>> i don't think this that with rus the type of thing that people would benefit from that >> you know, the newest fleet of air bus, something like that but delta airlines, a name certainly we are watching. >> of course check out our

website. options action, and you can check out the newsletter as well here's what's coming up next >> coming up, the scientific method to boston scientific ahead of the two upcoming events for the star plus, calling all options parents, grab your phone and tweet us your question if it's nice we'll arns it on air when options action returns. ♪ ♪ ♪

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♪ welcome back to options action the conference is kicking off next week and it's known for some interesting groups. for more on what we can expect, we're back. >> the look at stocks and that sector going back to 2000 wurn and biotech stocks outperformed the markets more than three years. one of those down weeks was in 2016, the last presidential election year. i spoke with the head of investment banking history doesn't necessarily suggest there will be that much

disruption we're seeing that that it could happen again and we're watching stocks among the bigger biotech companies this week. >> sticking with the health care space, check out this mystery name more than 20% in just the last three months and outpacing the health care sector he's got a way to plant and the call to action around who is it. >> we are talking about boston scientific here's some of the reasons why you might look at doing a trade like that. we have an inverted term

structure, that is when the shorter dated ones counter spreads are also nice because they improve the profit. the near dated options tend to decay more rapidly than the longer dated options so these options that you're short are paying more than what you're losing a 20% run in three months, this is one of those situations where you can fool like it's a little bit dangerous to go out and chase the stock. here you can see that term structure that we're seeing. we'll take a look at buying. two reasons for that one is the conference next week and let's take a look at the stock. we can see the move it has made. 20% off the bottom we'll find a way to get some near upside exposure to this without taking risk in case uld

should find its way to the october lows diagonal call spread you would buy those call spreads. sell the shorter 48 calls. you're spending $2 this is a trade that's going to see basically peak profits at 48 if you elect it at that time you continue to hold that longer dated call or look to roll it. but this is a trade where you've got time working for you you're taking advantage of the fact that near dated options premiums are elevated both for that conference and for the earnings >> so sounds like we're all thinking the same thing with respect to stocks that are near its all time highs by collecting that 60 cents you're only risking the stock

price. i like this level. i see if you get that breakout above it you still get that room to grow above it >> this is what you'd called an old reliable boston scientific is something you see. it's almost five fold and it's going to press higher again. >> i mean boston scientific is a big name that's a big company and what about these pure bioteches where you roll the deuce and if you hit it you can win big and if not it goes down a lot >> it's been a lig lagger and it is starting to show relative performance. you've also got steady eddies like the managed care stocks

so i think you've got the upside potential or beta trade but you've got the sector overall. >> obviously some of those are one trick ponieponies if it doesn't obviously disaster could follow and bogs ston scientific tends to acquire some of the technologies that return as well you have companies that basically can make acquisitions and that's probably a safer way to say it. >> buying some of those smaller mid cap bioteches is almost like an option. snoit's exa . >> it's exactly. >> the difference there is when you buy an option you have limited risk when you buy the biotech you are taking on an unlimited nature.

health care has been much stronger laity >> ibb stopped. >> and it looks like it's going to make a high >> you think so? >> it's reacted to a former level precisely. it's been doing this for almost three or four weeks and it's up again. >> coming up, a crazy week for crude oil. tensions in iran sparked a wild ride for the commodity up. >> and do you have a burning question probably a lot send your question over to our twitter handle we're back after this. ♪

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♪ ♪ ♪ ♪ ♪ we come back it's time to take a look back at a couple of open trades. mike and kartder bet on a high energy rally in the xle. >> it's waiting now right here

we're bound back to the level when ciscoe was worth more than any company in the world energies historical waiting is 9.56789 here at this low level of foreign change i think we'll move back to 4 to 5% of the s&p. >> the 60 spot 21 calls. those are almost precisely at the money where xle traded today. >> it has been a crude awakening for the investor stocks. so mike, what are you doing now here >> you know, i'll defer to carter on the technical aspects but one of the reasons we are buying calls, they were cheap, it limited risk, both of those two things remain true i think what surprised a lot of people is that we didn't see a big spike amid the turmoil of in

the middle east. >> look at twitter >> i think i do follow you on twitter but i didn't catch that one. what we were talking about remains true, i would stay with it >> it pops, gave it back, we're down a percent, i mean you've got oa lot of news thrown at the sector it's held up and i think you should stay. >> i we are talking about a week which is like a net because the market is deeply backwarding and we are seeing opex cuts start to work a little bit. the u.s. industry is starting to work and this trade and you might longer term even medium term might be right i'm not making a call but this is a sector and i can feel a little bit of that sort of the feeling change among investors high yield debt this week.

midstream equity partners issued huge blocks of debt, gobbled up according to my sources. >> and mike's trade is going all the way out to april a lot of things can happen between now and april. if you want to reduce your risk a little you can sell a little bit of outside calls here to reduce the calls here. >> i would be looking out to very short dated an xle looking at 6 1rks 62. collect a little bit of premium. you can do this. >> a lot of people are hoping mike is right. tony said the party in the pantry might be over for one consumer staples name. >> looking at here in late october this stock below its average and not only did it brachybelow the long-term moving average, relative basis has started to deteriorate suns

then it has recovered just last week but got rejected toward that level. i'm looking at the put spread and i'm buying that $70 put that's costing me in the money to offset some of that high implied volatility >> so with a few weeks before this trade expires, how do you manage it? >> it's still below the moving arch this trade is down about 35% if it moves another 40 cents against us this is where i'd cut losses here. >> up next, your tweets in the 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

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>> and delta clear leader out of the legacy airlines. >> good show, guys we'll have a good discussion on a lot of levels. we'll be back here friday. mad money with jim starts next - [announcer] the following program is a paid advertisement for the nuwave brio digital air fryer, sponsored by nuwave. live well for less. we all love fried foods, but yuck that means scoops of grease, blobs of butter, or gallons of oil just to fry. this adds up to a lot of unhealthy fat in your diet year after year. stop! now you can cut out all the added fat, and still keep all the flavor with the new brio digital air fryer by nuwave, the world's first digital air fryer with flavor infusion technology. coming up next, you'll see how brio's compact design makes mountains of crispy wings