hey, there we're live at the nasdaq the guys getting ready behind me, in the meantime, here's what's coming up on the show >> beyond meat has been sizzling and if you think the stock move is beyond belief, wait until you hear what the options mark has to say about beefless burgers. mike khouw will break it down. starbucks shares are on fire, hitting an all time high today but if you're thinking of getting in, watch out. >> ah, mother of pearl, that is hot! >> because the coffee giant

could burn investors and ♪ disco disco disco >> it is solid gold, bey, and the chart of the yellow metal is pointing to a sheeny breakout. it's time to risk less and make more the action begins now. >> and to kick it off with gold soaring along with stocks. touching its highest level since april 2018 as odds of a rate cut are on the rise. this solid gold rally will heat up carter >> it's the trade that never quite works but presumptively one day it will. gold has been toying with the prospects of a breakout repeatedly for the past fee ive years. but what increasingly is encouraging about it is the way

we've got p heten here is a higr low and all would suggest that the tension ultimately is to be resolved there's an expression. the more authority the level has the more thor tay testiauthorit level. here's a drawing of the lines. we're working into the apex of this formation here's the longer term chart, the all-time high at 1950 an ounce in 2011. this is the moment is the thinking and i think it's right to be long a couple long-term charts and then we'll go from there so this is also important. this is gold on top. and what we have here is relative performance to all other commodities. so not only crude oil but the copper and corn and cocoa and

wheat, milk, steel yes, we know gold peeked at 11 peaked at 11 we are making new relative highs right now. it has bounced perfectly off of this relative line over and over and over, and it did it again. and now let me put in the top line we are just now, you can see it here we just moved above that high. we made new relative, all-time highs this week. a very important very many i li very important development >> what's your trade in gold >> when we think about gold and the reasons that all these prior times we thought we might break out and see new highs and we didn't, one of the principle reasons we did not is we didn't see higher rates of inflation. when we talk a lot about gold, usually inflation is going to be

a part of that conversation. in april we did see slightly higher rates of inflation. what we're combining that with is conversations about rates remaining low or going lower in the short term because of broader economic concerns. that is a recipe that is not going to put a cap on inflation. therefore if you have a situation like that where you're starting to see levels of inflation rising but rates are not going to keep pace with that, that's a situation from a fundamental standpoint one could argue that gold could go higher. the other thing i would point out, we talk about implied volatility we don't talk about call spreads very often on the long side, and the rein we donason we don't do they trade with lower volatilities than the ones at the money. oftentimes you will look at a call spread and say i have to spend 40%. why would i do that? wouldn't i rather buy the call and usually the answer is yes. however, that is not often the case in commodities.

such is the case here, and that's why i'm looking at the august, the 127, 133 call spread, you could buy the 127 calls $2.67. so you're spending $1.65 against a $6 wide spread, less than 30% of the distance between the strikes. that's cheaper than they typically are to call for a breakout that helps mitigate some of the decay. this is not a situation where stocks you have an upcoming catalyst that could cause a breakout with a gap. i'm not expecting discontinuous. that's why it doesn't have as much decay you take advantage of fact that those out of the money options aren't as cheap. >> yeah, so throwing around that term implied volatility.

you think about the last times that we've had some kind of macro pressure that is put, downward pressure on risk assets but caused gold, safe haven to rise the price of options is really cheap. so i think if you're playing for the breakout from a technical standpoint that carter sees and then you see the potential for some stuff to go wrong this summer and stocks to go south, this call spread the way mike is doing it makes total sense it's probably some of the cheapest vol on the board if you want to play for macro volatility this summer >> the most impressive thing is the equities themselves are a beta trade you get more of a small cap. then of course you have the risk of picking the wrong stock so that is captured by doing the gdx, the gdxj or the small stocks >> we often hear some other people on the desk talk about playing the minors as a levered

way to play gold that is exactly the point. there are idiosyncratic risks there. it's a capital-intention self business there are a lot of things that play into it that could foul the trade if you're trying to make an explicit bet. we can basically take all of those other complications off the table if we do it this way >> along the terms of picking gold as a safe haven, how did carter do the charge as far as safe havens typically. >> people say it's not anything, a metal you pick up and put back in the ground. we know that classically defense ever things, the original was soap and cereal. we have biscuit companies that go back 200 and 300 years. from hershey chocolate

>> mcdonald's, starbucks and dunkin' hitting all time highs, chipotle in striking distance of its 52 week high there's one name in the group that could ruin the fast food fiesta >> let's look at star buck this is a stock that for years, from 2015 to really until like this point last year was range bound, trading queen 50 and 65 and we had this massive, massive break out. right now this stock is up 75% from its 52 week low it's up28% on the year, but what really caught my eye is that there. at some point this week the stock came alive, made four consecutive new all-time highs today, including today it rallied about 9% in a straight line over four trading days there was obviously less

pressure on some of the trade issues that was weighing on stocks over the last couple weeks, but you know to me this is a stock that trades 30 times. the sentiment is very positive for investor standpoint. i have a one-year chart. i want to show this a little bit. this is really showing that consolidation right up until april when the company reported their q 2 results that were fine comps were a little bit better they were a little bit better in china. china's this big growth area, about a fifth of their profit. we know that on the nasdaq last month, luck and coffee set on taking on starbucks in china went public, and they're going to open another 2,000 stores they're going to have more stores in china than starbucks has. it's a simple trade as you look out to the next identifiable catalyst, which is starbucks earning in late july, and i think there's not a resolution

to the china trade deal. i think you short this thing here with the fine risk. you go back to below 70s here, and when the stock was trading about 83 today you can look to auction expiration which will capture their earnings and buy the august 8250, 70 put spread buying one of the 82 half puts for three bucks. it breaks even at 80 you can make up to ten bucks between 80 and 70 with your max gain we low that what is interesting is obviously, below 82 half this thing is up on a massive, massive spike here, and i like the risk reward of this trade because i have earn ngs things think are going to have a negative report. >> the last five years there was really only one period of time where this thing was trading at a high multiple.

that was late 2015 and had you bought it in late 2015 what you would have got p in return for that was the 20% decline. that's really not that attacktive the other thing i would say is thinking about any situation where you're going to make it, that's a very dangerous exercise, an ill-advised exercise so i think this makes sense. you've identified a catalyst, a fundamental reason, and if the technicals happen to line up with it, i will defer to the smarter men than i on that topic. i absolutely like the trade. >> let's say this. it'ssteep. it's it's uncorrected if buying and selling is dependent on somebody else, is it the defensive security it is maybe believed to be think about what it did in the financial crisis not a bang but dropped, an 80% decline. if you were to get into a softer period, people just do cut back

on $8 cups of coffee and $4. they drink three instead of four or none. point of, it's not a god, and it's come a long way >> sign up for our super cool newsletter rumor has it this week's edition has the mega winning jackpot numbers. here's what's coming up next where's the beef where's the beef >> there isn't any and with beyond meet already up 450% from its ipo, you won't believe where options trade earns see it heading next plus, calling all "options action"s fans, tweet us your question if it's nice we'll answer it on air when "options action" returns. ♪

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we like drip coffee, layovers- -and waiting on hold. what we don't like is relying on fancy technology for help. snail mail! we were invited to a y2k party... uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not. 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." beyond meat wowing the stock is now at 450% of its may 2nd ipo price. and that's got options traders salivating, a whopping 350,000 contracts trading today, making it the fourth most traded stock behind apple and tesla

>> how much interest is there in beyond meat? it's beyond belief, really here we're comparing the amount of open interest that we saw in beyond meat coming into this morning and obviously, it's going to be a lot higher based on today's volume next week i would expect the number of contracts that are outstanding times the current share price. the idea being that an open contract in a high-dollar stock like beyond meat is more important than a low-dollar stock like ford for example. beyond meats that $3.5 billion worth of options and compare that to some very well-known names that is more than kraft heinz, more than pepsi and closing in on names like mcdonald's and starbucks. let's take a look at the chart since the ipo. obviously, it's had a huge move. you may wonder, why is there so

much open space in this chart out to november. the reason is because right now the options market is implying a huge potential move between now and then, about 60 bucks but here's the interesting thing. they're expecting that move basically to be lower. we've talked about this before in stocks right after ipos that have very short interest as beyond meat does the stock has become hard to borrow you could buy it closer to $100 to where it's trading right now if you used options to buy that is a warning sign if you don't own the stock i don't recommend going out and buying it now. another way to consider this is to take a look at this trade with the stock closing around $140 today, you could buy the 110/140 call spread for less than $15 when i was looking at that the reason for that was that these lower strike call options were essentially trading for the am that they were already in the money. that is pretty remarkable, meaning that you could buy those

110 calls rather than the stock and you wouldn't have any risk of it falling below that level or put differently, you could buy this $30 call spread for less than $15. if the stock simply stayed here you would make the difference. and obviously, if it rose you would make the ditch you wouldn't start losing money until this fell. it is in this case they think it's going to be lower by the end of the year than it is now >> let's trade it. >> you know,q we tried them on fast money >> you did not like it >> no. the way mike is laying it out, that is one way to kind of capture a 6%, 7%,8% move who knows. this stock was up almost $40 tomorrow what would it be on some

competitive announcement this is kind of like the wild, wild west. >> on wednesday we highlighted some unusual activity in this thing going into earnings. swee we spoke about the spread that expires a week from today somebody bought 2600 of those. and that seemed absurd at the time here we are, it's 140. that trade is already a winner based on the move we've already seen what we're seeing here is when there's no stock available to short, everybody who's shorted can be already, then it's very hard for, you know, folks who are going to try to make those bets that's within of the things feeding into this. >> let's take you into having had one day of trading here was the low, here was the high, here was the close the point is right if pattern interpretation is trying to figure out where are you in relation to where you've been to determine whether you're

going going break out new highs. none of that exists in a pattern that's only days old what we do know is it's speculative, and there are a lot of bets being made on both sides. this one-day gap, i would say accomplishes a lot for those who might be bullish, and i'd rather fade it here >> we've seep othn other ipos w this speculative frenzy and the answer is you have to be careful. >> great news for one of our traders, plus it's friday. so you know what that means. we are taking your options questions live on the show you might just get your answer on air we're live in times square, 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? 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.

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. ♪ welcome back to "options action." last week dan laid out a plan to play apple after its recent turmoil. >> i see technical resistance up at that 200-220 level and i see some pretty good support at 160-140. so i say to myself, the next two events, one we cannot model. we don't know when it's going to

happen, if there's going to be a resolution to the trade situation. and the next one will be earnings you can sell the august 150 put, about $2.75, use the proceeds of that and buy one of the august 195 calls for $2.75. >> well, apple soaring nearly 9% just this week so dan, how are you managing the trade? >> you sold the put to buy a call out in august we still have the same catalyst, this thing called a bid with the market the most important thing is to cover that down side put that's offered at less than a dollar. i think about 88 cents now the 195 call $195 call is t about $7 if you think there are higher highs, which i suspect there are, or you can sell the august,

then you have the august, and you have it for a credit that's a good setup if you think there will be a resolution to the china trade situation. >> up next we have your tweets ands fin and the final call ed at chart p. 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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♪♪ final call time. carter >> well, gold and all themes li things like it, i like gold long >> what about my starbucks i'm already getting push back from the farley girls on my starbucks trade. >> i didn't know they were "options action" fans. th >> they are. >> see you next friday mad money with jim cramer starts right now. - [announcer] the following is a paid program

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