we are live at the nasdaq. getting ready for the big show here while the guys are doing that, here is what's coming up >> i am so excited, i am so excited. i am so -- scared. >> big banks kickoff earnings season next week after you hear what dan has to say with one name, you may want to curve your enthusiasm he'll break down the trade lyft options just started trading. >> that's cool and all -- where

is the car after a wild week of investors, mike go has a way to buy stocks for less he'll show you how to do it. the markets rip its high it is time to risk less and make more the action begins now. ♪ we start off with the market, s&p 500 posting at seventh straight days of gains the dow at 2% from their high. check out the russell, still down 9% from its record. the small caps are about to break out in a big way he's over at the plasma, hey carter >> it is more of a catch-up trade more than anything else. large caps are stalling at the former high. this year the market still has

potential to make it back to the high two lines you can see the difference, of course, performance over the past year, blue is spy, orange being iwm. different time frame here we the past two years what we are seeing ace doubis a, right? is small cap a better trader finally going back as far as five years, again it is abou the spread s&p has this circumstance at risk the russell does not have that, the catch up trade is the important one here look how bad the relative performance have been, another way to show the picture. here ises t the russell it has gone straight up with general equities off the december lows. it made no progress relative what i am thinking is you got

something of abbothe bottom on relative the best is we break out the relative and absolute set-up let's look at the iwm itself you can draw the w line anyway you want one way the implication would be you have to get here and then of course do something like that. let's draw the lines another way. this is key. if i were to zoom in here, we just today, just fractionally moving above that thinking line. we are nowhere near the highs. the s&p stall as and turns at is highs. >> mike, what's your trade

>> an indication options on indices are expensive here we have an opportunity here to make a bet to keep it simple i was looking at the june 157 calls today. it is the essentially at the money call represents about 3% of the cost of the under line to make a bullish bet it does not take much for these things to be profitable. that other kind of convergence may be if we are -- if the market rolls over, this will fall so mitigating your risk >> that was the question before we got to dan carter do you believe the s&p 500 hold at current levels? >> when anything has a sharp rally back to a former high. more of that you can tend with

the high before you exceed with the high you will see in a chart, well defining tops and you will see the break out. rarely you will streak right through. we have the semiconductor and s&p. more often or not, you don't see the high you turn your back and fill it back away. >> dan >> i hate disagreements with these guys i look at this thing and i say to myself, i don't like it because i don't like the poor relative performance of the s&p. the s&p is levitating. it feels that we are david weeso get back to the highs. i see what you see this thing is going back to 170 between now and the end of the spring or june or something like

that i think the chart looks great. you trade is the way to play it. i don't agree with it. >> probably a portion of your concern comes from the constituents of the russell euless, texas whi itself which are not bullish that gets to the crux of the matter in general most of us have effectively long positions and equities equities will overtime rise and the economy grows overtime the real question, are we sitting on a cusp of continuing to go higher or in a long bold market >> if you have that situation then you have to also agree that the options are inexpensive. >> complacency since august or september. listen i like the idea for

playing cpla playing catch-up, i don't see the s&p getting a meaningful take out here. >> the s&p is being where all the crowding is. we know in software and other super cap tech names which this does not have that circumstance. >> from small caps to big banks they kickoff next week to jp morgan tchlt market is implying interesting move is this a make or break moment for the banks, dan >> we know the banks really get earnings season kicked off next week is really leading until we get to friday the biggest focus is jp morgan wells fargo sticks out to me a little bit because it has been in the news of late. we know their ceo is forced to resign last week and the stock bounced a few cents and people

taking it positively but then it gave back of those early gains the general counsel is the acting ceo, the board is going to have to go outside of this company to find a new ceo. i think that creates some interesting near term challenges for the company. i don't think you will get the sort of person coming in and take that job unless they see some light at the end of the tunnel that the government is putting on this bank and this stock trades very expensive to a couple of its peers and city group, i just don't get it i think the report next friday, there would be a disappointing results. i think this new management asseas inve inve inve inventiv inventives look at the four-year chart.

50 looks like to be it is the old neckline and now it is a little bit of a resistance >> those ais is the one. this is the one. look at the 10-year chart. it broke last year of the up trend here it is a broken stock to me i think you want to look at, i think it will be earnings next week i want to look at may when wells fargo is trading at 480. you can buy the may 47 and 60 cents for that and buying one of the may 47.5 you can make a buck 90 between 49.90. that's your max gain you have this on for a month and

a half or so i am not bullish of what any of the banks going to say i like the set up here >> i like that you said this is relatively over valued >> yes, considering the problems these banks still faces. >> that's one of the real dilemmas that we see at wells fargo. you would expect all the clouds they have been under they have gotten cheaper overtime. they really have not this is a name where we see revenue declined steadily. financials are facing these two barbell of head winds of sorts as interest rates fall, that's not necessarily good what did we see when we see rising rates we saw a deep decline in financing rates. if you are not originating loans and you are not making money when it falls, the valuation is comparable to much better banks than they are. it is hard to see why you want

to be long for this one. >> you do the kre or do you do the bkx which is the more interesting thing. the small regional banks is where the trouble is they don't have the capital market risk. in terms of the big one, this is by far the worst you could pick jp morgan or city, this is something wrong. it trades very poorly. i think to your point speaking of regional of the big banks, it is the most regional unlike jp morgan which has a lot of businesses this one has less of that. less of some of the investment type business. it is like a super regional of sorts. >> would you manage the trade in that right after earnings? >> listen, we do this all the time the way we do earnings and long premiums, it is a hard way to

make the money if you got that move, friday you may consider taking some of that off right away the other reasons why i chose may is that i also want to give myself some time maybe the stocks open up a couple percent but then it fail. you don't want to do weekly into events because it turns into a binary situation >> for everything "options action," check out our website you can sign for our newsletters. it is like you die in winter options. what more can you want here is what's coming up next. >> the cabs are here because lyft options just started trading. after an under welli-whelming wr investors, we have a way for you

to get long for less reach into your pocket and have your phone and tweet us your questions see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? is nice, we'll answer them on air. air. "options action" returns 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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action." if you want to buy this, mike ko has the way to do it for next to nothing. >> mike. the first thing i would point out. if you are thinking of buying the stock, right now the options market are saying you may want to be careful about that we are seeing some warning signs in in the wamarkets for lyft one thing you want to try to do if you can is buy it for less prevailing stock price one of the reasons we see this unusual activity for the options market is the lock-up that we have coming in september 25th right now the options market implies the forward price for lyft which was about $75 when i was looking at it today.

it is close to 68.5 down in october. if you sort of say all right, we are going to draw some reasonable bands of expectations around that. we are looking at a range in here if you look at this range, that's a little bit of upside. it is kind of a a lot of downside but because the options market is making this kind of signals for us, it gives us the opportunity to take advantage of that when i was looking at it earlier today. october 77.5 call were trading for 7 bucks. the 60 put were also trading fo 7 bucks. the stock was trading at $75, that means you are getting exposure if the stock rises for 3% if the stock should fall which is what the options market is currently implying will do you are not going to put the stocks until it gets down to 60

bucks. that's about a 20% decrease from where the stock is currently trading. be ware if you think of buying lyft if you are going to, take advantage of what the option market is offering you here and have this opportunity where you are not going to take the near term downsize risk but you will get the upside exposure. >> one week is not a long trading history, carter. what do you make of it >> no, it is not if you look at the history of ipos, it is considered the most important thing to not break price and the under writers do everything in their power to not let it happen. on monday of this week it comes in with a gap. while we climb back, i would go so far to say the highs at the opening print will stand for weeks and months and the stock is basically will be traded in

the range from that opening of 88.60 and you won't see those highs any time >> we have seen circumstances in the past with ipos where the option market imply with the price and drift slower the reason is more demands to short stock than there is stock available to short it becomes hard to borrow. you have to pay to borrow the shares if you want to short it we have coverage on the network already because of some of the products may have been offered when stocks become hard to borrow, the price of call comes down and the price of input goes up >> it is a unique set up like mike said he's selling the 60 put and buying the 77.5 call the stock is much closer to the call price this is a much better way to get that kmek exposure than buying

the stock right here i will say that over the course of this week, the volume decreased dramatically the stock did find a level when this company going around talking to investors, the initial range was 62 to 68 and it found some support. the main event for this name, going forward, it will earn interests and uber and all these other names are coming earnings event are important, we talked about it in "fast money," they'll have their first earnings report midday, if those two things go well, i expect the stock will find it >> coming up, snap is up more than 100% this year. that's for millenial

and dan. >> we are live at the markette more "options action" after this "options action" is sponsored by think or swim by td ameritrade ♪♪

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action." dan says snap was about to fly last month >> it is trading now at 9.5 bucks, i think you want to play call calendar. with the stock around 9.50 you are looking at april expiration and you can sell it at 15 cents at april call. you look at one of the july 11th call paying 69 cents, that costs you 54 cents that's your maximum risk >> what a trade, snap is up 20% at the time of the call. a dan, what do you do? >> it was a good idea and bad trade hindsight. i was giving myself enough time with enough room the stock went right there it is above that strike. i think there is more upside now, out to july, that's the call that this trade has launched what i would do is roll that short april 11th call and maybe

turn the july long 11 call into a vertical or sell a 14 strike >> two weeks ago, mike said home builders were a home run for investors. >> if you take a look at all the stocks that's comprised in xnp, what you see it is trading at 12 times earnings the home builders themselves is a subset are much cheaper. you can look at the june 38 call those are about a buck and a half and this is a trade where you can try to be nimble >> the calls are double at this point. i tweeted out earlier today. follow us on twitter if you are not. sell ta call and roll up to 41 you take some profits off the

table and maintain long exposure >> you have a bit of offense and defense of trade here. rates go lower, i think it works with it. >> all right, "final call" is up next "options action" is sponsored by td ameritrade. ♪♪ ♪♪

i'm not really a, i thought wall street guy.ns. 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 are you sticking with your retail trade >> hey vince, the s&p was up 2% this week. that's still under perform you still stick with it. i think you use 50 cents premium stock for that >> time for the final call carter >> i need a better listening iwum >> mike ko >> i really like what he did with that. he got the short spies i like that trade, i like wells fargo. >> that does it for us here on

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