we are live with the markets and the guys getting ready behind me. while they are doing that here is what is coming up on the show. >> this is the taste and the test. >> and he is a way to get long shares of pepsi for less than $2 as media companies compete with netflix, one company is kicking everybody's you know what wwe. and the chart master says beware, a body slam is coming. we'll tell you how to cash in

and -- >> you want to see something really scary >> check out the yield curve it is flat as a pancake and hurting financials it is time to risk less and make more. the action begins right now. and we start with that yield curve, like on old episode flat lining business stinks for the banks and financials continue to go lower. but the chart master says he found one safe space in the financial. let's get straight there carter, what are you looking at? >> focused on american express and what we know is financials have been the dream and a real misfortune for anyone who has been -- amex may be a place to do better.

what we have here, something that happened that only happened five times in the history of the s&p 500 sector five months in a row here is this month, barely started. disregard that basically, we are talking about one, two, three, four, five. how infrequent has that happened what is the outcome going forward? five months down and there is the arrow. there is the number. let's look at the data this circumstance has happened five of the times and the history of the data going back to 1989 and what happened there after. financials one week later, down, two weeks later, down, three weeks later down the odds, not always down but it is an average. but the odds of it being down

are high it's about the area of the market, i think at this point it is clear what to do, maybe something like this, if you have to be in financials, what we know of course, is that you have had a good response to this trend line repeatedly and we are here again. another way to draw the lines is as follows same chart on the top but the bottom relative performance and the selection one could make relevant to others and you have two things. a handle on the relative and a well-defined top from which a perspective reakout relative and a bounce off the line, absolute i think this is a very important stock, obviously, and it is a stock that i want to be in in an area that is not good. finally, look at what is going on here. the entire financial sector. it is on the neckline.

it's bad amex, not the case it looks like it is going to breakout and go higher i think this is a place to be if you need to be in a financial stock. >> how are you trading amex. >> one of the companies it may be outperforming them, they had management missteps when losing the cost costco and jet blue affiliation. the thing that does work though fundamentally for this company is earnings. that's what's going to be coming up on the earnings this thing is trading at under 13 times so the company is cheap. options premiums are elevated as they typically are making a modestly specifically looking at the july '94 and

'99 spending $2 on the july, 99 and selling the 104 for 40 cents. cost me $1 and trading right now. we are expecting options premiums to follow and going to be two days before that's a way we can capture about a 4% upside in a relatively short period of time and maybe a 5% downside move. >> what do you think of the trade? >> this is why i love option trading. i don't particularly love american express it falls in the middle road. he is selling swing options and the upside against the one call he bought. all you need is a little appreciation to the upside and the trade pays off here is a stock outperforming the rest of the financials in

the sector that is not doing so well and limiting the capital outweigh so i like the trade >> i mean, the critical thing here is also is i wouldn't compare them with the rest of the financial space. i don't think you would either. >> no, it is its own thing american express is different. is it risk-free? no i think in this current environment it is holding up well for reasons that are important especially given the rate. >> american express depends on upper income spenders. so in a period of economic boom when there is a lot of spending in that group. one thing you are going to get is relevant outperformance and we have been seeing that better margins and rates and a favorable ruling which we saw this week which is helpful

the idea was that retailers were not going to be able to provide certain kinds of incentives to discourage the use of american express which typically charges more at this point, it was a favor ruling they are going to speak favorably about it. >> you know, you have to be careful on the financials and one way i'm playing with it is sticking with names like american express and the credit card business and the insurance companies in a sector. part of the financials, the straight out banks i'm worried about. we have seen activity like morgan stanley, sticking away from that and sticking with american express i like that. >> kelloggs, sysco some of the names earning high

up more than 14% from low and brian is taking the pepsi challenge. >> i'm going to keep it simple they keep it simple, the learnings are coming up next week i want to buy a call, it is expiring next friday t. is either going to payoff or not. i'm buying the 110 call expiring next week. above 111.20 and i'm only risking $1.20. >> is this the way you would play pepsi. >> it is interesting going into earnings, we would talk about the desire to sell options to offset the elevated premiums pepsi on average moves about 2.2% which actually means that options are fairly priced. you're not over paying to make

that bet one thing we are seeing is activity going into earnings expiring next week i know you saw this activity we saw the weekly 113 calls training and those averaged about 32%. we are expecting the stock to move, a win pays uyou 2 to 1. >> what do you make of this? >> i think it is not specific to the company. it is literally a v. you can -- it's a money flow issue. that's what really moves stocks at the end of the day. if you get fda approval, you are going to go up or down this is a group move, nothing to do with pepsi. >> it is a group move -- >> and speaking to that group move, we saw a lot of activity and the utility and some of that

in the staples etf as well earlier this weekme to your point i think it is a broader issue than a single stock story. >> option call activity to the upside it seems to be in play now and two, this stock made a nice 10% or more move and when you have the momentum back to the upside, a lower interest rate environment that people are playing the nice safety stocks or whatever. i like replacing my stock, use ago call, limit something that a call option is priced at fair value and continue to play for the upside and reduce some of the risk being long off of all of the stock and i like playing with a short data call action. >> you can check out the website, optionaction.com. >> in the meantime, here is what is coming up next.

>> there ain't no misunderstanding hulk. beware the body slam, we'll tell you how to cash in. calling all options, reach in your pocket and tweet us your question on options action if it is nice, we will say it on air. "options action" sponsored by think or swim by td ameritrade 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?

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welcome back to "options action" there's a group of stocks that you may not know of quiet quietly surging. >> i'm not sure many folks know me, but it is nice to be loved some traders and investors loving the prices in brand names. let's kick off the look with a brand name, maybe a beer, sam adams they are up 59% just so far in 2018. if you are snapping up the vacation photos, maybe you are using shutterfly to turn them into albums to turn into gifts pushed by 80% this year and there is a home run like w.w.e.

which is higher and higher thanks to getting top that adolr up 150% in 2018. we're going to cap it off on a look at watch/wallet slash handbag company which is fossil on an absolute tear up, 265% just so far year to date one thing worth noting each stock has relatively high short interest some traders try to close out the bets against those shares. >> thank you and the chart master says one of the stocks run is done carter, what are you looking at? >> w.w.e. off of the top rope. and here to put it in perspective, number one and number two best performing stocks over the past 12 months,

well, w.w.e. up 270% and let me show you a two or three year chart to put the names into perspective. basically, plus or minus all three up 300%. you can see the numbers here 300, 299, 307. what is key is that w.w.e. plays a huge catch up. let's zero in on the chart itself but first look a the that that winners are all about, finding something that beats the bench let's go to the chart itself all right. this is back to '04. i want to compare this current run with this current run. take those lines away and take a look at this what we have is how far above

they are moving on average how far above? and is it reasonable to think that you're getting a check back so take a look at the next chart. this is exactly 90 weeks and this is exactly 90 weeks this one is a little more than that one guess what t got an upgrade this week the news that we now in terms of lucrative t deals. it has to grow into those things if you have these kinds of gains t takes profits and options and do something >> smack down, what is your trade? >> i'm wrestling with how is it going to grow into it. this is a name growing revenues mid to high single digits. that's respectable netflix growing at 30 to 40%

you can understand that more something else i don't understand, the price of options, in word wrestling is 30% above average. the way we want to make the play is buy the august spread you can buy them $3.60, sell the 65 against it and just a little over a quarter of the difference between the strikes and this will capture earnings which they are going to report the week after which i'm looking out to august i can't get my arms around the stock. it has a 16% short interest which might be what dom was alluding to, i wouldn't bet it would go further. >> do you like this trade? >> to carter's point, the stock had a huge run, is the right answer i like the stock a lot it is 9 out of 10 for us

it is relatively cheap -- >> cheap >> no the cheap but relative to other names that carter maengsed. >> what would your trade be? >> i love mike's trade in terms of buy ago put spread to head yourself here. the stock had such a big move. put spread is cheap. >> the model and everybody has models since i don't know a non-ranking for that by comparison, what does a netflix or amazon rank do they get a higher ranking >> when you talk about those names, you have to worry that the growth will continue w.w.e. had such a huge run up, you worry with theirs. so some of them get out of whack once you reach lofty levels. to that point, i love buying the put spread, there are concerns of whether the stock can continue to move like this

when you see decent growth, and the enterprise to sales ratio -- >> to seven sales -- >> when you look at the names, netflix up huge and i think it continues. >> got an options question for a trade sn trader, i know you do? let's get a check at the cameras. we're not the only one talking pepsi today, the madman taking the pepsi challenge and the next earning season at the top of the hour we are live at the nasdaq market next up. 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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>>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. . welcome back to "options action" let's look at our open trade. last week saying tesla heading for a crash. >> the stock whats a big short interest that short interest can create a possible level of downside support. you can spend $21 to buy one august 330 put and buy two

against it at $10.50 each. >> he was right. >> right now i'm staying with it because we sold two puts, nothing to that spread we need time to work with it here if the stock finishes below that 330 level it will be a profitable trade as long as it stays above 265. we are in the sweet spot, we need time to pass to see the value of those two 295 puts continue to erode. >> when you look at the technicals, it feels like it is going to hold the level and sit around wait for time to work for you, i like that. eventually it will payoff and the options when you sit around the short stripe i think you have to let it work a little bit here and decide before earnings whether you want to continue on with it or not. >> last week,s dan said morgan

stanley gearing up for more pain ahead. >> if you look at the one year chart, the 52-week low and finding support. you can buy the july 48, 44 put spread paying 1 dl$1.10. >> fear not, we were able to catch up with him in london england for a special update on the trade. >> hey, it is dan from london, last week we detailed a put spread and the stock was below 48 that put spread is worth a little more than a 155 for a 50 cent profit. >> it is incredible. by the way, we'll see dan next

week what do you think? >> it is an unmitigated disaster down 22% from the peak and it is the market trade the market is struggling and the morgan stanley -- >> up next, we have the tweets and final call from the options pits so lionel, what does being able to trade 24/5 mean to you? 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? [ horn honking ] [ engine revving ] what's that, girl? [ engine revving ] flo needs help?! [ engine revving ] take me to her! ♪

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you don't have to say i'm your best friend. (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. welcome back time to take the tweets, the first fan asks why buy a debit spread on w.w.e. if implied -- >> that's a great question and there is two reasons we did this we put on a spread so obviously trying to mitigate the volatility and this stock is moving calling a spread is dangerous exercise. >> time for the final call, brian. >> pepsi earnings next week.

replacing stocks with a weekly call. >> w.w.e. >> american express 98/52 close. and i think it is going higher. >> our time expired, i'm melissa lee. don't go anywhere, matt money, right now. the following is a sponsored program paid for by my pillow do you find yourself sleeping too hot or too cold, not getting the support you need to help relieve painful pressure points or struggling just to get comfortable? then get ready for a revolutionary, new sleep experience. introducing the my pillow mattress topper, the next generation in sleep innovation from the company that brought you the world's most comfortable pillow. [applause]