an etf portfolio.k to you, melissa. >> all right. thank you, bob. we'll see you later on in the show. many know kevin o'leary from his role on "shark tank" but he's also the chairman of o'share investments and has five etfs of his own. ketch, great to have you here on "fast money." >> wonderful to be here in this wonderful sunny florida weather. >> exactly. much better than snow, right? >> terms of etfs, there's a lot of volatility in the market, and there's some debate as to whether or not etf contributes to that volatility. what's your take? >> i think what we're going through right now is a new generation of etf product. what's so exciting about this conference, they are calling it smart bet a. i call it rule-based. got to remember the first generation of etfs were index trackers so someone like me who has a covenant in his family trust that doesn't allow me to owe more than 5% than anyone named can't use inddeese because names like apple end up being 10%, 11%, 12%. i can't own more than 5%, want 20

etfs, pro share active.nse is to that announcement and will that affect your business at all? >> there is two things going on now. one is the suitability issue, more focused on advisers and broker dealers and how they make sure that the things that their clients are holding are suitable, appropriate for their investment strategy. and that's one issue and of course we think there is nothing wrong with making sure that investments are suitable. clients should know what they own, why they own them and monitor their continued relevance for the portfolio. the other piece that i'm sure you're also aware of is the s.e.c. looking at the usage of derivatives in etfs. >> and talking about restricting the amount of leverage you may be able to have. instead of three times leverage or three times inverse, maybe won't be able to do that. is that going to affect your business model. >> we're looking at the proposal as it is. it can change over time. but as it is currently proposed, we see a lot of comfort in our ability to

inside etfs, the popular investments causing shakeup. why so many top executives are flying away from that firm and whether shares which are sinking again can ever recover. we begin with the markets. stocks coming off their first positive week of the year. oil coming off its best week since the summer. that's where we stand now. it is red across the board. turn your attention to the far right of the screen. that remains the story. crude oil down 5%, joe, giving back gains we got last week. are you sticking to your call that last wednesday, around this very time, was the bottom in stocks and crude? >> short-term bottom, yes. and i am sticking to that. about 1:30 in the morning, a call comes out with news regarding not pulling back on cap ex that sends crude lower. a pullback in oil. i think there is a tradeable rebut coming. i think you're going to have where you've had absolutely no tail winds, the federal reserve is going to give some tail winds this week. i think the buybacks returning in early february gives you some tail winds. we're

many investors will be using etf to hedge themselves. our etf analyst joins us. everyone to check out eric's piece which talks about the enormous market for options tied to etf's. let's just touch on that. the options market volume is usually accounted for by etf's. it was amazing for me to read this. eric: you look for five years ago, they are double where they were. here is a step most representative. eds account for 30% for equity trading everyday. they account 70% of equity options trading. is theeason for that -- it haseason is become such a beast in the options market and used as a catchall. advisors and institutions, they and boom, michael -- my whole portfolio is protected. it is like a snowball rolling downhill. they can come in anonymous, no impact cost. gigantic institutions start using them as well. julie: interesting. it is so straightforward. there is also the idea of buying options on relatively -- volatility.. eric: even though they are equities, they are pulling in from these other markets that are not equities. we hear people talking about buyin

not a specific etf event. what i mean by that is you look at regulation that came in 2005, basically, you know, they set in a lot of the circuit breaker infrastructure we have. you have the flash crash of 2010 and modification there's. but what we found in august is this legacy of a decade of different types of regulation. ten years ago etfs were much smaller. we're basically putting in shock absorbers for future stocks. and in some ways this market infrastructure is potentially impeding price discovery of the etfs. this is where i think a lot of experts both at the regulatory level as well as exchange level and clearly etf providers, we want to goat a much more responsible environment for investors. >> etfs are not just a tool for investors but hedge funds and institutions cho trade much more frequently than individual investors. whether the cause of what happened during flash crash was from market structure or the etf in and of itself, can you tell investors right now that that won't happen again? >> you can

, they led the etf's.de the case for investment for a long time. when this company specific story in the fundamentals come at a question about how is a going to find its revenue and apple continue to have strong growth, all these specific company problems. the question is who is going to lead and pick up the slack? . that's a big question. scarlet: thank you so much. oliver covers the markets and bloomberg news. the latest read on the u.s. economy shows just a sputtering growth was at the end of last year. we will break down the gdp number and what this could mean for with the fed does next. ♪ from bloomberg world headquarters in new york, welcome back to "bloomberg markets." i am scarlet fu. mark crumpton has news for managed desk. ark: health officials are trying to determine how the olympics could be affected by virus.ead of the zika more than half a million people from around the world are expected to attend the summer games in august. virus has been found in at least 24 countries. the world health org

so -- >> there's a difference in the difference from the price, etf price and what's inside the etf.> at times, there may be, but that's part of the price discovery. i'm not suggesting there's not variances at any moment of time. >> right. >> but in many cases, first of all, those were buying selling etfs every day are not as worried about plus and minus and valuation, but looking to reduce or increase exposure to the product. >> right. >> the investors looking to invest in exposure over a long cycle, they are not the oning buyi ining and selling. >> there's a closz ass of inves who have the traditional mutual fund with an etf. rather than waiting until the end of the day, if you will -- >> much more risky because you have no idea. i mean, if you are worried -- >> which is riskier? >> well, i believe a mutual fund is presents more risk than an etf because you have until -- you have the aggregation, no idea when you buy or sell, wait until after 4:00 and there's a liquidation or purchasing. all my conversation with regulators, when they focus on liquidity risk and the common period, a

do e etfs cause this. >> no.me of the new rules in terms of market circuit breakers and so forth. th while well intentioned they need to work on defining them. >> you think it is about market structure. etfs don't cause volatility that was in effect. >> absolutely. what we saw was the may crow economic events in china really drove the volatility. >> speaking of the s.e.c. there's the suitability about it for investors overall. what's your position on etfs and various classes of etfs and how suitable they are? >> look. i'm actually glad the s.e.c. is looking at this. i think the product proliferation has reached levels and some of these more esoteric ones may not be suitable. i'm particularly not a fan. i think leverage is actually -- it's a great when it's working but when it doesn't, it absolutely wipes people out and they don't expect it. >> what about active management? most of us have watched the etf business grow up tied to index business. now the whole business is coming into the etf space and saying we can

etf liquidity is strong. etfs traded well.re has not been any real selloff in the equity market as seen in august, although, the mark has gone down, but it's been orderly. >> you were ringing the bell, sounding the alarm before? >> i think the alarm is appropriate, but we need a warning label. understand the risk of etfs, and there can be disconnects between the underlying price and etf and that's really dangerous when it happens and hard to predict, but it generally comes in a market when sellers get a little rattled, and they accelerate the sell orders, and when that occurs, and you hit disconnect in the market, seen in august, etfs become incredibly experiencive. >> we talked this morning a number of big banks putting sell orders on the market across the board telling investors to get out. what are you saying? >> i would not tell investors to get out of the market. i think that's a little hyperbolic. i do think that there is higher risk in the markets today. i wouldn't be adding risk in my positions today. i would be watchi

to the etf business?> yes. >> that's a useful number. jim ross, if there is any change in the liquidity problem or issues, let us know. we'll be giving you a call on that. thanks very much. >> guys we're here all day at the etf.com conference. >> we have got a decent rally on the street right now. even with today's gains, the dow is still down more than 1200 points so far this year. check out some of the most widely held stocks. alphabet, apple, microsoft, jp morgan. three are up. google is down. "power lunch" will be right back. you both have a perfect driving record. >>perfect. no tickets. no accidents... >>that is until one of you clips a food truck, ruining your perfect record. >>yup... now, you would think your insurance company would cut you some slack, right? >>no. your insurance rates go through the roof. your perfect record doesn't get you anything. >>anything. perfect! for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an a

. >>> exchange rated funds better known as etf have grown in popularity that some consider them their own asset class. the biggest and brightest are gathering to explore in topics. bob has more from hollywood, florida. >> market volatility was the hot topic at the eft.com conference. >> we're telling investors that this volatility may be with us for a while, but it's very important to stay diversified, keep a long term perspective and behavior is reenforcing that. >> three other hot topics here, smart data. gold man sach's made a big splash last year with three etfs.man sach's made a big splah last year with three etfs. the big question is do they really out perform market cap weighted indices? the jury is still out on that. so much money is coming in it's attracted the money crowd. the industry is split on this. half say who needs them. we don't need them. the other half says there's plenty of room for other investment style. is the sec going to tighten regulation. they announced they will would be looking into the suitable of investors like leverage. they're also looking at limiting

i love etfs. they're low cost and efficient. 50 of them pay dividends, all first generation.n other words, market cap rated. apple could be 15% of what you own. that breaks my number one rule about diversification. i only want to own 5% of any one name. so i went to ftse russell guys and said help me. i have a problem. help me build a new indices rules based that looks like volatility, quality of cash flow and keeps it 5% on a max. 20% max on a sector. they said no one has done that yet. we'll do it for you. i'm very proud of you jim. >> you should be. a lot of people have to recognize some stocks go up so much they become a big part of a portfolio. but what you have done is set rules up ahead. >> yeah. >> because when apple for example, i used to own apple and in september china had all of that cash with our crazy tax system. they issue bonds and move the cash back. that tripped one of our covenants and we sold it, thank goodness and picked up microsoft instead. that really helped. >> absolutely. microsoft bottomed right when china bought them. >> a nice dividend yield there

the prize etf that you should be picking right now.ght back ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ then, a brutal act of teterror here at home.. it's time for a tested and proven leader who won't try to contain isis. jeb bush has a plan... to destroy them. and keep america safe. jeb bush: the united states should not delay in leading a global coalition to take out isis with overwhelming force. announcer: tested and proven leadership matters. jeb bush. right to rise usa is responsible for the content of this message. liz: okay. with just a few minutes left, we are slightly off the session highs but still up 370 points. even with today's move, though, the dow is still on track for its worst month since august. but what important factors and which important stock plays should you be watching for next week? can the markets turn around in 2016? joining me now tom etf trends.com and moody's chief economist job. i want to cause this surprise me tf because that's your expertise and we're looking at exactly what we

also corporate bond etfs. you could look at closed end bond funds.he market is serving up a little bit of discount out there. >> dom, i don't want to pile on a tough tape, but there's 17 stocks in the s&p 500 that are higher right now. that's it. and when i look at the list of the best performing stocks today, wynn, chipotle, mosaic, game stop. these are some of the worst performers over the past year. it smells like, and again i hate to be some sort of a half empty sullivan, but it smells like a very low-quality move up. any stocks that are up have kind of like been the dogs. >> and you bring up an interesting point and we've been talking about this idea there's a sliver, and a very small sliver in the market that's doing well. most of them are companies like you said that have been beaten up really badly. even year-to-date and more so for many of them over the course of the past 12 months. retailers, you take a look at macy's, having a green day today. also tiffany, best buy, these are some of the stocks that have taken the biggest beating. short c

, which is a very -- on leveraged etf's. has proposed these regulations that would curtail some of the leverage on these etf's. why was the investor education not enough? >> i think the question really is, there is a difference between disclosing risks and having people understand what the risks are, informed consent versus the disclosure. that is a difficult balance and it goes back to the question of, for an individual that does not have any particular experience, what kinds of information are they able to process from the disclosure documents. long andhose are very formalistic, in addition to dealing with complicated issues. brendan: so there are two issues, county party risks. believe investors are aware of the counterparty risks? >> there seems to be some evidence they are not. important in the european regulatory system then here, but it is the same issue. the other is this question about liquidity, the promise that you can sell your security, you can sell your etf shares. andcan always sell them, the question is, do i

it was down some of the -- of the etfs in general.just seemed like, wow, they can't go down that much more even though some are big momentum names. i think it is over for now, in the biotech selloff. >>> still ahead, some of the biggest tech ipos in the last year are trading below the ipo price. will it mean less companies are willing to take the public plunge? we have the details next. much more "fast money" still ahead, so don't move. iall across the state belthe economy is growing,day. with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating next generation technologies. let us help grow your company's tomorrow, today at business.ny.gov >>> 2016 setting up to be the worst january ever for stocks. but it has been specially difficult for struggling tech companies that have recently gone public. josh lipton taking a look at the names that have struggled so much.

so there's an etf for this. there's a high beta etf that's down 3.5% today. that's the power shares. and there's a low volatility etf. you see how little that's down? only 0.8%. this has been happening all year. what do i mean when i say high beta? i'm talking about -- melissa just mentioned it. i'm talking about biotech stocks, for example, high beta stocks, oil and gas exploration. that's the xop. that's high beta. regional banks, the kre. that's a high beta stock. transports, any of the iyt is one of the etfs for the transports. these tend to bounce around a lot on an intraday basis. we're seeing that. look what's been going on for this year. low volatility names, these are a lot of consumer names, only down 3.6%. those high beta names i just showed you, they're down 13%. so there's a very clear pattern here, melissa, that's going on here. they are taking down the names that had some of the biggest moves last year. melissa? >> bob, in terms of the low volatility/high volatility, is that relative? does that get reshuffled constantly if it's found that one o

look at what the bond etf did during the financial crisis, during the 2011, 2012 sovereign debt crisis. it is making higher highs and higher lows. that is an uptrend, people. and it is my belief the fed will not raise rates again any time soon. you could use the tlt options in particular as a tactical hedge against the portfolio of large cap u.s. stocks that you own. and there is a big, big reason for this. is that if you did get one of those spikes, to me, i think you have the opportunity to stay in some of your stocks but have exposure to something that people will flock to. so the trade simply today, when the etf, the tlt was 125, you could look out to april expiration, there is a fed meeting after expiration but the probability of a rate hike in april has gotten cloberred over the last few weeks and the april sell put at the etf of 125 and use the proceeds to buy the april 130 call for $1.70 and that cost you nothing, between 120 and 130 on april expiration you don't lose and you have a playout to the upside if you have a false spike. and i want to make one quick point. the tlt is

inual fund and etf investors the u.s. billion in chinese equities as of the end of 2015. scarlet: with this week's chaos leading to circuit breakers, what does this mean for the individual investor? carol massar is a bloomberg radio with more. carol: we want to talk more about what is happening in china. as you said, a crazy week. peggy collins has been looking at this, she is our personal finance reporter. opening up myf 401(k), but let's talk about individual exposure to what is going on in china. peggy: i was asking brian reed, .he chief economist at ici essentially, he was saying, take a breath. when you look at the data, in terms of u.s. investors in mutual funds and etf's, their exposure to chinese equities is really small. there is about $144 billion in u.s. mutual funds and etf's in chinese equities and that is a small slice of the overall mutual fund market. carol: these are homegrown companies we are talking about. is $15right, the size trillion. that is a small slice. the bigger issue that people are talking ab

show the xle, which is the energy etf, the largest energy etf out there. that's been moving down in the last 15 or 20 minutes. that's why the markets have taken another leg to the downside. it's the energy stocks that are down. they previously were somewhat supportive. elsewhere, they're having a down day, particularly weakness in automative stocks, volkswagen, bmw, daimler. they all have 10% to 20% of their revenues over in china. ford and gm do not. they have very small percentages of their revenues in china. 4% to 5% for ford. they're not down nearly as much as their counterparts over in europe. as for the financials, this is one of those days it really doesn't matter whether you're dealing with a big money center bank like jpmorgan or even a trust bank like bny mellon. they're all week here today. what you want to watch is the china etfs. fxi is the hong kong etf. trading in hong kong. the shares that trade in mainland china, for that, you need the ashr, that's the main index on the mainland, and that's down 9%. this seems to indicate traders are betti

you see it in the etf holdings within increase in to rooms of demand.t's probably the best start to a year in many years. people have not used to go because stocks and bonds have performed well the last couple of years. mark: let's talk about the fundamentals. what does demand from the likes of china and india and central-bank demand telling us now? it's a very strong. can you record highs both china and india and central banks are net buyers again. they are some of the biggest net buyers and they are buying more every month. they are rebalancing their folios and they are a bit overweight in currencies including the dollar and diversifying into gold. that seems to be at the gold markets. highhinese demand is very we are at 60 metric tons per week on the shanghai gold exchange. you think given the crisis in china that that may increase. gold is a huge of the chinese culture. in gold and save don't see it as a speculative commodity. they see it as a form of money. we believe there is quite a floor under the eyes and level of demand. mark: what's the best

with at least $500 million and could not be a leveraged etf. so check out the gold etf jumping a percent as global worries shake the gold market hitting a seven-week high. so finally a safe haven bid. guy, do you buy that? >> i don't know about a safe haven. if people are looking at gold instead of a commodities, they are starting to view it as a currency. i never thought of it as a commodities. there is no end use to gold other than the beautiful earrings that you are wearing right now. and that is few and far between. >> and teeth grills. >> going back to patterson dental. >> but seemingly, it is insolated from the dollar move which i think is interesting. we held levels that we talked about before where india bought 100 tons of gold from the imf. i think the trade is higher. and so i'm staying with this one and the gdx. >> still ahead, one of the largest shape makers is the chip inside of the top names in tech from smart watches to smart cars. the ceo gives us his take on demand in the space after this break. >>> plus marissa mayer under fir

financial sectors, spider etf. to help minimize stock risk to why invest in a financial stock when you could invest in the entire sector of s&p 500. read it carefully and visit us on the web. >> you can join millions of americans we are available online. world. your iphone or android. do it today and find out why millions are tuning in. for real news, better talk. >> sponsored in part by morgan stanley, where capital creates change. >> i took an interest in helping a gentleman by the name of chris kyle, who wrote the book, the american sniper. became a fantastic movie directed by clint eastwood. tell us a little bit about chris kyle and your experiences with him? kyle: i met him through enter a more disciplined and extreme workout regimen. i went out to the west coast and did this program with mark , the reserve commander for seal team three. chris was with seal team three . i got to know a few of the guys while i was out there. mark called me one day and said hey, there is a guy you need to meet who wants to go ba

the industrial export driven etfs were down. where you've invested have determined your results and we love this domestic consumption story. we think it's early innings. >> kweb is primarily e-commerce. we're looking at it right now. you sort of want to go to the e-commerce side. you want to overweight the apples and nikes of the world and underweight the caterpill s caterpillars. that's the way to play the consumer in china? >> very much so. part of china does face the headwind of tepid global growth. part of china is doing very well. >> on the currency, we're all watching what's happening with the yuan and certainly last august with the devaluation that sort of started off all that panic selling here. what do you expect to happen there? >> the great thing about the k-web names is they're u.s. dollar denominated. the weakness in the euro and the yen is what's causing it to devalue a little bit. >> thank you so much for that, bob as well. >> thank you. >> in the meantime, tyler, over to you. >> thank you very much. we're of cour

can't be a leveraged etf.o we're looking at the iyt, which is the transportation etf tumbling to a two-year low in today's session. and jonathan was talking about the russell 2000 as an indicator. this is an ultimate theory. >> we've talked about the dow. and if you are looking at the companies that make up the transport index, they are telling you bad things about the u.s. and the global economy for more than a year now and that is reflected in the price. for me, this is not an area to come in and press the short. i think it is a dangerous position. this is the epicenter for the weakness over the last month or so. then it drills down to let's find good companies within there. but to me, the problem you have is all of the companies in the area should be beneficiaries of lower oil and they haven't benefited so there is story telling over the last year that has not translated well for equity investors. >> well the problem with the beneficiary is that the rails have shipped a lot of oil. it is almost off-set. and

the volume in the options market is on etf's, a lot of it on the spy.have another trade on the xlp, consumer staples. you are thinking defensive, what is going on? dan: right now we are seeing a pretty good wash out in the market. going to the 1880, testing the lows from last year. you have another three and a half percent. xlp has been an outperform her. outperformed the s&p, and i will continue to be the case into 2016. basically, i want to get paid to rent the stock as i wait for a better entry point lower. if it spikes higher in the market reverses, i want to be able to participate on the upside, so i'm looking at a risk reversal on the xlp. julie: so how does it work? ,an: selling the march 48 put buying the 38 call. cant trades below 48, you get long. if it goes above 51, you get to participate on the upside. it buys you sometime as the market figures out where it is headed. i don't mind picking this up at 3.5% discount. dan deming, thank you, have a fantastic weekend. staples,bout consumer defensive in the market. ♪ betty: from bloomberg world he

it's one of the big etfs that track china. when that happens, johnson & johnson, wal-mart, mcdonald's, procter & gamble, and coca-cola, yes, they do tend to lose value, but not as much as other dow components, so these five may be some relative safe haven plays in the dow jones industrial average. of course, it's just part of the story. the full story, including which ones do the worst up on cnbc.com/pro right now. subscribers can get that whole story on our website. back over to you. >> that's called a tease. thank you very much, dom chu. >>> when we come back, we're looking at 1% losses across the board. nasdaq being punished today. we're back in just a moment. >>> obviously, the broad-based selling continues. we do have some retail movers. wal-mart the top gainer on the down. macy's higher after announcing that restructuring last night. retail names year to date short on time span, obviously. but a lot of retailers are at the top. names like kohl's, for instance. >> but then you see companies like macy's, where talk of cost

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the least risky way is etf called the spider gold shares. most people know it, gld, owning the metal itself and tracks price. some of the dealers i deal with, listen, doesn't always track it, but you can potentially call your broker and buy the physical bars of gold. the cubes like in my soup, but it makes sense for those with lots of money, afford to buy in bulk, and pay to store it in a bank. you can't keep it at home. what about the gold miners? pick the right company, low cost, growing production, it outperforms the commodity for a period of time. it's note going to trade in lock step with the commodity, and what makes gold valuable here, of the ground cheaply, and there's not a lot of new mines, illous. it can be screwed up by debt, mining costs, management teams that make mistakes all too well. virtually every single time i they have shut downs at mines, startup issues, delays, and every time, things go wrong. the stocks are hammered even if gold goes up in value. i give up in the entire group and just stick with the gld or the fiscal

hollywood, florida, for the largest etf conference in the world. we'll give you an inside look into the top minds in the industry, live on monday, at 5:00 p.m. eastern on cnbc. ♪ the weather outside is frightful. >>> welcome back to "fast money." that is the white house. a snowy one at that. lots and lots of flakes are falling in d.c. and there are plenty more to come. let's go to cnbc brian moore on the ground in the nation's capital with the details. brn? >> well, scott, not on the ground. on the snow that is on the ground. and it is just piling up. this is really just the beginning of an onslaught that will last for the next 36 hours. we're expecting more than two feet of snow before it is all said and done with. a storm that could rival the 1922 record-setter, the infamous nicker balker storm which deluged the nation's capital. let me give you a perspective. the other night we got 1.8 inches of snow and it crippled the capital. people were stuck in cars for hours. hopefully people are heeding the warnings right now. there are snowplows out on t

. >> largest trade in the options market was emerging market etf. 2/3 of holdings within that etf are-related here. there was a big roll down and out when etf was around 3020. they were rolling them down to the $25 strike in june. that's $6.2 million in premium. that breaks even on june expiration down to $24.20. down about 20%. i suspect going that far out of the money, this is likely a hedge against emerging market portfolio. here is the one-year chart of eem. we see what's going on here. it broke today. a new closing low below that august low. august 24th here. this is the big one. this is the ten-year chart here. there is not a whole heck of a lot of support below $30. that's where it closed below here. $25 is kind of your next level of support here. the way i see this, if you want to make a bearish bet, you wouldn't look to june or 20% out of the money. it could be a decent hedge against emerging market part folio stocks. >> in a world where emerging markets falls apart, is there a point at which u.s. stocks become a safe haven, so therefore, relatively outperforms? >> yes, but i

the spider, the s&p 500, etf versus the iwm, which is the i shares russell 2000 etf.he under performance of small caps continues. it's going to be another place to watch for trends developing or reversing, john. back to you. >> we'll definitely be watching for that. thanks. >>> winter storm jonas hitting the east coast today. washington is right in the eye of what's expected to be a record breaking blizzard. our hampton pearson is at reagan national airport where the cancellations have already started. hey, hampton. another nearly 2700 flights already announced as canceled for tomorrow. that in flight aware.com, which also is famous for what it calls misery map, which keeps tabs on activities at the major hubs all across the country. again, not much activity going on at all. at the charlotte hub coming north, of course, along the atlantic seaboard, we are here at reagan national airport where overall the activity is much less than a normal day. it feels more like a saturday. most of the people here are getting on planes and expect to get out of here ahead of the storm

you can look to sell put april 120 put, that was etf was 125 and use proceeds to buy april 130 call for $1.70. that costs you nothing, between $1.20 and $1.30 on april exploration you don't make more lose. you have sort of asymmetric playout on the upside. i want to make one really quick point. tlt is not going to crash lower in this environment. that's the thing you don't have idiosyncratic risk. >> that's why a risk reversal rather than simply buying an outright call, which would be a natural inclination. you would think treasuries would be safe, volatility higher raises options risk, sharply higher risk-free rates in this environment is essentially zero, which is the reason selling 120 put in particular no chance we'll drop below that level now and that april meeting and expire before that. this is definitely i think an intelligent way to take a hedge position and take advantage of the fact some of those downside puts will be good. >> some of the catalysts for next week. all the market turmoil headed into the heart of earning season. traders see stocks with big move. seema modi back

what about a real estate investor trust or tangler factory outlet, or just an etf. the point, though, is that in times of international turmoil, this plot should be filled by something all domestic. in times of domestic turmoil where the rest of the world is in better shape, which is where we were in the financial crisis, for example, then you do want to own a foreign company. bottom line, always own a stock that's from a safe geography. sometimes that means a foreign company. sometimes it means domestic security, all-american, depending on the outlook, and at least for the foreseeable future. we're back after the break.ak.york apartment, but the rent is outrageous. good thing geico offers affordable renters insurance. with great coverage it protects my personal belongings should they get damaged, stolen or destroyed. [doorbell] uh, excuse me. delivery. hey. lo mein, szechwan chicken, chopsticks, soy sauce and you got some fortune cookies. ah, these small new york apartments... protect your belongings. let geico help you with renters insurance. i'm here at my house,

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i think the market is very brittle because of high frequency trading, etfs, a lot of momentum investors. i don't think there is going to be any painful back door. >> bill joins us on the "fast" line now. you sounded accurate then. what do you think after the selloff? is there more to go? >> yeah, you managed to pick a good sound bite when i sounded smart. i think, yes, in all seriousness, yes, i think there is much more to go. the exact path, we can debate. because none of us know. my real fear is that there is going to be a dislocation. i thought that for sometime for the reasons that you just reprized. >> what does that mean for the new viewer to cnbc, what is a dislocation? >> it means all of a sudden the market breaks hard and fast. that 5% in a day. 10% in three days. so far what we've had in the s&p this year has been kind of a rolling dislocation. i mean, the market has broken down substantially at a time of the year when the market goes up because of money flowing in. and in china, last summer, or last spring, they had a -- kind of like a crash, over a group of days. so i think

the trade simply today, when the etf and tlt was 125. you look out to april exploration, there's a fed meeting after expiration, but the probability of a fed hike in april has gotten clobbered. you can sell put at 1.70 when it was at 1.25 and unise the proceeds. between 1.20 earn 1.30, you don't make or lose and you have a sort of asymmetric playoff if you have -- i want to make one really quick point. the tlt will not crash lower in this environment. you do not have the risk as you would in a single stock or maybe -- >> that's why doing a risk reversal rather than simply buying an outright call which would be a natural inclination, you would think treasuries wore a safe haven but volatility is higher and raises options premium. the risk of seeing risk free rates in this environment is essentially zero, which is the reason selling the 1.20 put in particular, there's almost no chance we'll drop below that level between now and april meeting and it's going to expire right before that. this is definitely an intelligent way to try to take a

anna: there are reports that you're looking at etf's. ion't know -- don't know where that story came from. somebody big banks can't make money out of etf's. we are of the view that we cannot either. manus: for we let you go, we need to know two things. ustouched on it, give it to again a bit more clarity. martin: everyone misses india which is growing nicely. it has great companies. india would be my big call in emerging markets. anna: modi delivering? martin: i think it is like when obama came into power. it was too difficult to deliver in a country the size of india. i think he is doing all of the right things slower than people want. manus: thank you so much for your time. martin gilbert, the ceo of aberdeen asset management. again tona steps and save the currency. we are live in beijing. the markets looking a little more stable over in asia. japan was out, playing catch-up today. chinese markets looking better than it did yesterday. manus: oil down 3%. ♪ manus: bears beware. china steps up yuan intervention. currency is destined to f

and we're taking a look at an etf with a 1% move in either direction.h assets of at least $500 million and can't be a levered. and we're looking at the biotech, down 3% in today's session. rapidly approaching the august flash crash low here. celgene, one of the biggest components of ibb and that brought the sector down on the 2016 guidance which is lighter than what analysts were expecting itio expecting. >> here is the bring. great m&a. so great growth environment and the company is able to borrow cheaply and make acquisition. so here is the thing, i think it is over and done. the deal announced with shire was in the making for a while here. i suspect in volatile markets we won't see a whole heck of a lot more of acquisitions at this stage of the game. people are looking at the valuations, we've talked about it on the desk, celgene has great growth. if you assume that forward estimates work. but now it is trading at 20 some times earnings. so i think when you said it earlier, people hit the register on things that worked out well in uncertain times. so