hey there. elon musk is trolled the tesla shorts >> there is no place like home. >> the housing trade looks a bit more like this dorothy, but there is one stock in the space that looks so bad it's good. it is time to risk less and make

more let's start with the bank stocks showing signs of life today before selling into the close. down 5% this year lagging behind the broader markets. dan do you think this is a sign of more pain to come >> if you thought the last two weeks was bad, heading into the class. wall street analysts were really positive about this catalyst saying this would save them but they kept selling into it, selg into it. it seems weird to me it sn able -- it isn't able to hold. considering what we're seeing in the economy here in the u.s., this is one sector very elaborate for the growing economy.

>> i think the price action is disastrous >> and the world bank index -- this is where the dream was. you're supposed to be long in industrials. disaster and it is getter worse, and now you're getting a pile on people are starting to abandon and it is the beginning of the end and the beginning of the beginning. >> i'm looking at morgan stanley right now. we know the results had rang wage th - language wasn't great. it is the 52 week low. i want to think about your q 2 earnings if they cannot rally into the q 2 earnings, i think we will see new lows on all of them. if you think stocks will con to

trade down into that earnings pr print. you can buy the july 44 or 48. selling one of the july on a quarter, your max risk is the $1.10. worst case scenario you're risking less than 2% of the stock price. i like the risk-reward in this trade. >> one of the things you look at for a trade like that is what the playout is and how much premium am i paying. this is slightly in the money already. so spending a $1.10, but it is

part of the premium. >> and for this particular area, especially more so, and jp morgan and more cities. >> for morgan stanley and it is equally problematic. >> and not u.s. the u.s., it is global bank. >> homebuilders on shaky ground, many names plunging in the last few months they are taking 10% down they say one of these names has a chart so bad it is actually good >> weakness is either an opportunity or a trap.

oklaho home builders are down for the year, i thought i would single out toll they did something they have never done in the history of the time, it has a peak decline of 32 penn 32.3%. so a threefold wipe out. at some point they did so bad it is good. here is the toll chart over the past ten years i want to show you a overbought and other sold condition if tries to depict that a great under shoot or a overshoot has been probably. and i'm going to makele b lthe t

it is due somehow. the notion of support. we have sold off two spupports. support is not a plywood board or a concrete board, it's a mattress at some point you sink down until you find support i think with have done that dropping 32 plus percent so toll, look at this, this is it's relative performance. we when right to the pryor low, and we just started to turn up i'm going to make the bet that it will just start to turn here. a very important circumstance and a long term chart showing you that we're literally on the

prior low and i think we're going to hold. so i want to make the bet that it is so bad it's good >> this is the situation that sets up real well for options. i was specifically looking at the september 38 call. i spent $1.38. it was around 37.5 at a time you're spending $1.20. if it is so bad it is good you have about 10% upside. but if it is not so good, it is only $1.20 >> yeah, the stock was up that morning, the ceo was saying we

know what head winds are, off set by a wage increase or something like that. i think you can do the same thing. pick a name. i like mike's spread, i like the risk reward. but here is the thing, i don't think they acted particularly well and it is lower than it was -- >> yeah, they down 50% more than that >> that is predominantly equal weighted etf of home builders. they have home improvement names and -- >> no, do you had a pop in lows

like oklahoma depot. it is really just straight down. >> when you talk about the home depot is not so bad it's good, it is pretty straight forward and lowes too if is a tricky bit. and with options we have an opportunity to make that bet >> i think the fact that it is flat, and we have yet to see earnings it helped the fwgains until the end of the week. i thought it held up okay. >> for all of the options actions, check out our website we know it is hot outside but our cool newsletter will give you the chills what are you waiting for

>> we're going too fast. >> that is what is being said about tesla. and calling all options actions fans tweet us your questions at options actions. if it is nice we will answer it on air 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 your insurance on time.

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welcome back to options action eight years ago tesla when public >> the biggest controversy right now whether or not tesla when they release their production numbers, did they hit a production rate for the model 3 of 5,000 per week. he says those doubting his company are in for a rude awakening. analysts are all over the place. some say 3800. it is a tent, outside of the tesla factory, elon musk is using it as a third assembly line they're trying to crank out the

model 3. as you take a look at shares of tesla, he was warning one analyst earlier this week you're in for a rude awakening if you down we will hit that production number >> phil, thank you joining us from chicago. if you're a tesla hater out there, we have a way to be against the stock for no test at all. >> i done think i want to buy a car built in a tent, that is just me. we're looking at a one by two foot spread. one of them is that options premiums are really high we were taking a look at where the at the money call was at $60.

we have a lot of kcatalysts that could propel the stock, and the final thing is a structural situation is the short interest that can create a possible level of downside support. we see where the stock is, the high was about $3.80 and we had to come down here -- i think it is unlikely i was looking out to august. you could spend about $21 to buy one august 330 and then you could sell ten for $2.50 each you want the stock to go down below that strike. those are going to start

drifting off those profits as the stock continues lower. net net you get long in the stock if it drops down as we take a look at this, this is a strategy i have used efrl times, i had one that expired last week. these options will be faster than the ones that you're long if the stock doesn't go anywhere, you could see growth here as well >> so it is kind of a perfect stock to buy and sell. they may hit that 5,000, and then they also said they don't need to raise capital and then they may so this is one of those -- mike just said worst case scenario, it could be a scenario where you better be prepared to have

losses >> i think they will need to raise capital, but 30% sort in this if it drops you will see people covering those shorts for sure. and when it dropped it was about 22% covered. >> this year's low, putting that level in perspective march of 2013 at $25, it went up tenfold in a one year period and hit $250 and that's where we are now. we hit a low at $250 all of the repricing, they were ahead of all of this the question is is it the pause

before the next -- was it essentially all priced in in that one year. that's my understanding. it was just stuck and it just belongs here as it cons to grow. >> if you put up chart and you say this period of dormancy is building a long base and the longer the base is the higher the break out. >> or the more authority to the level -- the more authoritative the resolution but the debate is still on >> one quick thing, elon really goes after the people -- i would not take that kind of risk i love what he is building the real issue is i think he needs a capital raise. i think people will be shaken a few times before it is done.

>> i was on the 101 from sfo into tuesday, and i saw two trucks loaded with model 3s. >> they have eight or nine and he needs 5,000 we need a few more trucks. >> we'll get delivery numbers next week. go over to cnbc for more we have bad news for one of our traders. more options actions after this. . 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. moderate to severe rheumatoid arthritis was intense. my mom's pain from i wondered if she could do the stuff she does for us which is kinda, a lot. and if that pain could mean something worse. joint pain could mean joint damage. enbrel helps relieve joint pain, and helps stop further damage enbrel may lower your ability to fight infections. serious, sometimes fatal events including infections, tuberculosis, lymphoma other cancers, nervous system and blood disorders and allergic reactions have occurred. tell your doctor if you've been someplace where fungal infections are common. or if you're prone to infections, have cuts or sores, have had hepatitis b, have been treated for heart failure or if you have persistent fever, bruising, bleeding or paleness. don't start enbrel if you have an infection like the flu. since enbrel, my mom's back to being my mom. visit enbrel.com... and use the joint damage simulator to see how joint damage could progress.

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upside >> nike soared hitting a fresh all-time high nearly up 8% now what are you doing >> if you follow us on twitter i said to cover this trade today i took a look in the past ten years, only twice in ten years the stock ended up below it's preea pre-earnings level >> it gets cheaper when it goes up, it needs a reset. >> this doesn't feel like a short squeeze. it feels like people are piling it in, barring a trade situation or a global mark sell off it will stay up >> i would rather be positive than short

we have hostive news coming out of china we were looking at these things, someone had a good sense of what was going on overseas and now we're earning. earlier, dan said shares of fil philip morris was going to heat up >> it is starting to look interesting around 79. july was 85. to the upside -- >> and they did. the stock rallying more than 4%. >> yeah, it is really still consolidating. options working out pretty cheap. it moved into the money, and one

of the things it was targeting was those earnings so here is what i do if it floats up a little bit take a double on the position. who knows what will happen, or often tombs i will roll that up little bit if i'm expecting a sharper pop. >> yeah, they have rallies -- >> so yeah, doing well, likeability is not usually in the sam category but that's how i like it. >> everyone is convinced and going higher, now they're stuck at best. >> up next we have the tweets and the final call for options complicated, you know? so

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 does it look like i'm done?yet? shouldn't you be at work? [ mockingly ] "shouldn't you be at work?" todd. hold on. [ engine revs ] arcade game: fist pump! your real bike's all fixed. man, you guys are good! well, we are the number-one motorcycle insurer in the country. -wait. you have a real motorcycle? and real insurance, with 24-hour customer support. arcade game: wipeout! oh! well... i retire as champion. game hog! champion.

(sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, with td ameritrade. ♪

welcome back to options actions. how do you handle papal? >> yeah, if you're going to target a turnout, it should be an earnings event. i would consider selling on downside and buying on an upside call we talked about it with micke's one by two, consider selling and buying at an 87.5 call not a lot of premium time for the final call from the options pits >> so bad it is good >> i think you can use call spreads to make that play.

>> and i want to expand on that. if you're long tesla, it could be a good hedge. >> "mad money" starts right now. if you are one of the millions of americans who suffer from muscle cramps in your legs or feet, relief is finally in sight. hi, i'm dr. drew pinsky. and today i'm here to share some news that got me excited when i first heard about it. it's called theraworx relief. this life-changing product is clinically proven to quickly relieve the discomfort of muscle cramps and also prevent muscle cramps before they start. now the word breakthrough gets tossed around easily these days, but theraworx relief is the real deal.