we are live at the nasdaq in times square the guys behind me are getting ready. here is what is coming up. stocks are getting crushed and one name looks particularly bad heading into next week's earnings the set up plus. >> shop until you drop. >> that's what the consumer seems to be doing. a number of retail stocks high dan nathan has the trade ♪ >> call it the perfect match

mike has a way to make money on the online dating service if the stock goes up or down or nowhere at all it is time to risk less and make more the action begins right now. >> welcome, we start with retail catching fire, the xrt retail etf hitting fresh two-week high. earning season in full swing there they are for you home depot, macy's, wal-mart, jc penny. home depot and wal-mart can swing in 4% and jcp, 18% one of the names for an even higher >> wal-mart, the implied move is 4% in either direction, i think thursday, august 16th, on average the stock has moved about 6%

so that spread with what is implied and what is moving caught my eye. if you look at the one year chart for wal-mart, this was one of the early leaders in retail it had a drop into earlier this summer to up to about 10% and it looks like an interesting technical level here there's a couple of other things going on amazon is at an all-time high. costco trading near its all-time high target has a massive rally up 26% on the year near its all-time high wal-mart has a couple of fundamental issues, if it gets better on the groceries and in-store traffic and margin improvement. if they go to that, it is going above. a five-year chart and this got my eye informing the strikes on

the trade. you get through 90 and there's like open air to about $100. here is the trade, when the stock is trading, 90 or 25 today. giving the strategy time to play out here you are going to buy the october 91 spread. buying one of the october at the money, in the money a little bit calls for $3 and selling an october call and breaks even at 92.90. you can make up to $100. there's fundamental drivers here. >> i mean, i like -- obviously it is substantially higher a year okay and trading 18.5 earnings so they do seem to be doing a couple of things right i like the october 90 calls and

selling the october 1 hundreds at 50 cents is the only thing i'm concerned about because as a% passeng percentage of the current stock price -- a strong rally through 100 is unlikely. more than a 10% move from here and this is a fairly stable stock. >> the level you target, 100 that's the level which it gapped down so you will be looking for a gap fill if you look at the performance of macy's, or kroeger or costco. i think the stock belongs here if you look back, it typically doesn't move as much so it has more than normal. >> i want to make a couple of points about the trade i'm defining my risk

point about selg the call. i have a couple of months. i can cover that 100 call in october and look to sell the 95 and tighten it up and reduce the premium at risk. those are the things i'm considering. >> at the money and the real question that you are probably asking yourself and everybody out there is asking, is it possible that this stock can move 3% between now and october expiration it would be shocking that it didn't move. i think it makes sense you were talking on the earlier show about potential market risk if you believe in that -- >> from a winner to a loser, semiconductor stocks getting smacked around today falling nearly 3%.

intel, got a big downgrade seeing red the space can see sharper moves. nvidia can see 7% and applied materials. >> look at index and nvidia, most of the names had unhappy results in price actions following the earnings in the week what we know is the semiconductor index. before you can exceed a high, you likely contend with it so what we know is that this level is exactly the former high and if i were to draw lines, today the index closed at 13.54

versus the high of 13.62 years ago. and we are right there and struggling there moving forward n vir nvida. the semiconductor index and we have something known as a triple top on the relative performance of the s&p look where we are here we are above this level on the absolute but we are below this level here it is deterioration anyway you want to look at it finally, the sox index and trend line we bounced off of this line repeatedly the problem here is, after

bouncing off we didn't make the new high it is shallower and shallow we are. it is a star in my eyes. let's put the video up rather than looking like a bounce off of the line, a ricochet it is compressing and to my eye, that looks like the beginning of what should be something unhappy. so what i'm thinking is that this is really going to stall out and i want to nvidia is going to do what intel did and act poorly on earnings. >> what's your trade here, mike? >> i'm looking out at 70 days october. options premiums do get elevated into earnings but compared to how sharply the stock has moved on earnings, they are not grossly overpriced so the option tends to be more

expensive. specifically, looking at the october 250 and 220 spread you can sell the 220s and spending about $8 to make a bet. i would make this be point about nvidia they had a lot of tail wins coming in among which there might have been price support amongst crypto mining. one can argue that maybe that won't continue to be a tail win. they are facing some increasing competition from -- if you think that the business can be cyclical i certainly wouldn't short the stock. a trade like this makes sense. >> the strikes lineup on the downturn $8 for a $30 wide and you mentioned crypto, they report the that they guided crypto

sales down 50% from the first to second half. if you see that in a stock like nvidia, 30 times earnings and supposed to decelerate in 2019 the second half of year you rerate stocks. the i like this trade. >> you are risking about 4%, maybe less of the current stock price on a stock that moves 7.5% just on earnings why use options instead of trade sng that's a clear reason. why are we using a spread? they tend to be elevated such as earnings and we want to offset some of the deindicacay you're g to get this is a opportunity that we haven't gotten >> again, microchip today, down

11% and most semis have acted poorly. >> morgan stanley had a negative note on the semis. so i hear what you're talking about. we have more "options action" coming up. >> describe your perfect day. >> that's a tough one. i'd have to say, april 25th. because it is not too hot and not too cold >> or how about making money on the online dating site match if the stock goes up, down or nowhere at all mike will break it down. plus calling all "options action" parents. reach into your pocket, not your phone and tweet us your question at "options action." if it is nice, we'll answer it on air when "options action" returns.

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 tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪

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(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 action." web 2.0 stocks on the trade. hi seema. >> a whole host of online stocks were on fire this week match, yelp, etsy posting significant gains.

take a look at yelp. saw solid growth in paying advertising growths. up 30% for the week and investorings swiebing right on match and tinder delivered strong numbers and less concerned about facebook in an announcement that they made in may. iac after earnings pointed to continued strength jp morgan and capital raising the price targets on shares of iac. popping 25% after the cloud communications company boasted and growth and voice and messaging products there is etsy upped the full yore outlook and jumped 10% of the week the rally we have seen in online

consumer-oriented companies speaks to the firmness of the consumer economy scott, back to you. >> seema, thank you so much. mike >> we are going to look at selling a put. buying a stock here, the stock is light nowtrading at an all-time high and want to own it as a lower price we are looking to sell options, they are extremely expensive and finally, when we sell options we improve the probability of profit so we can take a quick look here and we'll notice that the stock traded about 51 and 15 is about where it closed and i'm taking a look at the 50 level this is a rather risky spot and this 45 level. specifically, the trade i'm

looking at is the december 50 puts this is how expensive the options are. we don't lock at selling options that far out you can collect 10% of the strike by selling the put. if it is put to you, you are going to buy it at 50. the level that was trading at earlier this year. and just taking a look now at the probability of profit here we can see that the chances that this thing expires worthless is 50/50 but a 61% chance that it is not going to violate the $45 level. right here -- i like this chart. so this is a trade where you are going to have a good chance of making money and collecting 10% in over four months. >> what do you think of this trade? >> i'm swiping right on this one. after such a massive gain here

to do an at the money put, few think how gappy it has been, it went down 20% and the real risk with 50% short interest is that you have competitive sorts of things that's why you have the move it seems tight to me. >> in terms of the price -- they had results. 155 and gapped up 8% to 168. you don't have prices after the first day. it is not 168 but now 193 and up 25 or 26%. now you have price discovery it's been rerated and backs and fills for quite some time. it. >> the other thing i point out, people own this stock so the question you need to ask yourself, do you want to continue to own the stock or be short this put and collect 10% over the next few months and own

it at a lower level and have an upside from here. >> i think that's a good point selling a at the money put is a way to have potential yield. if you were going to buy the stock, it makes sense to sell this. >> selling puts is not a strategy you engage in if you are going to be short. you are comfortable on owning it or collecting a premium. >> is it hit or square the stock rallied more than 3% more gains ahead got a question for a trader, send a tweet @optionsactions we are live at the nasdaq times square and more "options action" is right after this. >> "options action" sponsored by think or swim by td amerry

trade.d ameritrade. u 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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i retire as champion. game hog! champion. 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. welcome back to "options action" time for a look back at open trades. amd heading higher >> the second half of this year to crypto mining sales down 50%.

you have taken a lot of risk out of that being something that can drown the stock down and it can be a huge tail win if it were to go up. looking at october, you can sell the october 16 put at 55 cents and use the proceeds to by the call spread for 55 cents. >> the jacket looks familiar it is different. i promise. stocks now up more than 2% since the time of that trade. >> kind of grinding higher after what carter said to me one of the reasons i sold that downside and bought a call and sold another call is because i wanted it to grind higher. that is what's going on. at some point when we get further, above 21 call strike, you take in the short 14 put strike in october. >> you didn't feel like wearing a tie tonight

>> carter makes us look so -- >> two weeks ago, big guy, carter and mike said shares of square were heading into trouble. >> this is a well-defined trend line what i'm thinking at this point is that we know that up-trends will have check backs and we will often get back to trend and we are kind of due for that right around now. >> the september 65 put spread, spending $3.20 and sell. >> the stock fell and now up a percent since the trade, what are you going to do now? >> the draw down was nice. $10, and now it recovered. the recovery has not permitted the stock to make new highs. it will stick with the short bet. >> i'm going to guess that it is possible that they have taken some profits when we saw the

initial draw down. if you haven't yet, there is not a whole lot of premium yet. >> one thing about a stock like this, when you get a quick draw down and up there, it kind of speaks to strength the fact is a one day decline on the news and bring it back it is hard to put premium from here on out if my opinion. >> up next, your tweets and the final call >> "options action" is sponsored by think or swim by td ameritrade. 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. ♪

nguishable 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. we are back and it is time to take tweets thinking of selling the august 44 calls and buying the october 44 calls on cisco give me your thoughts. >> it does report next week. the stock rallied -- the stock rallied about 66% in the last week here going into the event that calls are elevated in premium turn

if you want to set it up, you are risking and i like the trade. >> a strong underlying stock is a good income source how do you find those stocks >> how do you find good stocks that is the trick. selling covered calls against most stocks even if you don't choose them well because you are collect ago prem yum over time it is easier to pick stocks to avoid. tesla is one that comes to mind. covered calls are strategies you can do in any portfolio. >> except with stocks because of the potential of outsize sort of returns. >> time for the final call carter first. >> earnings -- >> put spreads.

>> you know -- i like charting on the smh but i like defining the risk atwal mart. >> thank you for having me have a great weekend that does it for us. we'll be back next week. "mad money" starts 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]