hey there live at the nasdaq market site on the steamy summer the guys getting ready here is what's coming up op the show >> don't be a. >> good advise because despite a 100% gain this year, the chart master says now might be the time to sell shares of square. pete will break it down. plus. >> he is so fine. >> what do these two men have no common. >> they're both really good looking. but only one has a way to make money on tesla earnings. mike kko he breaks it down.

>> worry about many shares >> you bet your butt. >> dan nathan has a way to protect profits into next week's earnings for almost no money it's time to risk less and make more the action begins right now. >> we start with apple, the last of the megacap tech names to report next woke stock sinking 2% getting hit with the rest heft of the mock fate of the tech rally could hang inle balance of this report it could move in either direction. that's nearly $40 billion in market cap after the crush this woke if you own apple how could investors protect the profits? look at the money right now and dan as the i protection trade. >> we had the struggle with ffb down what 20% yesterday $120 billion in market cap. the rest of the market responded we saw money into other areas and didn't take down the tech market today a little bit of different story, he we saw megacap tech

stops get hit a bit. so apple reports on tuesday, the last of the megacaps and the biggest of the megacaps. 940 billion i know a lot of people are expect going to tick $1 billion, 6% from levels where we are trading right now when you think on earnings on tuesday afternoon. options market applying about 4% either direction that's how much the stock moved the last four quarters you know i'm not expecting the upside move greater than that when you look at the way microsoft, gogel and amazon and sponed to better than expected results. they had a nice little gap all new highs that sort of thing. to the tune of 2 or 3% to me you focus on what facebook did this thing the apple has had peak to low sell offs back to the lows in february the 16% draw down and

in april it had a 12% draw down that chart is interesting. i know charter flagged that $1807 break outlevel a a few weeks aig agoe to come back to there is some technical resistance above the highs to me we talk about broegts. use options tactically around long stock positions one way to do is a caller at add the money call out of the money put against the long stock position if you more worried about the dramatic move to the downside than you are to the drama move to the upside here is the trade simply look to august expiration, target tuesday's earnings here when the stock trading at 1907 today you could look out to august 200 call and sell one of those versus 10 oh shares of stock at $1.40 you could use that premium and buy one of the august 180 puts for 140 that costs you nothing this is how it works oh out after this earnings event. you would have gains from the stock. s 190 up to $20 that would be

where the gains are kept if you kpt it through the expiration if the stock is above two hundred you could buy that call and keep the long stock position in place. then you have losses down to $180 that's the key technical support level but you'd be protected blee this. this is a tactic willing options strategy to use it in long position when you want to keep that position intact. >> mike what do you think of the trade? >> i like this trade and i think this is the thing that people ought to be thinking about when you see trades like this callers, the really the question going into earnings is if you expect a modest move if the earnings results are good you are still getting to participate in that. but if there is a shari sharp move is that more likely to the down side or upside. we had the answer this week any disappointment is severely punished that's what this protects against. you own the stock if it has the modest upside you keep it but the big move to the downside

that's the insurance i like it the. >> all the fragility in the market is in this particular type of stock, meaning supercap, growth names that be unto itself so we know that there's been trouble in industrials and financials we know that global equities struggled what we see after earnings is that if you were good microsoft, google, et cetera you only went up a bitted but if you bad, you got murdered netflix. red hat. you have a situation where apple if it's good doesn't deliver much but but if bad you get the outsize move to the downside that's the risk. >> cartser we are talking about the he stocks 800 billion market cap sexton right now obviously apple at 940 is it harder to push them up who is the incremental buyer when everybody heads to the door at

the same time we get what we had with fischer yesterday. >> the thing about the trillion dollar -- what we know is term of sheer cap kluvered at the top it's been this way 18 months the top five stocks in the are working more than the bottom 270. think of intel very bad it's spilling over into tech and growth that's where money is hiding that's the risk to the market. >> let's say apple goes to 200 what do you do with that. >> it's interesting. basically you could get called away if the stock is two hundred which are long 100 shares short one of the calls stock is matched up against the short call but, again, this is a strategy that you want to do tactically not too frequently you were not paying anything for this but you only do it if you are more worried what carter described as this kind of asmrk risk to the downside versus the upside. >> now the other big earnings report that is tesla shares of auto maker following 3% as famed short seller receive

stee steve iceman shared he was short shares of autoic maher might remember him from the big short. this as comes up to report earnings phil low bow here is report on that. >> the earning report will get plenty of attention. and there is one primary question on the mind of investors. what will tesla say about potentially raising capital? now in terms of the earnings themselves for the second quarter tesla is expectsed to report a loss of $2.81 on revenue of just under $4 billion. the imimplied move in the options market is 7.5% either way. three things get plenty of attention on the conference call what do they say about raising capital? we no he elon musk said the company doesn't need to do it. but keep in mind they had cash burn and liquidity rirns into the had second quarter and they did a lot of expansion for the model three. speaking of the model three

where does it stand in terms of production and reservations? there are plenty of skeptics out there in tesla and there is one talking about that in his skepticism in th last couple of days it is noted short seller steve iceman. he is outshorting tesla shares he basically said he believes in a company with execution problems the stock has been hovering around $300 a share. it took a hit earlier in the week over concerns about whether or not it was pressuring suppliers because it's running low on cash. as always, the conference call amp the earnings on wednesday afternoon, that will be the main event so to speak when elon musk answer -- takes questions from analysts as always you never know exactly what elon is going to say we will be on the call and we'll have it for you next wednesday afternoon. melissa. >> all right phil thank you remember lass earnings conference call elon musk boring, bone headed question refused to answer. how do you splay tesla into

earnings chart master head over to the plasma break it down. >> let's see what we can figure out. lots of opportunity lots of risk that's what the form ones are. here is a year to date chart all over the place high pressure li. process has no character some people think good some bad basically chopping everyone one range under bound and see what we can see put in some lines the first thing i point out if we move forward sorry i have hit the wrong button perfect. now beautiful trend line, right. what we know is that we have found this trend line three times but what i want to focus in on this is this rear. what we have done now is we have broken trend you can see that we are for the first time below the trend line. that is the problem. i think that's the setup for what's going to be a pretty good break to the down side moving forward the next chart longer term, no lines let's put the lines in here we go so there is that same line

right. and there is the breck if we were to zoom in -- again i want to just focus on the fact that for the first time we cracked below that minor trend line let's put in another line, here is the top and what you have is a lot of tension. and this is the co if you do break above a downtrend line in principle that's bullish which is what this is. so the problem is by drawing people in and then now undercutting the line right which is what we have done now, the real risk is is that ultimately we are going to now crack in a big way this is not a good setup i think if one's long tesla take measures however wants to do that and if one is a short seller this is a good candidate. >> mike how are you trading tesla. >> this is of an interesting one. i mean selling tesla short is obviously a very challenging thing to do. and right now options premiums are about as elevated they heavy

been in two years. we're almost three standard deviations above the mean level of volatility that's the price of options i think the thing to do is look for opportunities to collect some premium from selling the elevated options also berg in mind that a high short interest on the stock about 27% of the float could create some support if the stock does fall after earnings what i'm doing is looking out to september opinion the 310, 340 call spread i could sell they'll for. $20.40 and then buying the 340 spending $10. that's where i collect the net credit of $10.40 the idea if it stays essentially below 320 i collect the premium. and having that upside call offers insurance if by some surprise the stock managing it regain prior highs which i don't expect i don't think the earnings call is necessarily going to answer all the questions people have. look to it bond prices in tesla over the course of the last

year exceptionally weak, junk at this point. having fallen 10%. clearly the credit markets are not overly enthusiastic for tesla. i think the equity market may follow the same direction. >> it's interesting that mike mentions the credit. i don't know if you guys have been paying attention. but cds credit default swaps have been recently listed on her tesla. at one point this week in thin trading it was implying about a 40 peppers chance this company would default on a debt payment over the next six years. that spooked i think investors a little bit but here is one thing this is the interesting setup. carter made a compelling case why that failed break out to the upside and now the break outabove the up trend is setting up for a big gap lower and then when you consider what mike's trade is doing, i mean mike's trade is taking advantage of the elevated options prices but not playing for a massive gap. he is playing for high probability of a mall win and a deents pblt of a okay win but the not lights out trade

there ises a lot of ways to skin the cat. if you you are convicted as carteder you ma i want to consider the long premium strategy. >> this has been range bound stock. there is something insidious about drawing money that's what the break out above the line is. that money starts to see losses. it becomes an accelerant, the thing that took it up has to unwind and cutting below the trend rein then sets you up for something worse. >> is the next stop the previa low of 240ish or so. >> has that look. >> mike, last word. >> yeah, i mean i would quickly point out this woke has clearly indicatesed that once high flying stocks actually may be more vulnerable than we think. to dan's point tlltd be opportunity theoretically to play the downside bet for a bigger move by bying puts. personally i find them a bit tovi expensive here that's why i'm looking to collect roo premium with the credit spread. >> got a question out there end us a devote for options action checks out the website options

action dot cnbc you can checkouts the superschool news letter i will be read going on my vacation. here is whaels coming up next. >> be square. >> and with 100% gain this year. it sure it but there is something in the chart that suggests now might be the time to sell plus calling union options action fans reaching into the pocket, grab the phone and twet us your question as options action if it's nice, we'll answer it on enr. wh options action returns. 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. options action is responder by think or swim by tdameri trade tr 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.

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 it has indeed been a bad day for jack doorsy as twitter saw the worst day in two years taking square with it. back to dom chu to get the details. >> the market giveth and taketh away for everyone. but if you are jack doorsy the taketh part may hurt more today. shares of twitter had a facebook lake slay after the had a disappointing day with the user accounts and forecast. and from the end of last year through the highest in mid-june shares doubled in value for twitter, not bad for dorsey, the ceo and coveder of the company but from the highs mid-june through today the stock lost a quarter of the value that hurts but that may be made up for a bit by square stock which has had a tough couple of days as tech related stocks sold off but the payments processing company that doorsy is chief executive of and founder of still managed to hit a record

high in trading today before joining the rest of the market in negative territory. upon a year to date basis it's still a double the share stort started off the year at $34 and change and even with the two-day losses we have seen it's still a massive gain so they are both doing pretty okay but in a strange twist square is doing so well that it's now worth about $28 billion compared to $twitter's $26 billion. square now worth more than twitter. twitter in the books and in a big catalyst on deck earnings for square after the closing bell and traders already pricing in a expectations for 7.5% move up or down fair to say that one is solid maintains up side but watchers worning about the down side. >> dom kmu the chart master here says that square's amazing run may come to an end carter.

>> let's talk about the definition of the uptrend. this is what you say is god-like literally up to the right north by northeast never too hot or cold if you put in a line we can see that right here. this is a well defined trend line and so forth. what i think at this point is that we know that uptrends will have check backs and often get back to trend and we are due for that right around now. let's just zero in on the more specifically and take a look at these -- the drawdowns the stock had. i put the zoom on here we know the stock dropped 15%. yes, it dropped 12 it dropped 8 it dropped 8 again it dropped 8, 10, 29, and so i would just point out it's perfectly normal to have a give back let's put the line back in and what i'm thinking basically is that the stock closed at 69.85. just to come back to trend which

it's done about ten times, 62 plus, minus where the trend line comes into play. that's about 11% it couldn't mean a thing don't change the great stock don't change the angle i think that's what's coming. >> thanks carter mike what is the trade on square in. >> the september 65, 5 a put spread spend $3.20 to boy the 65s and sell the 5 as for 807 net debit of $2.40 less than a quarter of the distance between the strikes in this case. this is a way to mitigate the fact that options are slightly elevated right now i think this is the way to play a short bet without taking any material risk to the upside. >> all right a quick break more options action right after this. (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?

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>> ronan farrow article. it's very long we are reading through but the headlines at the top of the article it reads like this quote six women who had professional dealings with him les moonves told me that between the 19 eights and late oos he forcibly touched owner kissed them in business meeting in what appeared to be a practiced routine. two told me that he threatened to did he raihle career. saul said he became cold or hostile after his advances were reject andrea their careers suffered facilitator the article goes on to say a current and former employees of cbs told me such behavior extended from moonves to important parts of the corporation including cbs news and 60 minutes one of the network's most esteemed programs. now the statement quoted in the article, les moonves says quote throughout my time at cbs we promoted a kurmt of respect and opportunity for all employees and consistently found success

elevating women to top executive positions cross our company. i recognize there were times decades aig when he may have some women kpuvl by making vanlss those were being mistakes and i regret them immensely but i always understood and abided by the i mean that no means no and never used my position to harm or hinder anyone's career. this is time when we all are appropriately focused on how to help improve society we at cbs are committed to part of the solution according to cbs there have been no misconduct claims and no settlements against moonves in his 24 years at the network. earlier today the board said it would investigate the allegations. cbs shares now trading flat after dipping 6% during the day today. melissa. >> julia skimming through the article as you ewell it is long the allegation here -- is theres there is a broad you are culture of sexual harassment and misconduct at controlled substances not only perpetratedly by les moonves but

permitted by les moonves to penetrate through the entire company. >> yeah, i mean, melissa i'm still reading through this here. what it lays out especially in the first couple pages i read is sort of a contrast between the recent actions he helped found the existing on eliminating sexual harassment and advancing equality in the workplace and with anita hill. ronan farrow resigning a culture of intimidation of women who spoke out or resisted advances so just going through it here obviously this is -- this is a time when there's been a lot on me too and times up. and it says here in the article that the women came forward before the lawsuit between cbs and national amusements their allegations are not politically motivated when it comes to the politics of that but certainly pretty powerful timing here. >> all right julia thank you. julia boorstin, the latest on cbs we saw there in the after

hour session just about 1% down. coming up, the tweets on the final call 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.

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? time now for the final call. last word from the options pits

mikes. >> cull spreads into tesla earnings >> carter. >> tesla and acquire caution ahead. >> dan. >> yeah i agree with that square and i think apple sets up good for a hedge. >> all right our time expired off r fotwoweeks have fun "mad money" starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there is 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 the make friends. i'm just trying to make 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. the stock market isn't always a friendly place kit be volatile, painful, and just downright difficult there are tons of bi