attorney hugh totten of valorem group and alan knuckman of option shop join us this morning with reactiongood to have you guys on the show today. > > thank you for having me. > > thank you. > alan, what was your immediate reaction when you heard the news? > > as a trader, we look at this more for fun than anything else. the prediction markets do provide a variable price discovery mechanism for some things that aren't traded on exchanges, and it's interesting to see, because as a contrarian, if everybody is leaning one direction, i am usually thinking that they're wrong, because the public is usually wrong, and might want to look at things the other way > hugh, is that what got the company into trouble? > > i think what got them into trouble is, if it walks like a duck and talks like a duck, it is a duck. in addition to trading on predictions of a political nature or even, according to their website today, who is going to win the academy award, what they are trading on are futures of gold prices, futures of economic indicators; and those are things that are actually traded on an exchange,

alan knuckman of option-shop joins us this morning from cme group. good morning alan. > > good morning angie. > > weeks before the election, although we questioned it, traders were confidentely telling us the president would be re-elected. it happened. so how do the odds look for a recession in 2013? > > the markets tell us a lot. when we were looking at the election, we were looking at a prediction market that had a lot of volume. volume is the key to price discovery because of all the buyers and sellers. when we are looking at the fiscal cliff numbers, they are not as clear, because there is not as many traders to get that information from. > > ben bernanke was in new york yesterday, and he is urging lawmakers to strike a deal on the fiscal cliff sooner rather than later. should we be concerned? because it sounds like the fed is worried. > > we are always concerned. if you look at it, the long-term bears have been beaten up by the markets for the last four years. so, the market has been resilient and bounced back from everything. if we look at some

joining us now, pro traders alan knuckman and jared levy. good morning guys. round one: certainty of uncertainty? won't there always be some level of uncertainty in the world? should that really hamper hiring? > > it's an excuse. it's a cost-cutting excuse. why hire people, why pay for that? and a good example of not hiring because of technology is, look around the exchange. there used to be 10,000 guys in the pits. guess what? they trade on a screen now, and that has changed the employment picture. > > there are different times of uncertainty. if you are in a plane and the pilot's uncertain he can land safely, you are going to have a different concern than if there's uncertainty whether you're going to get your coffee or maybe some tea. > > i am not completely certain my tooth isn't going to get knocked out, but i still brush my teeth. > > but again, it's how much danger is looming, and right now, the danger that's looming is still a little bit more uncontrollable. > > sky is falling! sky is falling! sky is falling! > > round two: high commodity. what's likel

joining us for traders unplugged, pro traders alan knuckman and jared levy. good morning guys. round one: election reaction realities. did the market immediately sell off because president obama was re-elected? > > let me hear this one, alan. go ahead, tell us. > > absolutely, positively not. this was a sell-the-fact-type exit for a lot of people. it had always been priced in that obama was going to win. we're going to have a democratic senate, democratic president, and republican house. so nothing has changed. and guess what happened the last time nothing changed? the market was up over 100% over the last four years. > > here's what really happened. starting back in late of last year, you saw the chances for a republican candidate begin to rise, and it actually heated up here over the past couple- > > never got above 50% in the last year. > > hold on the sec, i'm going to talk. the s&p rallied about 215 points in that period of time. we lost about 3-4% over the past couple of days, and i think if you just look at it, if you just look at the futures reaction to what happened wit

professional options trader alan knuckman and oil trader phil flynn, who is also with fox business newshe contributes, are ready to weigh in. here we go guys: "spare us a quarter:" we are halfway through the quarter. what is your takeaway on the numbers? > > i'm going to remain optimistic. in the price action we're only 3.5% off of the multi-year highs. we weren't expecting much for this quarter. we came in with earnings growth of about 1% when we were actually expecting negative earnings growth. that's a positive. > > it's not positive if you want to get reelected, i'll tell you that. the numbers aren't that good. but we did see a big tick-up in consumer confidence. you know why? probably because gasoline prices went down. > > round 2: fracking friction - the government has spent billions on research that has unlocked natural gas right here in our own country- good idea or bad? > > great idea! what are you talking about? but why does the government get credit for spending money? george mitchell is the guy that figured out the fracking and the directional drilling. the government always

alan knuckman of option shop joins us this morning. good morning. similar to the way you chart stocks, you have been watching the intrade charts on this election throughout the season. here we are. it's election day. what does the chart say? > > the probability markets tell us a lot. as a trader, we've got to remember that we're capitalists. we're not democrats, we're not republicans. we want to see the markets move and take advantage of whatever opportunities are out there. looking at the charts, the price chart on mitt romney had been in an uptrend from september of 2011 to september 2012, but we have been unable to regain that uptrend angle, and if it can't get above that trend line, that resistance at 40, it looks like probability is not on mitt romney's side. > > now, fair to say, just like with a stock, the charts are not 100%, correct? > > of course not, but the idea is it's a price mechanism that determines and distills out the price. based on all the information that everybody knows, they buy or sell accordingly, and right now, things are v

joining for us for traders unplugged, pro traders alan knuckman and jared levy. round one: taking flight. millions of americans are boarding jets this season for the holidays. which airline stock is ready for lift-off? > > i look at this in a couple of different ways. i have never liked airline stocks because it's- > > tough sector. > > you have a tough sector, you have gasoline prices to deal with, and obviously you have the ebb and flow of the consumer. i think the place to look here are the booking sites, the pricelines, the expedias of the world. those are always, i think, going to prosper, where people are looking for cheap flights- > > and guess what, they don't have to pay for a plane, and they don't have unions to deal with, pilots and so forth. i like boeing. i think boeing is doing some amazing cost-cutting things. yes, there is concern about the defense industry retracting or not growing as fast as people have thought, but they are looking to bank about $4 billion in cost- cutting savings. they are laying off 30% of the middle managers. so guess what,

joining us this week, a pair of options pros - alan knuckman and andrew keene.good morning guys. > > good morning angie. > round number one: dividend distributions. will a new, higher capital gains rate ruin the dividend stock payoff? and what will it mean for tech stocks or bonds? > > tech stocks i think are interesting and bonds as well. we have seen 103 companies report special dividends in quarter four. 66 of these companies have reported since president obama came in control. i think we have seen a lot of them. costco came out with a $67 special dividend, las vegas sands, dillard's, ethan allen. the big one i am going to keep an eye on for technology especially is apple. $130 billion cash. are they going to issue a special dividend? > > some people want the money now because they think the capital gains rate is going to go from 15 to 20%. so, we will have to see. but it is interesting that some of these people that are spitting out this money, wynn had a $750 special bonus, and sheldon adelson of lvf took in an extra $1.2 billion because he wants the money