well, it's 5:30 on a friday here at the nasdaq market. >> that can only mean one thing, here's ""options action"." >> coming up on the big show. >> vegas, baby, vegas! >> we're headed to sin city. and the chart master's feeling lucky. he'll tell us the one name he's rolling the dice on. >> plus, "a whole new world. >> that's right. it's a whole new world for disney as the company gets ready to launch its new streaming service. dan nathan says there is something else that can take

investors on a magic carpet ride they'll tell us what it is later, mike ko has a five star uber rating. how will he rate uber's stock headed into next week's earnings buckle up. it's time to risk this and much more "options action" beginning right now. >> let's get to it earnings season is in full force. dan says the stock can can injure up some magic when it releases earnings on thursday. let's get into money now dan take it away >> back in july it was outperforming the market we have a five-year chart this thing had been range bound, finding a lot of resistance for years at that 120 level and it broke out in april when they gave some color about this disney plus service, the streaming service they are rolling out in just a couple of weeks. and so that chart is really interesting to me. you see that island that it

spent in the last six or so months trading above 130 kind of interesting setup. when you think about wereings, the options market is implying less at $5 in either direction which is kind of double of the average move over the last four quarters obviously, that big move in april did not come at an earnings event but a products announcement when you think the week before the launch of disney plus, my guess is you will not get color on subscribers that investors don't have yet the announcement deal with verizon, it's a great deal, unlimited customers in the u.s. will have one year free of this disney plus service. i think it will be a sticky service. this is at the price point of about $6 this will be a force to be reckoned with. here's the trade into the report i don't know if 132-and-a-half is in front of that earnings report there is that gap that if there is any disappointment, i think

it can get in there. i think this is a name as you head into 2020 that you want long exposure for. once investors are able to model out what subscriber growth looks like and the profitability could look like as they get to tense of million office subscribers, i think the stock goes higher. here's the trick, i don't know if 132-and-a-half is a great entry point. today with the stock closing at 132-and-a-half, i think you look at a risk reversal >> that would be selling a downside put and using the proceeds to finance the purchase of an upside call. this kind of gives me some room on my entry point. today when the stock was trading 132-and-a-half, you can buy the january 120-140 risk reversal at $1.20, buying the january call at 2.20. >> that costs me $1. >> that is my masks risk the stock on expiration is 120

or lower as if i am long 120 shares, long it and have that exposure below 120 to the upside, i have unlimited exposure it costs mae dollar for that here's the thing i have this risk reward i think is very favorable. i think 120 is a level a lot of people will come back and buy it >> before we get breaking trade, let's go to eamon javers with that >> reporter: president trump is speaking to reporters on the south lawn a few moments pay go, talking about the stockmarket. the president seeing the rally today as a real endorsement of his priorities as president of the united states. i asked him about his tweet that he had made saying that the stockmarket would be much higher if it wasn't for the impeachment debate going up on capitol hill. the president said he thinks it would be much, much higher if it wasn't for impeachment oddly, the president also told me he believes that the dow went up about 300 points today because of the release ought

ukraine transcript, which, of course, was released a couple weeks to ago so the president is sort of tying all those elements together in his argument that the market very much is tracing the fortunes of his presidency he says if he were to be removed from office, there could be a real crash in the stock market the president also talking about some possible locations for his next meeting with xi jinping negotiation on the china trade deal are going well. not offering new specifics there throwing out the possibly of iowa as a meeting location for his meeting with xi jinping. he says it's all about the farmers. the president says that's not a definitive yet it's something they are considering, they do need a new meeting location now that chile cancelled the apex summit. the president is working through the list on that an interesting analysis of what happened with today's 300 point rally in saying ultimately because of the release of that uk transcript.

>> did the president mention the jobs report? >> reporter: he did, he is enthusiastic about the jobs report and he quoted the old line, it's the economy, stupid >> all right eamon, thank you, eamon javers in washington, d.c i haven't heard that that analysis in terms of linking today's record rally in the s&p 500 to the release of the ukraine transcript >> no. >> yes. >> and disney is at an issuing level. >> i love it >> listen as he brought up, if you don't have nothing nice to say say nothing at all talk about disney. >> let's resume our discussion about disney, dan had some interesting charting. >> the key is obviously if you get something that's unhappy, have you the risk of a physical fill of that gap and dan is aware of that that's why he's done the 120 level if it's put to you it will be at the gap where it's extinguished so to speak basically disney has been stuck

ever since that really epic breakout and gap on 65 million shares back in april so now the standoff continues. this is the way to get long. >> mike in vegas, what did you make of dan's trade? >> well, there are some things i like about it, if you sit there you have an upcoming catalyst, that's usually not a winning strategy he is looking to offsaid some of the long premium he is purchasing, selling some relatively short dated puts. less than 90 days is the kind of premium i'm looking to sell. we have seen some gaps lower in disney earnings. one of the most profound was certainly in august of 2015. you are not collecting that much as a percentage of the current stock price. valuation in disney is trading close to it's all time peak. you might not see that in the stock price, why is that they're taking on a lot of debt. about $40 million of incremental debt on the balance sheet. >> that is one of the reasons

why we might be seeing a higher implied move volatility of the equity will get higher we are seeing that going into earnings, so i like buying the calls there for $2.20. i'm not sure i'm comfortable at selling those puts at only 1.20. >> let's move on from the magic kingdom to sin city. the wynn resorts are up 25%. los vegas sands up 21% mgm 19% higher the chart master is still feeling lucky rolling out the dice within unof these names >> you see those numbers, those are market performing number, inline with the s&p. we're going to look at lvs and see perhaps there is something setting up which should left hand itself to a pop let me just clear this disney and we will move on to lvs yes and no okay. so there is a bit of a skew and

there it is. perfect show what i've done here first is the consumer discretionary etfxly which casino stock is discretionary. we know this lag irrelevanttive to its sector is either a problem or it has been a problem that's about to change and to be something good that's my premise. let's take a look at this chart another way, rather than a comparative line, this is the relative line, meaning this is lvs on top and relative performance on the bottom now watch, look at the next one, take a look at the following what's happened here i will zoom this in, is that we have now broken above the relative down trend line let's get rid of that, that's an important development. take a look at the top we have not broken out on an absolute basis we've started to move higher we are outperforming the sector of which it is apart we haven't broken out on absolute basis my premise here is that we are

actually for the first time now going to rather than fail at this level we are going to break out. why? because i think what you've got here is a perfect minor head and shoulders bottom and the setup calls for that lvs long side, simple as that >> mike, since you are joining us from sin city, why don't you give us a trade? >> yeah, so los vegas sands, interestingly, isn't so much a los vegas company. so less than 16% of their overall revenues come from the united states. less than 15% of the net operating income, comes from the united states. most of it from macaw and secondarily from singapore so you are talking over 80% of the revenue from those two places and macaw is very important, because we know one of the things hurting this company was there a crackdown on some of the junkets from people from carolina to macaw what they have done to try to mitigate that is they are going more towards mass market the nice thing about mass

market, even though they bet much less, the win percent sam higher 30% versus 10% for the higher baccareat players. i want to fund longer-dated calls. i was looking at the november-january 65 call spread. that was going to cost me approximately 1.30 the idea is those started dated calls which expire two weeks from today, that will offset the that longer date call purchase hopefully next month i will sell more calls and hopefully higher strike ones. so if we start to see this go up towards sky, i will still own those longer-dated 65 calls. maybe i can look to successful 65-and-a-halfs and 70s if we get the rally carter is talking about. i like the stock i am a little uneasy generally getting long stocks or short naked puts here. but i like the stock and i think this is a way we make the play on the trade side.

>> what do you think, dan? >> he didn't like the down put, that was 90 days out, 10% of the money. i don't like him selling a call only two weeks away a couple bucks out of the money and half a percent from the stock price i don't think it does much for you. if you are bullish the way mike is i think you buy a call. >> head to our website, while there, check out our newsletter. here's what's coming up next. it's been a bumpy road for uber since its ipo, if you are betting this stock will make a u-turn on earnings next week, plus, calling out "options action" fans, grab your phone and tweet us your question at "options action. if it's nice, we'll answer it on air. when "options action" returns. ♪ >> announcer: optio"options act"

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i wish my trading platform worked like that. well have you tried thinkorswim? this is totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect the value of the stocks you're interested in. now this is what i'm talking about. yeah, it'll free up more time for your... uh, true crime shows? british baking competitions. hm. didn't peg you for a crumpet guy. focus on what matters to you with thinkorswim. ♪ welcome back to "options action." if you thought disney was the only reporting agent think again. it's a full slate of earnings report after the bell monday that's not all the insider locks up wednesday, freeing up shares that can possibly hit the market. if you want to get in on the action, free up your seatbelt. we have a strategy for you mike, what is it >> yeah, so 2004 taking a look at a call calendar here. you know as you pointed out,

there's two meaningful catalyst, there isn't that much of an earnings history in cases like this where you have stocks, where they recently ipoed, very often the earnings tend to be more volatile than they are in subsequent years and investors are better able to digest the news and information that they are receiving. okay, the lockup expiring is also potentially a big catalyst and potentially can put a lot of pressure on the stock. you know one of the things that causes exceptional high premiums >> that would translate to a market capitalization move of 2.7 billion on the stock the point i would make is there is two opposing forces, this is a company burning through a lot of cash. we're not expecting them to turn a profit so i think they could potentially offer some form of an upside surprise, the ought thing is there is a significant high-short interest in the

stock, close to 30% of the float. one of the things that does when you have a lot of shorts in the name they could create a measure of support you could create pressure from insider selling. you could create support from short covering so those two things might actually mean the stock could move less than a lot of people seem to be anticipating here so i was taking a look at essentially at the money call calendar, the 32 strike, november-january this was expensive because of the high price of those near dated options. you can spend $3.10, buy the january calls, sell the ones that expire in one week for $1.80. that's a net outlay, the idea is if the stock doesn't move as much as anticipated, you could see decent profits and look for other things to do here. on the flip side, if it does get that big move, the most you will risk is the $1.30 that you spent. this is a way to move the play

get to own that longer dated call if you wish and play for these two opposing forces to potentially mitigate one another. >> carter, what do you think >> personally, i think this is flipping coins when you don't have a lot and i talked about and you also have something that is a valuation vacuum what sit really worth you haven't quite settled that, we know it can happen when you see a thing like pinterest or beyond meat and how they can plunge or a more mature stock like twitter, the risks are something unhappy happens, so, obviously, it's the way to cope. it is some sort of options trade. just to go and make a directional outright bet with the stock is that, it's a coin toss. >> actually, it's an interesting discussion i think mike laid out a scenario where it could go either way, if you are positively disposed to your name, this trade could set up okay. but i agree, if mike was coming out saying buy calls, because i

think it's going higher, that's a tougher sell i think he is taking advantage of very elevated premiums, short-dated premiums, if the stock doesn't get creamed, this works out okay i like the trade from that standpoint i agree, we're out talking options trade, i would think about the move they had over the last two earnings quarter. we know the direction that stock has been i don't think the trajectory will change either name on one quarter on a dime and give you an opportunity probably in uber to buy it lower. >> the lyft on earnings was good the stock action too. >> that was good, lyft came out earlier than uber to me i'm more focused on lyft. i think it's a better pure play. there is a lot of things going on in uber, some can be good, they're getting handles on other levels i just don't know when the bottom is. >> even lyft after pop -- popping is giving it back

>> to dan's point, i would say uber is better positioned tan many ways. the cost per rides is half of that this is a business where scale matters, fundamentally, whether it's lyft or uber will make money, i would never advise you run out and buy any of these stocks >> the october auto sales race coming in at 16.58 million and that rate is notable because it is the lowest in six months, this according to auto data. up next, one industrial stock tested metal against the street and won. we will tell you why that is great news, it's friday, tweet us your burning "options action". you might get you are your answer on air. much more "options action" right after this ♪ ♪♪

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♪ ♪ ♪ ♪ ♪ welcome back to "options action". just last week dan said u.s. steel would showits metal with a strong range support. >> the stocks at 2018, if you look at this down trend, it has been something, take a ruler and

draw a line right there. it's been bouncing off the 10 a handful of times in the last couple months here shortages of 33% wall street analysts hate it you know, i look at this and i say to myself, they don't even have to say anything good, they just don't have to say anything bad and this stock probably rallies, the 12 calls with 1170. we are offered about 58 cent >> well, x beat the straights surging 15% so what do you do now, dan >> so there is a few options here obviously, you can take the profits when it's up more than a double do you that in half. if you are still convicted, you let that run, roll it up or out or take the profit it was a good trade. it was a constrarn trade, obviously with the fine risks, it doesn't go this way, sometimes it makes sense to put them in the bank >> this is the ge, the kraft heinz, something down and down

and down and gets a pop. grab it and go >> a couple weeks, the rally in the home builders might be ready for a breather. >> another nice thing about spreads like this out of the money credit spread, they tend to have a better than 50-50 probability of profit. the reason for that as we are about to demonstrate is that you can have three things happen to a stock. so we can see here what has happened with pulte. my bet is we had a really strong run coming in here maybe we hit the pause button on earnings specifically the call was the november 39, 40 call spread. >> well, after a post-earnings pop, pullty -- pulte is down >> within have you your spreads on this is now in the money. so actually you are paying essentially to own it. i would actually blow this out on monday and look for another

opportunity to re-enter it i would say the market string that's this hasn't relatively been as strong as you otherwise may think it would be. >> for the structure on the options side, it's moved along, in terms of the premise, a group that's overbought and needs to rest and give back that part is intact. >> it is >> and it is, it's had a very bad week for home builders the thought that they will quickly get going is not a good get. >> do you agree? >> they have overshot, who knows if rates are going back down lower, it may be a support level for them i don't know >> up next, final call this piece is talking to me. yeah? so what do you see? i see an unbelievable opportunity. i see best-in-class platforms and education. i see award-winning service, and a trade desk full of experts, available to answer your toughest questions. and i see it with zero commissions on online trades.

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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 final call, mike. >> uber call calendar is going into earnings and the lack of expiration. >> carter. >> walgreens, lv

>> dan >> wow, listen, disney had a really nice bounce off that 200 average moving day >> we'll see you back here next friday for "options action". have a great weekend "mad money" starts right now - [narrator] the following is a paid advertisement for the hoover smartwash. when your throw rugs need cleaning, you toss them in the washing machine, easy. if only you could do the same for your carpet. instead, here's what carpet cleaning looks like for many of us hauling around heavy, bulky rental machines. they're a hassle. and do you really want to bring someone else's dirt into your home? and then there's all the mixing, soaking, waiting forever for your carpet to dry. no wonder we sometimes give up and call in a pro, but that's a whole other level of pain. they're all over your house. you're left with a damp carpet and it costs a fortune.