a big show for you on deck here's what's coming up. >> it's the final countdown to the busiest week for earnings season and it could be make or break season for wall street as some of the biggest tech companies report and if that es oonot enough for you -- >> i'm in glass case of emotion. >> investors are gauging a key fed meeting on wednesday and there is something that

could spell trouble for stocks he'll break it down. it's time to risk less and make more the action begins now. >> welcome, everybody. thanks for being with us we're going to begin with tech earnings because the me lineals get lit. they could see a 5% jolt in either drerks. facebook, 7% implied move so that represents a nearly $150 billion shift in mark cap next week. how should you nfinvest so much hinges for the mark it's

maybe not as good as consensus believes so there it is you can interpret it many mays let's try to interpret it together moving forward, one way to look at it, it's not really sberp retive, this security which has been in a an uptrend over and over and over, clearly broke trend and it dropped about 37% and it has ricochetted of course i want to talk about the ricochet it's essentially a 50% replacement. we talked about $745 per share we're up 372 and it's essentially right to the mid point. that is a level for those who care but what's important is, it's basically stuck. it's stalled at the retracement level and so if i take away those lines, what you can see very clearly is this tight

consolidation and that's typically happens before a big bet. one thing i would point out, that not only could you draw the lines as the break in trend, you can also perspectively draw the lines like that. now, obviously that's a interpretation my humpnch is this ricochet has come a long way. >> come on back to the set sout sfran out in san francisco. >> for one thing, when you buy options going into earnings. you obviously have to worry about decay going into events like earnings so we can find a

put spread in this case we're looking at one that's in money that has no decay. buying or selling the stock is extremely expensive. at the current price it's going to cost you $170,000 to trade but even few you bought one share you're looking at nearly 1,700 bucks so we're looking to put on a trade for less than that and the other thing is we're going into a specific cattist earnings and we're going to look at a win/lose proposition. when i was looking at the earlier today the stock was around the 75 level and this trade was costing about 4.80 disease. that was trading for 68.30 netanyahu you're going to spend about $4.80 for that considering each trade

represents $180. the likelihood the stock lands between these two is extremely low. you're going to lose the 4.8 # or it's going to be below and you'll make profit so this is what you can rhis -- risk little. >> especially if you agree with the fajt that amazon from the technical stand point is rolling over here. buying put spreads into erpvent you've got to break even here. but i like what he's targeting this stock sold off almost 8% the day of their reported their q 3 earnings they got it down about 6%.

if they come in below that, and they guide down for q 1, this stock going much lower you're going to see a period now where the company was, do know, they had everything going for them but when you see them die down 6 billion in a quarter. i don't think you want to be in that stock right now because that sales was powering all the other sales. >> 37% into the christmas low. this was such a bell weather and holding up what people believed to be the long-term course it just doesn't act well the market is heavy and i think it's acy metair-- ac

he tries to defend facebook saying once again they do not sell your data despite the recent rally, stocks down still so facebook, how are you trading this one. >> so this has been controversial for a year now it was just a few months ago, apple, the same sort of thing. what's going on with facebook is really different it's affecting billions of people around the world and really the fear is that there's going to a backlash from their users that will result in advertisers leaving that platform so the way i think and this is that here's a company that last year at this time earning and sales in 2019, growth for both

earnings estimates have come down so dramatically that maybe they've come down a little too much especially they're expecting he revenue growth this year i want to be cautiously optimistic but the setup is interesting. here's the chart you see that well defined down frie friend -- trend. it's now level so to me the options market is implying a $10 move in ooeither direction i think you take advantage of the near term elevated i plied volatility and you sell out the money calls and you finance the purchase at a later date so you're really playing for a specific trade in one second m you're playing for a

consolidation. it's not going to go up or down so the trade is trading at 1.49 today. you could buy the call calendar selling one of the 160 calls you have this room to the upside if you get to february expiration, those short 1.60 fed calls you end up owning the april longer dated for only $3 that's 2% of the stock price i'm playing for consolidation. i think there's a chance the company disappoints next week but maybe the stock is down enough year over year whether it's to try for higher highs >> i think it's kind of unlikely that they disappoint at least if you look at the bottom line because there is basically some hint that their ad pricing has

been able to hold up and all of the controversy aside, it looks pretty good. i like the way dan's trade is up here, because often times when people look at the calendar spread they look at the at the strikes. he's actually giving himself quite a buffer for this stock to do out of earnings and the february expiration are really quite expensive because of all of the urn certainty that trades over the top so i think this is really the best possible way that you could try to make a cautiously optimistic bet because i have a hard time believing that cloud gets lifted just because they report good numbers so i think this trade makes a lot of sense. >> we know there's been violent ricochets in so many areas of

the market if one is trying to find thing that has been a bit n nonparticipatory, facebook comes to mind, if indeed it's unhappy it wouldn't be a big selloff but maybe with a little luck it could be something special to the upside >> all right for everything options action, head to our website. meantime here's what's coming p up. >> investors are on edge ahead of the fed meeting next week and the master says there's something happening in the bond market that could send ripples across wall street we'll tell you how to trade it plus, reach into your pocket, and tweet us your question at options action if it's nice we'll answer it on air.

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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(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 the countdown is on to the big january fed meeting. carter says the rate route is just getting started he is back at the plaza to break it all down. >> you had short positioning at

exactly the wrong time rates went from 3:30 to 2.# 55 i think the porn thing is the following the that we have a well defined brachyin trend ever so slight and that now after breaking we've thrown back to the underbelly of the trend line which isoften at the point at which you then hit your head again. the downside means of course that one would want to buy something like a tlt one way to draw the lines, paying attention to this big spike is that we broke out, we probe that high and fell back. is that a failed breakout? in a way, yes, but what's key is if i remove that line is that when we dipped really we held trend here in fact, if we put in another line a lot of tension for

resolution and ultimately i think that after toying with these tops and ever so slightly breaking out and pivoting down that we are going to make our way higher i like tlt on the long side here i think this is a good bet i'm in the camp that yoelds are going as low as 2.1% on the 10 year >> all right thank you very much. mike, what do you think is the tlt? that is the most traded, most liquid >> so i think this is one of those cases, it's interesting as carter was pointing out a fairly sharp move in a fairly short time and the reason this is important is that over a period of a week, a month, this can move sharply

but day-to-day it doesn't move much and the prices are relatively low it means we don't need to complicate the trade very much i was looking specifically at the april 1.21 calls and think about that for a moment that's less than 2% of the current level of tlt which closed i think around 1.20 and a half so you don't need to see much of the upside to be profitable. for whatever reason it made it back to those november lows that's the downside risk here you're only risking 1.85. rates could go lower and the long bond could go higher. >> you can take a technical setup and you look at rates and you look at that ten-year yield.

it got rejected at the 2013/2014 highs and it broke at that uptend that had been placed in 2016 then you put that together with the fundamentals what the fed is telling us, what they plan on doing on rates, you put that for u.s. treasuries and i say to myself, mike is calling those calls at cheap as you can get. so to me, i like this trade. you're playing for a 2% move between here and april to the upside >> june of 2016. >> quite the incredible thing and look, other things are in play the u.s. dollar, consensus >> what is gold -- don't just throw it out >> it's not all is well as the

equities would imply but there's this people were punished and consensus remains, higher rates, done worry about what happened in with equities, we'll see. >> still ahead, starbucks brewing up big gains off its earnings this week what might be next for starbucks stop plus, do you have a burning question for the traders we're going to take your tweets later on in the show you might just get your answer as always, life at the nasdaq market sites more action right after this what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better,

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welcome back it is time to look back at some of our open trades shares of starbucks were about to heat up onearnings, they said >> we got a little bit higher again. we toyed with it again and a lot of tension here. the presumption is that on its next earnings it tops again and the stock clears all of these

hurdles. i'm a buyer. >> the 65 calls were trading at the money calls when i was long looking at that. >> the coffee giant up 4%. what do you do now with the trade? >> sure, so the shares were up 4% the calls we bought were up about oo% as of the close today. now we're in the money you know, one of the advantages that options gives you is you don't risk on the downside and you gain something on the upside once that call ends up in the money you have two things working for you. one is that it's starting to decay and other is that because it's in the money it's going to respond much more like the stock than leukoan option so my inclination is we take the gain week on week and use it to buy

another coffee >> so it's knowing who you are in the mark. >> you got paid and paid in spades because of optionalty, take the money and run does it mean starbucks is going high no, you stay long and you enjoy it but for this specific purpose, the trade that was put on, let's talk the money and celebrate with a starbucks >> there you go. we're not done calling out these prior trades you remember dan over here that intel was heading higher >> i'd trade to take a couple shots on intel and they've had a few very company specific issues, losing their ceo and so market share losses it sounds like we might get some resolution to oall thos things the call spread could be bought

for $2.40. selling one of the july 60 calls at 60 cents. >> so here's the deal. i said we might get some resolution, we didn't get resolution the stock was down 5.5% today. the this trade that could have been for 2.40 the first weak of january is now about 1.80. i chose july expiration and that 50 call strike is really an important level. it was almost there the other day. if the news flow was going to change this is the call you'd want to own into the next year >> you have things like big all-time highs and you have recovery moves, dozens of mchps

and samsungs coming off their lows to the intel is unhappy in the sense it's obviously specific to country. it's probably just a pair of twos here. up next, your tweets an the final call i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

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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 time now to take your tweets and our first fan and maybe our only asks what about the apple call that you guys discussed a while ago? should we hold or sell >> so going into earnings options, this thing has to run all way to 1.70. so i think you stick with the trade. >> ntlt. >> april 21 calls. >> take some money of the table

and put it in tlt. >> and facebook, lets's be cautiously optimistic. >> but sell amazon, buy -- okay. that does it for optionsa. catch us next and jim and mad money starts right now have a great weekend the following program is a paid commercial presentation for total gym fitness. [music] everybody work out. feel the energy. build a better body. the best you can be. another body easy as 123. oh. ahh. better body as easy as 123 with total gym. i feel fabulous anwh