeout. and then things like aber krom bee and und -- abercrombie.

i think the projection is good sdp sdp >> real money is basically supporting the stock this is an exact opposite situation that you see in someone like campbell's soup, but everybody is fleeing the trade. could the rally be running out of steam plus, have a question for one of plus, have a question for one of our traders snrl you . much more "options action" right after this trade after the. 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.

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plus, ask how to keep your current phone. visit your local xfinity store today. (indistthat was awful.tering) 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! mad skills. education to take your trading to the next level. only with td ameritrade. that's not such a great thing for those. >> it captures the sector.

it's a perfect double top as we know now we're reapproaching it we're almost at the top of the line my hunch is that you will write calls or this kind of thing, because we're likely to work into the apex further. i think it will go quiet here after surging. >> what i was looking at was the may-january '73 put spread >> the xle is up. how did you manage this trade? >> we had a feeling we might be range bound in the near term actually it ended up continuing higher, but you can continue to sell some puts against the one we own, basically offset that decay and bet that we are at a near terp top here >> crude got a lot stronger, obviously, since we put the trade on

>> now stl -- >> it's porcht to remember th >> it's important to remember that about a month ago, you could buy it at 78 there are short-dated out of the money against it up next, your tweets and the final call 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 with a $500,000 life insurance policy.

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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. a first fan says i got assigned on a credit put spread. now what can you explain the strategy >> if you were signed on a credit put spread, you actually now own the underlying, and if you want to still be a premium seller, you can start selling calls against it however, if you are not comfortable owning the underlying, get rid of it, maybe put on another options trade >> seller. >> use a broken wing put fly in

mcdonald's >> after today, matt, i like selling into micron, but if you wait and micron can't go u my mission is simple -- to make you money. i'm here to level the playing field for all investors. there's always a work in summer and i promise to help you find it "mad money" starts -- now! hey, i'm cramer. welcome to "mad money. welcome to cramerica trying to make money my job, entertain you and educate you. call me. cnbc or tweet mere at jim cramer close watchers of "mad money" know i'm not a chart but play them