hello and happy expiration friday the guys are all getting set behind us on the nasdaq and as they get ready, here's what's coming up on the big show. >> well, um, actually, a pretty nice little saturday we're going go to home depot. >> carter says home dee poe's earnings are anything but nice and when you see the pressing sell, you might just, too. plus -- uber is racing back to its ipo price and options are officially trading on the stock. mike ko will explain how to get in on the ride without the risk.

and -- wall street is waiting for a trade deal >> so you're telling me there's a chance >> yeah! >> maybe, but there is one stock that's just been spared from the turmoil and dan nathan says this would be a best chance to buy. it's time to risk less and make more the action begins right now. and happy friday it's 5:31 eastern time good to see you. let's get right to it. we have a number of big box retailers that are next week home depot, lowe's, target and options on all these stocks indicating moves between 3% and 5% after the earnings report, but that's not all the chart master says that one of these names is at risk of breaking down big time carter worth back at the plasma with the details and the name. hi, carter >> home depot, you know, it just doesn't act well as a technical

expression goes and heavy, and it's us going into earnings. here is its chart. home depot relative to the itb of course, that's the homebuilders etf and a lot of correlation and the breaking down and that's the risk here that there's a message and there's wisdom in price and the market is seeing something let's look at a few more charts and we have the circumstance as is the case with so many stocks of a head and shoulders bottom, but the faltering here one are one could look at it, well, it's just back to support. my hunch is something else, that it's too much weakness and i would show you it this way and the weakness has constituted a break in trend and that bothers me on a longer term basis, there is the following issue. there's a slight break in trend, but most important, when the stock made a new high -- this is

actually a slight new high, it couldn't make a relative high and it made a lower high and on this rally yet another lower high and a relative performance to the market has been tepid, at best and that's another warning sign and so my thought is here that one should be cautious if been's long going into earnings of home depot and/or be short. >> all right, carter, thank you very much. we'll see you back at the desk so, mike, what's the trade here? >> i think this is an interesting situation. in the space with the home improvement retailers i definitely prefer home depot over lowe's and they've always done bet or a per square foot sales basis and they have a much higher concentration for professionals about 40% of revenues and that's a big benefit and the thing is that i'm not really expecting stellar retail sales out of anybody coming out of this spring. we've had very poor weather in some very hot real estate markets and we've seen some evidence on the coast at least of some softening, and i think that there is a possibility that they may actually disappoint

here although i like the stockpot earnly i do see risk to the downside and you mentioned what the applied move is 3% to 5% and 3% in home depot. >> and 5% in lowe's. >> if you take a look at the two and this is an interesting situation because lowe's would report after home depot and you would expect it to get a read and this is a situation where the home depot options are not that expensive i was just looking out to june and the 190 and the 180 put spread was $2.50 and it was $3.90 since the lower strike for about $1.40 and $2.50 net-net. if the stock lingers here you will not see all of that premium get eviscerated right away and you're not risking the 250 this is a situation where things are looking precarious and i think it's true for the market

and true for home depot. >> obviously the market's come back a little bit. this friday was not a great close and last friday things were getting a little nasty and we know that mid-week we caught it and it is interesting that home depot is lower than it was last friday and carter's charts are telling the fact that it's below the up trend from the december lows. your guess is as good as mine as to what they'll report and what are the expectations now that the stock is down now 15 bucks or something like that in the last few week, but this put spread, what mike is talking about is paying 2.50, very low on the money with low, implied volatility and that's why you want to press the short in my opinion and i like the setup and i really hate the relative, poor performance. >> they are so correlated and home depot's always been the king, the winner and lowe's the afterthought last quarter, home depot gapped down on its results and lowe's gapped up and i think that's part of the decision process

here gaps typically come in twos or threes and that's the risk going into earnings. >> if we head something through, mike, to your point, the fact that lowe's reports after and has a higher move, i wonder if the market is telling us something and they're putting a bet on -- because to your point, we're not the weather show, but it's rained every day this year on the east coast. it feels like. >> which is not typically good for these guys generally speaking, you will see a lot of sales going into the spring season. not when it's raining all of the time and that hasn't just been true on the east coast, but the west coast, too. if have a position in lowe's and you are, pressing some consideration that that might not be that great, that would be one of the situations where you're looking to sell upside rather than buy downside >> okay. certainly, listen, obviously, that's one story and trade has

been the macro story and the trade turmoil has sent stocks on a wild ride this week and the s&p 500 finishing down for the second week in a row and the dow, by the way, posting the first four-week losing streak in three years, ouch, but there is one name that could be escaping the trade war. you're looking at four >> let's go back a whole year ago when we started talking abouttariffs and with our adversaries like china and they were with some of our allies and it was obviously, you know, mexico and canada and obviously the eu and japan and that was a big issue for these automakers here in the u.s. and this, today, we just got news and this week it started to leak out a little bit that the trump administration would delay the eu and the japan component on autos and those tariffs and then we got the announcement today that mexico and canada, the steel and aluminum tariffs to also come off here and that's something that i think has been

weighing on the auto names and obviously the stuff that we're talking about as far as u.s. retail spending has also been something that's been affecting these guys and i think with ford you want to go back to late april when they reported the q1 results and the stock gapped up 11% and on the heels of basically strong suv and truck sales here in the u.s. and here's the thing look at that one-year chart. i'll let carter speak to it because they're the sloppy lines and they gapped up on the $10 level on big volume and showed relative strength over the last couple of weaks where they've had volatility and i'll go to the six-year chart where they topped and carter's taught me one thing. when i look at charts i've got to connect a lot of dots, right, buddy? >> the most important thing, connect as many dots as you want and in this scenario it's gapped up along the well-defined

six-year downtrend trump has told us he'll meet with president xi at the g20 in japan, and i think if we start getting some building sentiment that we have a trade deal, a stock like ford could really benefit and keep that momentum so to me this is an easy trade we have the one-year chart of am plied volatility and the price of options in ford is pretty low. here's the other thing, with the $10 stock it is cheap and i'm looking at june 28th expiration when the stock of trading at 10.40 today and this stock will break out again into late quarter of june. you could buy the june 28th 10.50 calls paying 30 cents for those break even at 1080 and you match the 3% of the stock price and 3.4% and you can lose up to 30 cents, but you have unlimited gains above 10.80 and this is a cheap way to play for a continued momentum to the

downside >> the irony is ford was knocked for not being -- now the domestic focus will benefit the name. >> they're 3% of the stock price slightly under, actually this is for a stock down 30% so far year to date the other thing that's cheap is the stock itself is trading seven times full-year earnings estimates and they're cheap for a reason that's totally fair and oftentimes when stocks are continuing to be cheaper the stock is not true and that stock has traded pretty wool and the old autos would be left for dead >> ford acts very, very well, but if one were to look at structurally autos and it's a great symbol, cars, and it picks up the german manufacturers, daimler, bmw, porsche and they

pick up toyota, nissan and many more, tesla. cars has underperformed the s&p five over the past six years it's down 9% and the s&p is up seven. structurally, global capacity is too high and autos are a bad place to be and you summoned up one of the best patterns among the best group. >> i think i stole this chart from fast money and the relative strength and the cheap options really make it a pretty good way to play a contrarian move on something that we don't really know what's going to happen, but we do have a catalyst in a little more than a month, and i like making good risk/reward bets like this and this looks decent. >> guys, thank you for everything options action check out optionsaction.cnbc.com before you do that because you might be driving, don't do that. here's what's coming up next. >> an ipo is an initial public offering it's the first time the stock is

offered for sale to the general population. >> okay. got it, and if you've been waiting to get in on uber's ipo, mike ko will tell you how to cash in on the trade plus, calling all options actio fans, go into your pocket, tweet usptns aio oioctn and if it's nice we'll answer it on air when options action returns ♪♪ ♪♪ ♪♪

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 welcome back to options action happy friday it wasn't exactly an ipo, but uber options did debut yesterday. the stock recovering some of its early losses actually finishing this week slightly higher, but

uber is still down 7% since the high when it went public, but it's a hot day if you want to get in on the ride mike has a way for you to do it and maybe make extra cash on the side and he's at the plasma with his call to action. >> making a little extra cash on the side and that's the idea for people participating with uber as drivers there might be a way for you to do that, as well we're taking a look at the share price since the ipo and not a lot of history here, but it also doesn't look particularly compelling and actually, if we take a look at the other ride-sharing company that ipoed a little bit earlier we could see potentially some weakness. it does seem right now like some of these unicorn ipos don't have a lot of gas coming out of it and the question we might ask yourselves is what is the market providing for us we can take a look and right now uber options are exceptionally

expensive. when i was looking at them today going july, it was implying a range up 20% and generally speaking when options are expensive, we want to look for ways to potentially sell them. the other thing is that i have a hard time believing the way the stock's behaving right now and maybe carter can speak to it based on some other prior ipo history that it's really going to exceed the highs that we saw right after the ipo. so what can you do if you happen to have bought the stock since then and you're trying to make a little extra cash? one of the things you can look to do is sell a covered call i was looking at the june 23 calls and the stock was trading at 42.5 at the time and the idea is that you're going to get to collect that premium between now and expiration the other nice thing that a trade like this will do is you still get to keep that premium

and actually, rid now you will see any losses if the stock declines at all, this gives you a little bit of insulation, about 8% versus the current stock price if the stock does drop and of course, you can continue to do the strategy after the ones that you sell right now happen to expire we actually talked about a strategy very much like this one in lyft right before they reported their earnings and the first earnings were reported after their ipo and that obviously helped out a lot because the stock was trading at 60 bucks and we sold the call for $5 and now you would own it at 56 which is where the stock is trading and it helps to alleviate some of the downside punishment. >> all right, mike thank you very much. stay over there, if you would. what do you think of that trade? >> mike's telling us that the applied move over the next month or so is 20% and in the options market that's extraordinary for a stock that has actually been moving around a lot since the ipo. the idea of selling premium makes a lot of sense and another

trade that you can think about was the call spread and you can maybe do that with the july 45 and 50 for no cost and that's a way to sell some premium against your long and again, really interesting. the option has been trading this for two days and both days the most active strike has been the january 21, 2021, 25-strike put yesterday, 7700 traded and today about 5,000 traded and they look like they're bought so that's maybe some holder who has been in the name as a private investor for a long time that's locked up. >> so don't read too much into the day, is that's probably an investor looking to protect himself or herself over here. >> you wouldn't have to look to protect yourself if you weren't worried. >> dan is saying it's not a singular position. >> we talk about this unusual activity all of the time and we have no idea what that means and it is interesting that in two days the most active strike was

that long dated and way out of the money put. >> like some financial adviser said hey, you've got all of this equity and the stock isn't doing well. >> they only say that if they're concerned. why would you hedge the great thing that's about to take off beyond meat? >> meat that's not meat. hey, the reality is the dole price, that's never group. they're struggling and it gapped open to the downside and 36 low and it recovered to 44 the burden of proof is on the bulls. the two stocks just don't act well mike, final comment. >> i would agree with cart or those long dated put buys that we saw you don't put those on unless you have some measure of concern and there's reason to be concerned and we're not seeing the stocks behave all that well and that expires a long way out and this is someone who could be holding the stock for an extended period of time and if

you're inclined to do that, this is another thing you can do is every expiration, it did give you yield in the meantime and especially if it will yield and i don't think it will. >> good discussion there is no cisco skid that stock soaring on earnings this week and unfortunately, that's bad news for one of our traders. we are live at the nasdaq eranetsite in times square, d the's much more "options action" right after this break (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? 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.

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what do you look for 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, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪ >> all right we like to hold traders accountable on this fine show. so it's time to take a look at a couple of our open trades. last week dan said the trade war could cause panic at the cisco >> in the last ten years this p-e is getting back up to the ten-year highs at 17 1/2 times and that's really rich for a

company that's growing like this and it's kind of priced for perfection here and the slightest bit of murky guidance, i think the stock will outperform that 5% implied move to the downside and the stock was trading at 53 1/4, you can buy the put fred and paying $1 for the that buy-in and one of the 49 puts at 20 cents. >> cisco's earnings we know, no surprise to the upside so dan, what do you do now >> it was a bad call this expired worthless and you cannot have much time to get out after the results on wednesday night and here's the thing, i was focused on the guidance. the guidance was really good and this company is executing very well they told you they're not feeling adverse effects from the trade war. >> to me, i was kind of surprised by that, but again, you know, the stock is still not cheap. it is getting back to the prior highs and i would aren't be chasing it here and just a bad call and risking 2% of the stock

price and to find a moment in time when you're going to get paid or perhaps lose, but it did inflect. it just happened to inflect the wrong way and the objective of finding an opportunity check correction >> good call we're not just picking on dan. mike predicted electronic arts could level up heading into earnings >> if we take a look at the last three earnings there has been an unmitigated disaster i'm inclined to make a contrarian threat and not make a great deal of money and this thing is implying an 8.5% move on earnings and what that tells us is that the short-dated options are quite expensive and i want to take advantage of that i'm looking here to sell the may 100 calls for 1.90 and buy the junes for 3.50 so ea moving in the right direction as the first leg of this call expires. what do we do now?

>> we wanted the stock to end up at hundred the mays rolled off and the junes were worth $2.70 and it's a near double, i guess, and it was up more earlier this week and if you hold the position my inclination is to be at this point take your profits. come monday, because the idea was to try to collect the premium and not necessarily spend it if you think this is spreading out to a call spread and there are a lot of things that they can do with it and mike's trading idea gave it optionality. >> nice. up next,ou yr tweets, and that's what i like to see, dan, and 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. ♪

♪♪ ♪♪ ♪♪ time for the final cart. carter worth >> home depot, i'm a seller.

>> home depot and the 180 put spread. >> dan >> june 28, 10 1/2 calls. >> good stuff there. thanks for taking it easy on me as well. that does it for "options action," "fast my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it "mad money" starts now >> hey, i'm cramer welcome in to "mad money." welcome to cramerica, and of course, welcome to san francisco. the people want to make friends. i'm just trying to make money. my job is not just