hey there, we're live at the nasdaq after a big week for the markets. the guys getting ready behind me here's what's coming up on the show >> beyond meat has been sizzling ♪ feeling hot hot hot >> if you think the stock move is beyond belief, wait until you hear what the options market has to say about the meatless burgers. mike khouw will break it down. speaking of hot. starbucks shares are on absolute fire hitting another all-time high today. but if you're thinking of getting in, watch out. >> mother pearl, that is hot >> dan says that coffee giant

could burn investors ♪ it's gold it's gold it's gold it's solid gold baby ♪ and it is solid gold, and carter says the chart of the yellow medal is pointing to a big, shiny breakout. it's time to risk less and make more the action begins now. we kick off with gold soaring with stocks, the yellow metal touching its highest level since 2018 the chart master says this solid gold rally will continue to heat up carter >> so it's the trade that never quite works, but presumptively one day it will. let's talk about it. gold has been toying with the prospects of a breakout repeatedly for the past five years. it keeps approaching this $13.50 plus/minus level and back away what's encouraging is the way we've gotten here, a higher low,

a higher low, a higher, although i, which would suggest the tension ultimately is to be resolved there's an expression, the more authority dative a level, the more authority dative the resolution another way to draw the lines to show you we're working into the apex of this formation here's the longer-term chart that puts this in context, $19.50 an ounce in 2011. so the thinking here is this is the moment and i think it's right for long. gold, gold mining stocks, through gdx. however you want to do it. 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 now this is the interesting

thing. yes, we know that gold peaked at 11 yes, we know after selling off it's trying to recover and it looks good day to day, week to week what's important is 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 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. i think it's a very important development. i like gold, i like gold miners, i think you've got to have some of it in some fashion in your portfolio. >> so this is an interesting case because when we think about gold and one of the reasons maybe that all of these prior times we thought we might break out and see new highs and we didn't, one of the reasons is because we didn't see higher rates of inflation. we talked a lot about gold, usuallyinflation is part of that conversation. in april we did see slightly higher rates of inflation.

what we're combining that with right now, though, is conversations about rates remaining low or even 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, then that's a situation where i think from a fundamental standpoint, one could argue that gold could go higher the other thing i would point out this is being an options show, we talk about implied volatility we don't talk about call spreads very often on the long side. the reason we don't do that is because out on the money call options typically trade with lower implied vol volatilities than ones at the money oftentimes you say, i have to spend 40% of the distance between the strikes on the long side why would i do that, wouldn't i rather buy the call usually the answer is yes. however, that is not often the case in commodities.

such is the case here. that's why i'm looking to august the 127-133 call spread. buy the 127 at the money when i was looking at this earlier today, $2.65 sell the 133 call for $1 against it spending $1.65 against a $6 widespread, less than 30% of the distance between the strikes that's cheaper than call spreads typically to play for a breakout one of the things i would point out is that helps mitigate some of the decay this is not a situation where, like stocks, you have an upcoming catalyst that could cause a breakout with a gap. i'm not expecting discontinuous pricing where you suddenly have earnings in the stock. that's one of the reasons why a trade like this doesn't have as much decay you're taking advantage of the fact that those out of the money options aren't as cheap as the out of the money things are which you often see in things like index and single stock. >> applied volatility, it's the price of options gld options the last five years, think about the last times we've

had really some kind of macro pressure that has put downward pressure on risk assets, called safe haven assets to rise. gld's impride volatilities is really cheap i think if you're playing for the breakout from a technical standpoint, you see the potential for some stuff to go wrong this summer and stocks could 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. >> there is the most aggressive thing, the equities themselves, right? the beta trade you get more move minor than you will out of bouillon itself. you have the risk of picking the wrong stock, so that is captured by either doing the gdx, small stocks, or gld. >> i hear that we often hear other people talk about playing the minors as a

levered way to play gold that's the point, there are levered ways, idiosyncratic risk often they have operational challenges it's a capital-intensive business there's things that play into it that could foul the trade if you're really trying to make an explicit bet on the direction of the commodity. gld is a clean way to make that bet. we can take other complications off the table if we do it this way. >> picking gold as a safe haven, how do the charts look at some of the other stereotypical safe havens >> again, some people say gold isn't anything there's people that make fun of it and say it's not anything, it's a metal that you dig and up put back in the ground, so forth. but we know that classically defensive things, is original was soap and cereal. biscuit companies go back 200, 300 years. there were no pharmaceuticals. hershey's chocolate, so forth. health care less so. the defensive areas of the market, utilities reads,

treasuries, they all are sending a certain message. fast food stocks having a big week mcdonald's, starbucks and dunking hitting new highs. weapon did y you get the picture. dan here says there's one name in the group that could ruin the fiesta. >> starbucks this is a stock that for years from 2015 to really until some point this time last year was really range-bound, trading between $50 and $65. this massive breakout a at one point in 2018. right now this stock is up 75% from its 52-week lows made last june it's up 28% on the year. but what really caught my eye is that right there this week at some point the stock just literally came alive. made four consecutive new all-time highs in a row including today. it rallied about 9% in a straight line over four trading days obviously the market caught a big year there was obviously less

pressure on some of the trade issues weighing on stocks over the last couple of weeks but you know, to me this is a stock that trades 30 times the stock is obviously -- the sentiment is very positive from an investor standpoint i have a one-year chart here this is really kind of showing that consolidation right up until april where the company reported their fiscal q2 results that were fine comps were a little better a little bit better in china you know, here's the other thing. china's this big growth area, about one-fifth of their poft. we know that on the nasdaq last month, lucken coffee, they are set on taking on starbucks in china, went public they're going to open another 2,000 stores this year they'll have more stores in china than starbucks has to me i think it's a simple trade. as you look to the next identifiable catalyst, which will be starbucks earnings in late july, and obviously i think that there's probably not a resolution to the china trade deal so should weigh on second half

guidance i think you short this with the fine risk. play for a move back toward the low 70s. when the stock was trading about 83 today, you could look out to august expiration, which will capture the earnings event buy the august $82.50, pay $2.5 for that, buy one of the august puts for 3 bucks, selling one of the 70 puts at 50 cents, it breaks even at 80, make 10 bucks between 80 and 70 with your max gain below that. what's interesting is above below, you lose $2.50, about 3% of the stock price but this is just up on a massive, massive spike here. and i like the risk/reward of this trade because i have earnings that i think there's going to be negative headlines about trade the next couple of months. >> there's a couple of things i like about this trade. first fundamentally, you mentioned it was trading 30 times earnings that's a high number in the last five years, it was really only one period of time where this was trading a the a

higher multiple, late 2015 had you bought it in late 2015 what you would have gotten was a 20% decline, not that attractive the other thing is thinking about any situation where you're going to naked short the stock, given the direction it's taken, that's a very dangerous exercise it's an ill advised exercise i absolutely think this makes sense. you've identified a catalyst, identified a fundamental reason. if the technicals line up, i'll defer to smarter men than i, then i absolutely like this trade. >> let's say this, it's steep, it's uncorrected, it's very popular. if buying and selling is dependant on selling to someone else a the a higher price, who is the incremental buyer at these valuations is it the defensive security it's maybe believed to be? think about what it did in the financial crisis not a bank it dropped from 20 to 3.5. that's an 80% decline. if you were to get into a softer period, people do cut back on $8

cups cough and $4, they drink $3 or none. the point is it's not immune it's not a god and it's come a long way. for everything options action, check out our website. sign up for our super-cool newsletter rumor has it this week's edition has the winning mega millions jackpot numbers. here's what's coming up next . where's the beef where's the beef where's the beef >> there isn't any with beyond meat up 450% from its ipo, you won't believe where options traders see it heading next calling all options action fans reach into your pocket grab your phone. tweet your question questions @optionsaction if it's nice, we'll answer it on air. ♪

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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." beyond meat wowing wall street, up 40% today after crushing its first earnings report last night. the stock is now at 450% from its may 2nd ipo price and that's got options traders salivating. a whopping 350,000 options contracts trading today, making it the fourth most active single stock behind only apple, advanced micro, and tesla. michael is breaking it down with a call to action.

>> how much interest is there in beyond meat? it's beyond belief, really 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 what we can see is in notional terms, the open interest, notional terms is the number of contracts outstanding times the current share price. the idea being an open contract in a high-dollar stock like beyond meat is more won't than open contract in a low-dollar stock like ford. beyond meat has $3.5 billion of notional interest in the current options. that is more than craft hines. it's more than pepsi it's closing in on mcdonalds and starbucks. remarkable ers on things are remarkable take a look at the chart since the ipo. it's had a huge move why is there so much open space in this chart?

the reason is because right now the options market is implying a huge potential move between now and then, about 60 bucks 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 high short interest as beyond meat does the stock has become hard to borrow actually, you could buy the stock forward closer to 100 bucks than where it's trading right now if you used options to buy it 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 consider that with the stock closing around $140 today, you could buy the 110, 140 call spread, a $30 call spread, for less than 15 bucks when i was looking at that. the reason for that was these lower strike call options were essentially trading for the amount they were already in the money. that is pretty remarkable. meaning that you could buy those

110 calls rather than a stock and you wouldn't have any risk of it fall building that level or you could buy this $30 call spread for less than 15 bucks. if the stock stayed here you would make the difference. and obviously if it rose you would make the difference. you wouldn't actually start losing money until it fell to 124.60 or below. those odds look good, why is that the case? because in this environment the options market thinks this stock is going to be lower by the end of the year than it is right now. >> let's trade it. who's buying into beyond dan? >> obviously not me. not the stock or the whatever they call those things between the bread. you know, we've tried them on "fast money," wasn't a particularly nice experience the way mike is laying it out, if you're inclined to get long the stock, that is one to capture a 6%, 8% move, something like that. who knows this stock was up almost $40 today, what could it be on some competitive announcement how much could it be down? this is the wild wild west

i suspect a lot of people are trading this interday. >> wednesday we highlighted unusual activity in this going into earnings. we spoke specifically about the june 155-160 call spread that expires a week from today. somebody bought 2,600 of those and that seemed absurd at the time the stock was trading $100 here we are, it's $140 that trade is already a winner just based on the move we've seen but what we're seeing here is that when there's no stock available to short, everybody who's short it can be already, then it's very hard for folks who are going to try to make those bets that's one of the things i think is feeding into this. >> there's no history for this stock. >> exactly against stock having one day of trading. here's the low, here's the high, here's the close two days, four the point is, if pattern interpretation is trying to figure out where you are in relation to where you've been to determine whether you're about to break out, make new high or undercut prior lows, where people own it, where supply is,

where memory is, 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 i'd rather fade it here than bet on further gains. >> we've seen other ipos with this kind of spraf frenzy and you've got to be careful up next, investors budding into apple with the stock up nearly 9%, great news for one of our traders. it's friday, it means we're taking your options questions live on the show @optionsaction. you might get your answer on air. (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. ♪ last week dan laid out a plan to play apple after recent turmoil. >> i see technical resistance up at that 200, 220 level, and i see very good support 160 to 140. i say to myself, the next two events, one, we cannot model, we don't know what will happen.

the next one which has been a catalyst the last six months will be earnings you could sell the august 150 put, $2.75, use the proceeds of that and buy one of the august $195 call forth $2.75. >> apple soaring this week dan, how are you managing the trade? >> you sold a put to buy a call. it's out in august we still have the same catalyst. obviously this thing caught a bit with the market and more so. the most important thing is cover that downside put. offered at less than $1, i think 88 cents wrt 190 call that you're left long is worth 7 bucks, or the 195 call is worth about 7 bucks. you have the stock at 190. you can roll a portion of those profits up to a higher strike call spread, if you think there are higher highs in the stock, or sell a higher strike call like the august 220 call at $1

then you have the 195-220 spread in august on you have it for a credit that's a good setup here, especially if you think that there will be a resolution to the china situation and better earnings. >> all right up next, we've got your tweets and the request "final call." hat'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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♪♪ "final call" time. carter >> mining stocks, bouillon, however you want to do it, i like gold call. >> i like call spreads and gld to make your gold call, and i wouldn't buy beyond meat. >> what about my starbucks delayed? i'm getting pushback from the farley girl on this my starbucks trade. i think you take profits. >> i didn't know they were "options action" fans. >> they are, she is. put spreads. >> see you back here next friday at 5:30 eastern time

want to day now how much a stock will rise or call? we can't see the future but using back of a nap tin technique to calculate the implied move first identify a catalyst. let's use earnings you find the at the money str straddle or cat and put of the same strike for the expiry closest to that event. add the price of that put and that call and divide it by the stock price. boom, you have the implied move. let's use stock xyz. the stock is parading 1.50, so the straddle is the 1.50 strike at the money put and call. in this example say the price of the call is 7. the price of the put is 6.50 so add those together and it comes to 13.50 that means the options market is expecting xyx stock to move

13.50 up or down, or 9% either direction from $150. that's the implied move. there's no guarantee that a stock will move this much one way or the other, but this is a good gauge for predicting volatility i'm mike khouw now you know your options. 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 and when you