options premiums have essentially exploded right now we are seeing the two-month option premium in kweb has 40% implied volatility it is a move away from mean volatility what that does is present a very asymmetric risk-reward relationship if we want to try to play it with a bounce for options. lets aassume that that $45 level we were seeing earlier is a level off which it not only bounced, but may bounce again in the event we see further weakness i was looking at this earlier today. i noticed you could put up a 10% call spread risk reversal for even money in december with kweb i could sell 10% out of the money, december 45 put, buy the call for about $4 and sell the 55 call for about $2. effectively it means i have a buffer down to the $45 level where i am not going to lose any money at expiration if it gets to that. but essentially i will own it as a 10% discount where it is currently traded on the upside i have full participation meaning between now and december i have a possibility of a 10% return. so i have immediate participation, up 10% and no participation down 10% that whole sit

you are taking a look at the china ticker kweb. tim, do you think the worst could be over for the trade? >> you need some levels before these levels to say you have broken the down trend on alibaba. probably 186 which is the 100 day. i have seen some downgrade their targets on alibaba, but that is not the story. what's interesting about the kweb, arguably as an on line gamer and company that not only creates computer games, but is in the eye of the storm. this has broken the down trend it tells you a change in character. we have never questioned the importance of these companies globally, certainly at home. some of them are being given more grown lights. jd over baba because they are not as big of a megathreat >> i hate to use the term spring loaded because it is ready to be fired upon me, but i think earnings tomorrow looks interesting. i think they took too much out of it too fast i think all the china news is in that stock plus some i think you could see las vegas sandy rally on earnings. >>> we asked 20 top strategists how they

why this you've seen buying in kweb do you think those stocks have bottomed, though >> it's impossible of us to know and we always talk about following the smart money. when we see trades come in, scott into names like baba and the etfs themselves and it's jumped into baba of late and kweb is another one of those and assure is another one of those with etfs based in china and then the fxi which has a dom nation of the very large names i think that gives you -- at least gives me the trigger to say maybe we're at an area where we've got a little bit of upside for a while and by the way, they're sizeable trades and going out to november and buying more time than we had been seeing and these are not just weekly calls and not just two weeks out and they're going out to november and sometimes december, so they're looking for these chinese stocks to make a move to the upside i don't disagree with that they've been hammered and we all know that, but i think when we start to see, like you said, with the trifecta of three, big, huge types of etfs like this, it's got to pull you in. it's pulled m

our first viewer asks, the bottom formation in kweb flacked on the show a few weeks ago seems to be morphingi take the loss or do the traders still like it to test the 150 day? carter, what do you think? >> this is something that is very much in the process of bottoming. we know in two weeks it went up 22% and now is down 12%. giving half of the move back but the bottom is well formed forming. stick with the trade >>> time for the final call. last word, carter to you >> earnings next week, amgen and marriott long. >> nadine? >> i want to sell a put and i want to sell a call and keep my mastercard and get a little more off side. >>> michael khouw? >> amgen i think we like call spreads here to take advantage of the stock that the stock has gotten cheap >> we'll see you next friday for more oa. mad money starts now (tranquil ambient music) - things that you didn't really pay attention to, you notice a lot now just as far as how much things that you touch throughout the day. - you never know what you're touching, you don't know who's been around you, you don't know where they have been. - you kn

one of the big etfs, kweb still up a percent to put things in perspective, if you take a look at the period we've seen in the last year that particular etf that attracts chinese internet stocks is down roughly 50% plus from where we've seen it over the course of the year just in a year-to-date period. a little perspective there on southeast bounces that we've seen with regard to these chinese internet names they still got a long way to go to get back where they were earlier this year. >> certainly quite a decline there. thanks so much for filling us in there. we want to bring you in now allow. thank you for joining us curious for you thoughts on what dom just laid out. what are the opportunities you see now in the nasdaq? >> well, i think, first of all, thanks for having me it's a plea sure to be here. there's so many inputs that the market is trying to grapple with all these macros we're looking at the debate on whether or not the inflationary pressures we're seeing are transitory as has been laid out by most of the heads of the government agencies. or if we truly are going see some