and that's exactly what khouw and carter did with their bearish bet on facebook.r thought it might be time to ditch the social media giant. >> i'm a seller of facebook here if you're long and got great gains, take your money off the table. >> announcer: hmm, mike thought. carter's my ride-or-die, but just shorting the stock could lead to social suicide >> ah! >> announcer: so, to make a bearish bet, mike instead sold the april $185 call for $5.75. now to keep all that money, mike needs facebook shares to stay below the $185 strike price. above that, prooffits will trai off, but mike won't see losses until facebook rises above that call by more than the $5.70 he collected or above $190.70 by april expiration but remember, there is a trade-off, because above that $190.70, mike is still subject to infinite losses. >> you have no friends >> announcer: relax! mike has this covered. so, to limit his risk, he then bought the april $195 call for $1.90 and created his bear call spread now, between the $5.70 he collected by selling the lower strike call and the $1.90 he spe

now "options action"s fans all over the world want the know one thing, what will khouw and carter doow ♪ if you be my bodyguard -- >> you might have noticed that carter is not on the desk tonight. he is in utah with his kids for spring break but he did send us a video. >> have a great show. >> hi cnbc. >> high cnbc, that says it it all. facebook, keep selling market not good. great weekend. bye. >> that was carter and his son brewster mike you heard what the chart master said, keep selling facebook >> we are clearly had news we didn't anticipate. worse for facebook than even we anticipated. volatility is higher this is out of money you can roll the trade down at this point. >> brewster, is he like royalty. >> he has fine lineage. >> carter with braxton and brewster >> do you have anything to say about facebook >> i have something to say. >> all right. >> valuation is reasonable advertisers aren't walking away. it's easier to mine fwoin than it is to delete your facebook account. you would push back and say engagement is going the wane maybe. >> do you think it's going to bounce back?

a -- with a new ceo at the helm, mike khouw has something you want to hear. >> options really spikedhen they gapped lower on that news they are still well above average. second thing we are trying to do is capture some of the up side finally we want to avoid some of the risk of further downside after we saw this news come out -- we will look at how the stock behaved, we can actually see what is going on here. as you alluded to, obviously this is when the news took place. stock fell back sharply. now we have recovered a decent bit of what it lost. essentially if you get in and you start buying a stock right here and we get more bad news, we kind of get a sense of where that bad news is going to lead you. so the trade-up i'm looking at here is the 170, 190, 210 call reversals. buy the 190 calls, 790 and take in elevations options premium, telling the 170 puts for 255. and as you can take a look on this chart, that essentially represents where the downside risk is in my view on more bad news, although, i don't expect we're going to get any if you missed the opportunity to buy the stock

has been up 200% in the past year alone, but if you missed the raleighm, relax, because professor khouw's to get in. he's at the plaza with his call to action. hey, mike. >> all right, we'll look at selling a put spread why might we want to look at this number one, selling a put spread is a trade that has limited risk, defined by the two strikes that you're both long and short. secondly, this is a trade where you are collecting premiums, so this is putting time on your side and finally, this depends probably more also on the strikes and expirations you choose, you get a higher probability of profit. so, let's take a quick look here we can see, as melissa was just referring to, the stock has had quite an enormous move so, to get in and start buying the stock right at this level, you can see that it's come a long way awfully quickly so, what goes up could potentially go down. we're going to try to participate to the upside, get time working on our side without taking all of that downside risk specifically what i was looking at was the april $55-$50 put spread you can select by buying the $5

mike khouw in san francisco for us a reminder, we are off on friday check for the khouw show next fridayight had he we need you. >> yeah, well. there is an options newsletter you can sign up for also by the way. >>> still ahead, more autos. phil lebeau is that the auto show. >>>+steve grasso dumping big winners today. what has him kicking them to the curb he will explain when "fast money" returns >> announcer: "options action" is sponsored by think or swim by td ameritrade. this gentleman?for hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking

mike khouw is in florida with more >> reporter: we saw 1 1/2 times the action the early action was atbucks. it traded well today and actually ended up above that on the close. the most active options turned out to be the march 350s, over 10,000 of those trading for just under three bucks. those are best, it's going to be above 353 by the end of this week options traders bullish on this one. >> thanks for that, mike khouw in florida for more "options action," check out the full show, friday 5:30 p.m. eastern time. >>> ahead, shares of stitchfix, one of last year's biggest ipos, sinking after earnings and dropbox one of the many unicorns getting ready to go 're ve and pull the trigger. weli from time square in new york city. much more "fast money" after this well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single

mike khouw in san francisco. >> who is also a stud. >>> for more options action check out the full show on friday 5:30 p.m. eastern time. >>> coming up next, it is the interview that will break the internet and it hasn't even aired yet. one of the hottest cryptocurrencies out there, ripple. b.k. asked him a very pointed question about coin base. >>> stepping up to the plate, there is one under the radar tech stocks that is up 80% in the past year. it's about to take off. 'lhel tell us the name when "fast money" returns. it looki? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. >>> welcome back to "fast money." time for instant replay

we will see mike khouw i think from austin texas, in fact coming up next, final trade. well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. you or joints. something for your heart... but do you take something for your brain. with an ingredient originally found in jellyfish, prevagen is the number one selling brain-health supplement in drug stores nationwide. prevagen. the name to remember. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mo

if you missed the rally, relax professor michael -- mike khouw has a lesson. >> selling a put spreadits risk secondly, this is a trade where you are collecting premiums, it's putting time on your side finally, this depends also more on the strikes and expirations you choose you get a higher probability of profit. let's take a look here we can see as melissa was referring to, the stock had an enormous move. to get from and start buying the stock right at this level you can see it has come a long way awfully quickly. what goes up could potentially go down. we are going to try to participate to the upside get time working on our side without taking all of that downside risk specifically what i was looking at was the april 55-50 put spread you could collect $2 by selling it for $3.50 but the put against it for 1.30. that's how you are limiting your risk that's 40% of the distance fweens these strikes we were talking about earlier if you see an identical catalyst you might want to own options. in this case their next earnings are going to be reported on may 2an. these options expire befor

there are two candidates the copresence and khouw ceo's harvey schwartz and david solomon.estment bank for his entire harre she schwartz, 53, dame through a trade asking sales background to become sfo and has a broader background gary cohn is not a contender it will be interesting to see if the leader of schwartz and solomon stays on and who gets promoted to president. perez and chavez both have a good chance for promotion in that circumstance as do a handful of others there. it's important to stress blank fine goes when he decides. yes, the betting has come in a bit recently, but my sources say nothing has changed in the last couple of months so where we stand today is where we were standing late last year. >> the market reaction was interesting. >> very. >> initially it dove momentarily, almost as if it was an algorithmic trade and bounced back almost no reaction in the stock. >> obviously the stock ended up nisly today it is down relative to the other banks this is a great day for the banks it's definitely bad news if he goes it was worse news the second it hit because p

cap of 775 billion $, so i guess they're thinking that the march is going to happen >> thanks, mike khouwor you. we're off friday for the holidays check out the full show the week tefray up next, final trades. so lionel, what does being able to trade 24/5 mean to you? well, it means i can trade after the market closes. it's true. so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light. ♪ you're not gonna say it are you? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley racing isn't the only thing on my mind. and with godaddy, i'm making my ideas real. when i created my businesses, i needed a way to showcase it. ♪ with godaddy you can get a website to sell online. and it will look good. i made my own way. now it's time to make yours. get sta

mike khouw hen was trying to pay stormy daniels to avoid this ruining donald trump's chances at the whitehat not an open and shut case? >> remember, it is a $700 limit. you still have to disclose to the sec. number one, this is not even a full sec. it is four people at last count. it has to be everyone in agreement to bring the case against it. and the president discussed about shawn edwards. it was found at least in one it was not a campaign contribution. you know who was the person who said that? don mcgahn. he's now in the office of white house counsel. there is an upshot for the president even in otherwise clear-cut case. >> what cohen said, i did it as a personal favor. you're going to have to prove a link. it is not that easy. >> laura, thank you. david, thank you. >> democratic voters turning out in droves in the nation's first primary in texas. is this a harbinger of things to come? you can't predict the market, but through good times and bad at t. rowe price we've helped our investors stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence

>> mike khouw joins us. >> by 3:00 they had outtraded calls 1.5 to one traded more into the close thet active puts at that point were the april 250s. those expire only one month away those were trading for 1.25. 8500 of them traded. those were bearic bets that they could make it below 24873 by only a monday from now that would be a drop of 20%. to answer the previous question, it's definitely priced like a technology company since its enterprise value is significantly higher than gm or ford even they they meet the quotas they ever talked about, those aren't the quotas we are used to it's definitely a technology stock. if the narrative falls apart those puts might come into play. >> pete i know you probably saw that action. did that make you think twice. >> absolutely it does. but i think this is less connected in terms of anything to nervousness about production. mike is calling ate technology company. if we are calling it a technology company and losing some people in the management system that's a problem and it does make me nervous. >> thanks mike. >> where can we learn more about

. >> let's get out the mike khouw in austin texas to break it down >> four times the average daily pute, the most active with a week' spread 10,000 of those trading for a you can about. they were trading higher by the end of the day those are bets that are going to be lower by the end of the week. options premiums are higher than they have been looking for moves on average of 3.5% per day for the next 90. >> a remind he we have off on friday for good friday. >> will they run oa reruns on friday >> still ahead, stacks getting slammed as volatility takes the market by storm. three simple rules to trade these wild swings. we are live at nasdaq market site at times square don't go anywhere, much for "fast money" ahead >> "options action" is sponsored by think or swim by td ameritrade oaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade. when it comes to travel, i sweat the details