♪ i know you're waiting on the other side ♪ ♪ i'm like you on-demand glucose monitoring. because they're always on. another life-changing technology from abbott. so you don't wait for life. you live it. happy friday we have a great show lined up for you. here is what is coming up. >> big tech on deck, but watch out for the albatross. and one you might heed the warning of and then, what is the dilley-yo with twilio. it will be broken down into terms you can understand >> and trading his calculator

for a combine. to explain why and how, this could the season to sow a plan around adm options action starts right now. >> let's jump right in another huge slate of earnings coming up this coming week including -- chart masters say investors should take caution before heading into it. >> it is the biggest week in terms of earnings, but there is a circumstance, the five biggest names are all reporting on the same calendar week it goes back to facebook he is ipo. the three other times this has happened, apple, microsoft, amazon, google, it has been a down week each time.

what we know is that the market itself is so dependent on tech and-or growth. look at the first bullet point basically when tech is down, the s & p itself is down 80% of the time the second bullet point. when the growth index -- now we pick up amazon and google and facebook when the s&p growth index is down, the tech sector is down 93% of the time. take a look at the chart it peaked on september 2 it's the area that broke the hardest dropping almost 15% versus the s&p down only 10,

10 1/2 ever since then its relative performance has been quite poor. so the question is are these names, having been so ahead of the market for so long and having stalled on a relative basis and reporting in the same week, is it a time to be cautious on these large names. the thinking is yes. >> so given that, mike, what is the trade? >> this is an interesting situation as carter pointed out. the biggest stocks represent nearing half of the qq dwurch -- qqq. to get to that you would have to have tesla the street absorbed that in a hoe hum way. the stock hasn't performed particularly well since then these stocks are all trading close to ten-year highs in terms

of valuation 35 times earnings for microsoft, 35 times for apple, and 32 for google then you look at the options prices we are seeing they are fairly elevated earnings is one reason the election is clearly another. and then there are stories involved with these names as well we have google and antitrust concerns i think the way to play this, if you hold a lot of these stocks -- and chances are if you own stocks, you own some of these -- you probably need to use quick spreads to deal with the higher implied volatility. i was looking at december. that is going to keep some premium because it will capture the election as well the december spread, could you spend about $11.75 and net-net,

you would be spending a relatively small amount of the qs this isn't a bet that we are going to roll over it is seeing some exhaustion in the market, seeing some exhaustion in these names. understanding that some of the head winds might persist after earnings it's hard to see these names breaking out apple has the iphone 12 break out. those are exciting things, but the valuation is in that already. >> if you look at facebook, they had huge runs which might play into your setups they may have made these gains already based on snap. what do you make of the trades

>> if you look at qqq, it held a pretty major support level i think it has been fairly constructive for the index to hold this level, but one catalyst i am more concerned about outside of the earnings next week is the potential of a contested election i think that's the type of catalyst that could drive technology shares down 5 to 10%. i think mike's way is a good way for investors who want to remain to stay in and take a cheap way to buy yourself some downside protection down to the 2.50 level, only costing you about 1.5% of the etf value. >> if you are like tony, less concerned about what is coming up and want to buy the

protection, you can take advantage of the elevated volatility by selling upside a lot of these are selling close to their high levels, so you can basically finance this way >> the shares of twilio is up more than 200% tony, what do you say? >> like you said, this stuck is up over second base0200% this y. it is not a household name so not a lot of investors know what they do. they are a b 2 b company they have the ability to embed voice text into their mobile and web applications they have made some smart acquisitions over the last couple years that allow them to project another 30% year over

year growth for the next four years, so a substantial amount of growth the company is expecting over the next half a decade or so if you look at the chart, you have a recent breakout above the 290 resistance level it has come back to test that as support and is running higher. when you compare that to the technology sector, not only is it outperforming the technology sector, but the cloud computing index, which is up the trade setup i have is taking into account the implied volatility the stock itself averages about a 13.6% on earnings white implied is only figuring about

8% i am using something called debit call and i am trying to further reduce that by using it in the money call option i am going to november buying the 340 call spread and paying about $21.40, collecting about $8.50 for the 340 which puts my break even price at about $313, which is only about a 2 1/2% move to the upside. i am expecting on a strong earnings play to beat that break even level by a substantial margin >> carter, how do you think the chart is set up for tony's trade? >> tony zeroed in on the big gap up, thursday, analyst day. the company remarkably pledged revenue growth of 30% each year

for the next four years. this is a powerful kind of setup. stocks that gap up often gap again. i would want to be long, not short. >> mike, what do you think of the trade? >> i'm in. the situation here is that this is obviously a story stock as much as anything if you are going to make a bullish play, you do it in a more idiosyncratic situation it is a growth story and options are not that high relative to the kinds of moves we have seen historically. that's the time you want to look at using options, when you have these types of stocks and can buy the options at a reasonable price relevant to historic price. all right. sign up for our newsletter

here is what is coming up next hold on to your hay bales. old mcdonald has a barn, but a strategy on adm. who do you think will have a more bountiful harvest tweet us your question at tisaion. if it's nice we will answer it on air ♪ ♪ ♪

♪ ♪ ♪ ♪ ♪ welcome back if you caught the show, you will

remember that the professor found a way to get bearish on don. >> if we take a look at the spread between the price for options going up three months or so and how volatile it has been, the spread is quite wide we can interpret this one of two ways i think the options market is telling us there is some danger ahead for people who hold long-term u.s. treasuries. i was looking up to january. you could spend 2.50 the tlt doesn't move a great deal, but when it starts to move, it can be aggressive >> that turned out to be a good trade. rates have skyrocketed since then hitting their highest levels in four months. mike is back with a way to try

for bigger gains >> if you follow us on twitter, and you should, you will know we did an update on this trade. we offered two ways to spread it one was to sell the january puts, you are essentially in the trade for free and the other way was to sell the fourth weekly and you would be in for no money if you are putting it on the calendar spread, you are looking for a total of 20 basis points that carter was talking about. there are two ways you can spread it. >> believe it or not, that's not all mike has to offer. the professor has another thing to offer for this rate rebound >> we have a bearish trade on tech and long-term bonds you might think i'm bearish on everything, but not completely

agricultural stock adn has a strong balance sheet and stable business a lot of bad stuff has been priced in, like ethanol has been hurt by falling fuel prices. we do have a slightly attractive v voltivety level. the stock is breaking out to new highs for the year i think the way to play this is with a call spread i was looking to january this is slightly in the money because the stock was under 52 when i looked at it. you could buy it for 3.50 and sell against it for 65 cents notice there is only about a dollar in the money and i am offsetting more than a third of that this is a way we can make a

hedge bet to the upside, mitigate the decay and take advantage of one of the few stocks trading at a high multiple >> carter? >> when we discussed this earlier there were a couple of things that sat up well. first, look what the grains and salts are doing, sugar, corn, wheat, cotton all up between 15 and 30% over the past three months and look what the market has done, nowhere near as interesting. look at copper and oil that means the first are up by

25%. caterpillar versus archer daniels. they are correlated. we know that a lot of cats business comes from land moving business and to some extenting a. -- ag. i have added john deere. it has already broken out. we think it leads the way for both cat and archer daniels. so archer daniels the up and out good up trend. what is not to like? now where are we back to >> exactly back to the 2018 high circle that and you see the arrow implying breaking out. the more authority a level has, the more authoritative the resolution final chart. this level has been in play all of the way back to 2013 and 2014 so a breakout here, and we think

that's what is going to happen, archer daniels is a powerful thing. we think grains are telling us that is what will happen >> tony? >> if you look at archer daniels on paper, it looks foreign it doesn't have a lot of revenue growth, operates on thin margins, but it has a strong track record of beating earnings and having dividends for the last 45 years. so when you couple that with the fact it is outperforming its sector, i think it trades at a reasonable multiple of 15 times year next year's earning it will be a slow gienrind, but that's what i like that's the type of money you would use on a slow grind.

the stock doesn't have to move much for the strategy to break even i like the stock and the strategy >> do you think caterpillar is due for some breakout? >> and it has earnings next week as well. i do >> got an answer coming up, snap, crackle and pop. ads.t news for one of our we will be back after this it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪

it's got all my favorite shows turn oright there.boom, 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 a trade that tony hit out of the park >> we have gotten a recent breakout above this 26.50. you couple that with the strong strength we have seen in snap chat i think that puts it well into

targeting 29.50 which is an all timehigh paying net-net here, about 1.25. >> that turned it into solid gold the stock soared to an all time high tony, how do you manage this one? >> this is one that even beat my expectations, but when you use a debit trade like this and it blows through, it's best to take profits. earlier you could have closed this out at about $3.90, pretty much the vertical spread, that would be 200% on this trade. if you missed out on snap, i think pinterest is another one that could be on the upside.

>> what does it look like to you, snap, carter? >> when you gap up, you get cheaper. something that's counter intuitive, but it means such big news has been released, fda approval, an indictment, that often you are not priced accurately there is a follow through. in this instance it has been a massive follow through in this case i think you want to harvest gains and find the next one, perhaps twilio or some other stock, but move on to a stock that has the potential to do what snap has just done >> up next, tweets and final call i'm searching for info on options trading, and look, it feels like i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations.

so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪ but before we sign i gotta ask... sure, anything. we searched you online and maybe you can explain this? i can't believe that garbage is still coming in. that is so false! frustrated with your online search results? call reputation defender today to join tens of thousands who've improved their online reputation. get your free reputation report card at reputationdefender.com or call 1-877-866-8555.

keeping your oysters growing while keeping your business growing has you swamped. (♪ ) you need to hire i need indeed indeed you do.

the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base so you can start hiring right away. claim your seventy-five-dollar credit when you post your first job at indeed.com/promo ♪ ♪ ♪ ♪ ♪ ♪ welcome back time to take some of your tweets our first viewer asks --

tony >> i like the thesis on this particular trade biden has put together an infrastructure spending plan that includes solar and has a plan that is good for this thesis but the upside in a low risk environment. i would give yourself more time than four days past the election final call carter >> short bonds playing for higher rates and archer daniels or caterpillar on the long side. >> tony? >> i like the cloud computing

name twilio. looking to buy a november called vertigo. >> call spreads in adm going into earnings. >> have a great weekend. se my mission is simple to make you money. i am here to level the plain feel for all investors there is always a bull market some where and i promise to help you find it. "mad money" starts now >> hey i am cramer welcome to "mad money," welcome to cramer america. my job is not only to entertain you but educate and teach you, call me, 1800-743-cnbc or tweet me @ji