hey there. live at the nasdaq on this expiration friday. the guys are getting ready behind me. while they're doing that, this is coming up on the show. >> snap out of it! >> shares of snap did just that. rallying over 20% in the last month. if you missed the move, we have a way to get long from less than $1 plus, micron shares have surged 20% this year but carter worth says there's something in the chart that suggests now might be the time to take profits. he'll break it down. and -- something is wrong with the

chinese stock market. >> what? >> the poison you just drank. >> and it's inspired dan to come up with an options trade that can triple your money in just two months he'll break it down. it's time to risk less and make more the action begins right now. ♪ we start right there with chinese stocks taking on this week trade war talks heat up. eft and fxi down around 3% will the stocks be the big losers in the tariff tantrum let's get in the money now take a look. >> let's talk about that shanghai composite it's been hugging the 3,000 level which, you know, over the last few years has been an important level. just doesn't act particularly well on a week we saw the tariffs come on play we know china is coming back

hard here. the s&p closed flat but the shanghai closed at a new 52-week low today. it brings me to the fxi, which is the large cap stocks in china. very heavy industrial. this is a group i think would actually see some investor weight on them a little bit. there's the one-year chart it's been bouncing off $46 a little bit i think it's interesting this week we saw some retail sales data in china that has been the weakest, or at least the weakest rise in 15 years there was other data that was particularly weak. i think the president knows we have a little leverage here with china and they can push forward some of the changes they want to do with trade. this could weigh on these stocks over the course of the summer. so, you know, i start to look at the fxi and the price of options. they're pretty cheap almost cut in half volatility from the earlier highs in february, which kind of leads me to believe if you want to express a directional view in the fxi long premium trades, spreads, that sort of thing, is

a decent way to do it. today when the fxi was trading at $46.80. look to august expiration you can buy the august 47.43 and buy $1.25. selling one of the august 43 puts at 35 cents it costs you $1.25 and breaks even you can make up the $2.75 down to 43. here is the interesting thing about the trade. it's a little bit of money i wanted to pick something right there. i'll let carter speak to the fxi. range has been trading in a range. i want to give myself the best possibility for profits, if i get a move down to the 46 level. >> i mean, the chart of the fxi meaning if you're hovering at a low and hold once and then hold a second time and then a third time at some point, the odds you don't hold you don't keep giving it a chance this is set up for a break down, technically. >> when you drop the glass and you hear it bounce again and

again and again and you know eventually it's going to crash it's interesting to me that the price of options is as low as it is it is, especially for this time horizon. it's unlikely we're going to see any short term resolution. you expect the options premiums to be higher slightly in the money you're getting the nearly three to one payoff in terms of amount of premier spending i think the math works very nicely when you take a look at that it's surprising when you get an opportunity. >> it's interesting because we think of that as emerging market it's very heavy in chinese internet and you know the chinese internet has been outperforming. so when i think about the fxi, which is a lot of these state-owned enterprises. a lot of industrial companies. a lot banks. those would act worse if we started to see continued weakened economic data because a potential for increased, you know, trade wars that sort of thing that's why i chose the fxi. >> does it look any better >> what is interesting it broke

below the lows. >> to a group of stocks on an absolute tear. you want to check out the micron, nvidia up more than 30%. the chart master said the group could be running in trouble ahead. carter, head over to the plasma and break it down. >> sure. we want to fight the run at semis but at some point it's the rate of change emile rates, so to speak this is the scene of the crime this is the dot-com bubble we know the nasdaq composite think about where it is compared to the 1999 high it's up here where the s&p the case is the semis have been stuck, essentially, for the better part of the year contending with their dot-com high if you put in the line, you can see it here. remember, this is absolute if you were to adjust for

inflation, the semiconductors way down here. take a long time to get back to their high moving on, now here is the here and now. many ways to draw the lines. i think this is as good as any we've been stuck in this range and i think we stay stuck. moving on. now look at this relative performance to the tech sector again, semis have been stuck in this range what is important is that they are underperforming. the other choices one could have made in technology and then, finally, let's talk about micron you can see the chart. you can see the line you can see the following. off the line, off the line, off the line, off the line now here is the thing, we have the little bit of a prospect of having not made a new high my hunch is a next trip down the line

my bet to be short rather than long. >> mike, what is your trade? >> so the averages market is implying about 8% move one thing about the price action that he did not cover, term he didn't show is the volatility in micron one of the things that we may remember from the tech bubble, as stocks were reaching new highs the volatility eincreased. it's not usually a healthy pattern. it's the same pattern we're seeing now including in micron because of that the options premiums are a little bit elevated you add the cat lialyst. i was looking at july. you can spend $3.60 and sell the 50s for 90 cents you spent about $2.70. that's more than we typically would invest in a short bet. we're looking to, you know, 25 or 30% of the premium. it's a little bit more but i think it's deserved here and, you know, there was not a good opportunity in this name,

actually, to sell. i did take a look at that and, you know, those were not attractive, given how volatile stock is. >> your charting is interesting. want last high responded with the last earnings event. it was a great report but the stock ripped 30% into it there was nobody left to buy the next day it sold off 8% and kept going here we are now back before the earnings event option prices are high like 7 -- 8% in either direction that's not putting your thumb in the air and figure it out. i think it makes sense targeting the $50 level. you look at other troubling issues going on right now. semiconductor, taiwan's semiconductor is the second largest component which is the etf that tracks the stock can't get out of the way they make the chips. and the semiconductor equipment guys who are making the equipment for the guys who make the semiconductors

so these things can't get out of their own way. you have nvidia and micron people are so obsessed with. there's stuff underneath the surface that doesn't add up. >> it's happening at the 99 high. >> yeah. >> stuck. >> yeah. >> could a better trade to put a trade on the sma because they look sort of questionable at this point >> well, i think, you know, if you were to look at the options, you're going to find they're better priced. you have looked at smh in the last if the price action is bad, it's going to be bad for the whole space. this is a situation you'll notice the distance between the strikes. 57.5 to 50 the options market is implying a room for 8%. we're giving ourselves a little bit more room. the stock closed at $58 on the close today. potentially between now and july expiration, 10 or 12.5% downside, i think. >> you know what happens in earnings you get it wrong and the thing will be a massive directional bust the set up, to me, it seems like

a better bet on the downside all right. check out our website optionsactionson cnbc. check out our news letter. this is coming up next ♪ >> that's what investors in snap are suddenly saying. if you missed the move, we'll tell you how to get long for less than $1 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. well, it's earnings season once again. "options action" is sponsored by -- g 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.

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welcome back to "options action" social stocks heating up as the summer kicks off. julie sits down with snap ceo evan spiegel what can we expect >> i'll be asking spiegel about a range of topics when we sit down ground zero for ad platforms, madison avenue executives and chief marketing officers for the world's biggest brands to discuss the future of advertising. we'll be talking about competition with facebook, backlash to snap's redesign, and the recent boost to transform the closed platform. snap announcing yesterday it's opening up the platform to app developers and introducing s.n.a.p. kit which will allow ad makers to bring s.n.a.p. features to their apps part of that snap announced a partnership with pandora enabling pandora sending songs

through their snap facebook backtracks on the data sharing relationship with app developers as the access it gave developers draws scrutiny. that scandal is weighing on facebook's stock check out the performance. snap has been on a tear, along with twitter, facebook has lagged up 2% as investors weigh the impact of the scandal and the company's stock this year. in contrast, twitter is up 32% and snap is up 23% over the month. those gains, despite twitter falling 2% today citing the world cup as a catalyst for engagement in ad demand. tune in monday morning on squawk on the street when i sit down with snap cofounder and ceo evan spiegel. back over to you. >> look forward to that. thank you. if you missed the run in snap, don't worry. mike has a way to buy the stock for less than $1 he's going to show you how to do

it in the "call to action. >> julia mentioned stock is up 23%. it's moving sharply off the lows that's one of the reasons we'll look at buying options one of the issues is options because of that movement are fairly expensive we'll look to the spread and we're going try to find a fairly good risk reward. bear in mind in the stock was going to retrace the upswing we've seen, that's going to be $2 to the potential downside so i'm going to look for a move of a comparable magnitude. we've seen it up about $2. what if we can get another $2 to the upside maybe not take that $2 worth a downside risk. specifically looking at july and the trade i was looking at was the 14.16 call spread. i was looking earlier today you can see 75 cents with the call that means we get a three to one risk/reward relationship we can make a maximum here of thr

3/4 of the spread length because the options are expensive, we're improving the probably of profit when we do this because the stock was pretty close to $14 when i was looking earlier today. it may have ticked above it. that means we have a very high probably that it's going to get above $14. the probably it gets up to $15, which is close to where the break even would be if we didn't do the spread is merely 61%. we're improving significantly. and selling that 16-strike isn't a bad do why? there's only one chance in three it's going to get that high or higher by july expiration. a way you can risk 50 cents to make, you know, potentially as much as $2 not take the $2 worth of downside risk and the chances go down i point out since the company was probably traded in announced earnings, we've had one good result out of the five they've announced. the others have been sharply to the downside maybe the app stuff will work. so far they're struggling, i think. >> yeah. including in the last earnings report. >> yeah.

the company guided revenue down for the quarter. they talked about deceleration in the daily active users and spooked investors. when you overlay the 18 months however long they've been public they look very similar one thing that is important to remember is that twitter took years to bottom out. when it broke the ipo price to the downside, it got cut in half from those levels. mike is defining his risk makes sense. i want to make one more point about his choice of july it's up 35% in the last three weeks or so. he's picking this to go with just more momentum, up 2.16. he's not playing a fundamental this is more momentum. that's the thing if it's up 40 or 50% in the earnings with this be is probably when you say fade it. >> here is the risk, i mean, obviously we know that the stock plunged and we traced, and this is an impressive move, we are right back to the scene of the crime. literally to the penny in which it dropped in gap. after you drop in gap, you leave

the people above trapped when you get back to the point from when you gapped, they want to take their money back that's half of the supply. then you encounter supply from the bottom who have been paid a huge percentage and say maybe i should book it there's a lot of work to be done at this level. and my hunch it doesn't go anywhere. >> yeah. to your point, i mean, that run up 20 plus percent in just a month it's hard not to want to take money off the table when so many of the earnings results they've announced have been so disappointing. and they have been this, obviously, a little bit transformative to say they're going to open up the platform. but just because you open up to developers doesn't mean you're going to increase the users. i'm not necessarily sure that's going to be the case the pandora thing seems interesting. >> the jury is out on that t >> the jury is out on everything the jury is not on spiegel investors and wall street thinks he's an innovative product guy

you talk about a company with a $17 billion market cap trying to compete with guys in the next few years investors will think will have trillion dollar market cap. this is a david and goliath thing. evan better hit the weights a little bit beef up. still ahead, apple shares stuck in the mud this month. that's great for dan plus, looking at the madman himself. jim cramer on the cramer cam l atndo alth a me at the top of the hour more "options action" still ahead. 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

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and 1.90 banging around at that level today when the stock was trading at 1.90 you could buy the june/september 195 call calendar >>well, apple did rally but has given back the gains that's perfect your trade. >> the idea to target september. the iphone cycle and fading the software event here now you have the june lag that you were short. that helped finance september. that expire is worthless you're left with the $1.95 call. those profited a little bit. i would look to july expiration now and turn it into a calendar again and sell the july at $2. at that point, you have the july/$1.95 call collar you have reduced your premium risk to $3.50. >> it's been under performed the nasdaq 100. >> we had the minor range. and we have a minor break out and now have given back the gain

we're back to what would be support associated from the range that broke out i think it's fine. >> all right also, two weeks ago carter and mike said bio tech is gearing up for a break out. >> ibb and the channel it's been in since the low literally a perfect channel. my thinking we're at the low end and heading to the high end. >> i was looking at the july, $1.03, $1.10, $1.17. buying the 110 for $2.65 and selling july 117 for 45 cents. >> shares of the ibb bio tech jumping over 1% since the time of the trade so, mike, how are you trading the ibb now? >> jumping at 1% we haven't done anybody any favors here. >> yeah. so, you know, one of the reasons that we sold the upside calls

and the downside puts to justify set the affects. we have done that. trade is probably up small at this point, as the stock is. we would only have a stock put to us at $103. that's down about 7% so, you know, i don't see any harm in sticking with it. >> and the data rally performance to the market is constructive. >> is that a place you would be? >> i think it has a defensive element to it. it's dominated by the big up names. >> i look at the space and say so far off the highs it did make a move back here and it seems like it's getting narrower and narrower as far as the stuff winning and people sticking. >> it's not winning it's the -- >> yeah. >> yep i think they have their beating. >> yeah. i don't know whether or not now is the time to draw a line in the sand we have a cushion of about 77% i the downside up next, we're taking your tweets don't go away. well, it's earnings season "options action" is sponsored by them or swim and, how's it looki?

>>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.

snap ceo evan spiegel answers his critics and reveals what is ahead for investors.

squawk on the street on monday (indistinguishable muttering) 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! mad skills. education to take your trading to the next level. only with td ameritrade.

time to take tweets. should we use quadruple exploration in the directional strategy a great show we learn a lot what do you say, mike? >> they say witching that sounds scary. triple witching is scarier i don't look at that much. if you're looking at expiration, you ought to concentrate on the open mission but other than that, i don't focus on that. >> this one is unusual the next tweet comes from our executive producer maxwell meyers who asks who's a big boy today? who's a big boy today? carter >> this happened -- >> happy birthday! >> happy birthday! >> you got tweeted in on national tv? >> big surprise. look at carter now time for the final call. carter, what do you say?

>> micron. get short before earnings. >> call spread for that. >> every three months we get a special page helping us with the production show. ryan fish is the guy. >> great job, ryan od lk!gouc our time is 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 cramerica other people want to make friends. i'm just trying to save you some money. my job is not just to entertain but to educate and teach you so call me at 1-800-743-cnbc or tweet me @jimcramer. so the president socked the chinese with tariffs on $50 billion worth of merchandise and investors, what did they