professor khouw called me out.ing about mna, cbs, you're selling a call that you own for 1% of the stock price? mike, come on, buddy. >> wow, okay, yeah well, first of all, take a look at the strike, a $60 strike versus a 70-odd dollar strike. we're both selling premium around the same levels the other thing is this is a situation we've identified a specific area of resistance. we're trying to keep that options premium that we're spending the extrinsic premium is down. $3.30 option, that's not all extrinsic premium. we want to think about that as a function of how much out of the money premium we're spending this is getting a little wonky but it's an options show this is the idea here, we're trying to mitigate some of the decay the option has, mitigate some of the downside risk the stock has, and identify essentially an area we would be looking to exit at if we get this right, a 20% move to the upside, pretty strong. >> i think guy's valuation call, for the potential catalyst, makes a lot of sense to define your ri

mike khouw will tell you how to ilowba io frn cknta sme.e are live at the nasdaq in times square more "options action" still ahead. what do you look for when you trade? 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. ♪ with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than a dollar a day. his secret? selectquote. in just minutes, a selectquote agent will comparison shop nearly a dozen highly-rated life insurance companies, and give you a choice of your five best rates. duncan's wife cas

so i get to talk now >> yes >> so i actually agree with mike khouw, surprise, surprise. go back to the beginning of 2017 and look where activision took off from not surprisingly around 37.50, the number that mike just gave you and the stock has not traded particularly well. it's not like it's bounced all that much. the stock has gone from basically 80 down to 44 with nary a bounce. i think there is further downside however, if you want to play it from the long side into space, look at what take two has done, bottomed out the same level we saw back in march, on huge volume, the same type of volume we saw in march. if you're looking for a pairs trade and want exposure in the space, long the equity in take two and put on this brilliant options trade that mike and dan just spoke to in activision. >> mike, last word maybe commentary on this pair trade. >> i like that idea that's even more complicated than the things we normally come up with here. but i like that idea here's the thing to dan's point. to the risk reversal idea, you're looking for a catalyst and you're going to

>> not so fast mike khouw says the worst is behind him he'll break it down. and -- ♪ go on take the money and run >> the longest winning streak in years. after soaring off december lows, it is time to take your money and run. he'll lay out the trade. it's time to risk less and make more the action begins now. >>> and we start with the financials snapping the longest weekly winning streak since 2012 this could be the end game for the sector hot in the first few weeks in the year despite the selloff citi and bank of america are up. morgan stanley, jpmorgan and wells fargo up about 3%. and dan is taking a look. >> we touched on the banks in the first week of december on the show i think we were all in agreement that the underperformance for 2018 was a really bad tell for this group what happened in december? the bank group crashed, at least the u.s. banks did citibank in particular dropped 25% in a month down to its christmas eve lows that's the one we're going to focus on again what are some of the reasons over the last couple of days that maybe have been spook

>> not so fast because mike khouw says the worst is behind it he'll break it down. ♪ go on take the moneynd run >> financials just snapped a longest winning streak in years. after soaring off the december lows, dan nathan says it's time to take your money and run he'll lay out the trade. it's time to risk less and make more the action begins now. >> we start with the financials. snapping the longest weekly winning streak since 2012, and this could be the end game for the sector after coming out of the gates hot in the first few weeks of the year despite the sell-off citi and bank of america are up double din digits in 2019. jpmorgan, wells fargo, morgan stanley only up 3% is this the beginning of the end for the bank rally >> i think it is we touched on banks in the first week of december i think we agreed the underperformance for all 2018 was a really bad tell for this quup what happened in december, the bank group crashed at least the u.s. banks did. citibank in particular dropped 25% in a month, down to its christmas eve lows i want to hit on a couple of things what are some of the rea

. >>> plus, fast food stocks are sizzling but mike khouw says there's one name in the bunch that's too hot to handle. he'll give us the trade. and alphabet it's the final frontier. alphabet is the last of the faang stocks to report earnings next week. as the stock has lagged its peers this year, the chart master says there's more pain ahead. he will explain. it's time to risk less and make more the action begins now. >> and we start with the final faang frontier alphabet is set to report monday after the bell will it follow the likes of facebook up 10% from its earnings report this week or maybe follow netflix and amazon lower. let's get straight to the chart master, carter worth, over at the plasma. >> high stakes poker betting against one of thegreat champions of all time but that's the bet here its pattern is not similar to facebook, it's quite similar to amazon let's look at it the '09 low, ten years, putting the lines and what we know, it is ascending perfectly it has bounced repeatedly off the well-defined trend line, literally to the penny, to the penny, to the penny. and then i

hitter on "options action" last friday, i shall ask you about this action and this trade that mike khouwve for mike grows. it's exponential growth so i'm in the b.k. camp there's something going on in the metals space to transsent all this mumbo jumbo i'm with mike. >> thanks, mike, for that. for more "options action" the full show friday at 5:30 eastern time up next, final trades. i don't know what'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. ♪ ♪ ♪ let's go from plans... to full-blown production. ♪ ♪ let's go from being on-call... ♪ ♪ to being on-line. american express can help move your business forward with loans, vendor

trader is betting more than $1 million that the lemon seller is about to get put through the wash mike khouw is with us from san francisco with the options action hey, mike. >> hi there. yeah, we did see a big and unusual trade in bed, bath and beyond today we saw someone buy 19,000 of the may 14 puts. they spent 67 cents per contract times 100 so that's $67 per contract times 19,000. that represents just under 2 million shares they're makinga potentially bearish bet that the stock could fall as much as 20% by may expiration i think they're targeting earnings which they announce on april 10th it has moved an average of 18% over the last five quarters they report. >> mike khouw, thanks for that for more on big box and home depot, tune into "mad money" tonight. jim is breaking down the big box retailer. >>> still ahead on "fast," gw pharma soaring after seeing triple-digit revenue growth last quarter. 'lbrg wel inyou the very latest on that stock when "fast money" returns. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels

. >>> plus, video game stocks have been glitching, but mike khouw says there's one name that is about to re-up online. he'll tell us what that is >>> and later, it's the ultimate tag team

this year up nearly 20% but one trader says one home nld are has more room to run let's go to make khouwn francisco. >> we are looking at dr horton dhy today trading well over two times the average daily options volume calls outpaced puts by 7 to 1 and a notable trade i saw was the purchase of the august 41 calls somebody paid $3.44 aet for 2000 of those. for those to break even the stock has to be above that 41 strike price by the premium they paid that would be an increase of over 10% but i think we can assume that someone who is buyingthe calls isn't hoping only tobreak even but actually make money. so i would actually assume any are targeting highs from last april getting us to over $46 personally, i think dr horton looks reasonably cheap here at 10 times earnings that's the number they are targeting. >> let's go to grasso. >> isi, the dr horton specifically, is cheap the price to book it's more expensive than lennar i'm long lennar but a couple of things went on today. isi inflection point in the home builders space you had the avoidance of the government shutdown that's positive fo

so let's get the options action on twitter, see how the traders are playing that get to mike khouw in francisco. >> yes twitter was interesting today. we saw bullish bets outpacing bearish ones with double the average daily call volume. the implied move going into earnings is about 12.5%. that's a lot, but it is in line with the average move that twitter has seen in its history as a publicly traded company and where we saw most of that opening activity today was in the february 8th weekly 35 strike calls over 8,000 of those traded for about $1.80. the stock would need to be up nearly 9% for those just to break even but i think it's reasonable to assume that that trader is hoping to make money by buying calls. presumably they're betting on a bet that the stock is going higher by at least 13% or so. >> what kind of activity have you seen in general in the social stocks, especially since a lot of other companies have reported earnings already. what do you see going on in the future >> you know, it's interesting because in a lot of places, this is one of those cases where we actually are

mike khouw in san francisco. check out options action tomorrow at 5:30 p.m.t. >>> meantime, look at shares of nvidia soaring after reporting earnings we will hear from the c suite in just a few minutes we are live omhefr t nasdaq in times square much more "fast money" still ahead. we're drowning in information. where in all of this is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you partner with a firm that combines trusted, personal advice with the cutting edge tools and insights to help you not only see your potential, but live it too. morgan stanley. ♪ ♪ our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest. >>> welcome back we've got an earnings alert on nvidia that stock ripping higher in the after-hours session. let's get to josh lipton in san francisco. the conference call is under way. hey, josh. >> melissa, we're hearing from a cfo and she's talking about this q4 revenue drop that we saw driven mostly by the drop in gaming you saw gaming reven

plus -- ♪ oh, yeah >> fast food stocks are sizzling but mike khouw says there's one name in the bunch to ham. he'll give us the trade. and alphabet it's the final frontier. alphabet i

. >>> plus, video game stocks have been glitching, but mike khouw says there's one name that is aboutre-up online. he'll tell us what that is >>> and

mike khouw will tell you how to get some of it back. >>> and i can't deny the fact that you like me right now. >> netflix is heading to the red carpet but will a boatload of oscars really make it an award-winning stock? the traders weigh in thers chor"ft nee'mu me asmoy" right after this hey, how ya doing? uh, phil. are you guys good with brakes? we're ok. just ok? we got a saying here. if the brakes don't stop it, something will. that's not a real saying. it is around here. i wrote it. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network, according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing. your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity. ♪ ♪ let's go from plans... to full-blown production. ♪ ♪ let's go from being on-call... ♪ ♪ to being on-line. american express can help move your business forward with loans, vendor payments and b

>> not so fast because mike khouw says the worst it behind it he'll break it

. >>> plus, fast food stocks are sizzling but mike khouw says there's one name in the bunch that's toondle. he'll give us the trade. and alphabet it's the final frontier.

. >> all right, thanks for that, mike mike khouw in san francisco.actiochk n ec out the full show friday at 5:30 eastern time. >>> up next, we've got the final trades what do you look for when you trade? 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. ♪ (butcher) we both know you're not just looking for pork chops. you're searching for something more... ...red-blooded. right this way. you thirst for adrenaline, you hunger for raw power. well, you've come to the right place. the road is yours, dig in. >>> welcome back we asked you on twitter to pick a new song to replace our classic fast pitch tune, toni

but mike khouw says there's one name that is about to re-up on lives.

. >>> plus -- ♪ oh yeah >> fast food stocks are sizzling but mike khouw says there's one name in the final frontier. alphabet i

>> not so fast because mike khouw says the worst is behind it he'll break it down. ♪