. >> tonight, that's mike khouw. he delivers a way to box up the shipper ahead of earnings next week it's time to risk less and make more "options action" starts now. >>> and welcome everybody. let's get the show on the road the countdown to the fed decision next we can there is the countdown, 4 days 20 hours, 28 minutes and 30 seconds. investors want to see if they cut interest rates the second time this year as ongoing trade tensions and concerns about economic slowdowns stoke fears of a potential recession this is bond yield, see a bit of a boost this past week with the 10-year tunk the highest level since july but the chart master is a says there could be a rate route on the horizon. he is at the plasma to break it down carter. >> as is so often the case, markets are ahead of the government both at the stock level and the bond level and rates have moved up in anticipation of things and presumptively maybe already priced in a certain amount of what might be coming here is the yield chart. no judgments or annotatio

don't go chasing mike khouw has a more balanced way to regain good positioning it's time to risk less and make more "options action" starts now. >>> let's get right to it. check out the industrials cranking higher after a summer slump, now up 7% from the august lows and less than 4% from the all-time highs, this despite looming trade and economic slowdown fears, bu with more than half of the sector sitting in correction territory or worse, chart master says the sector may be gearing up for a big break down. carter is at the plasma to break it down. carter. >> all right so this has been one of the areas that has been a hope trade. as they say, when you are hoping, p it is hopeless it is not a thesis it is nothing. in fact, these lines, these charts will prove that this line here is the presidential election. what you see is this big bump up in industrials, and here is the relative performance that's the so-called trump bump. it happened in financials and industrials. what we know is actually that was the peak in the performance, so that actually all of this has been a negative alpha pr

. >> yes and mike khouw says it's over he scripts out the next plot twist. it's time to risk less and make more "options action" starts right now. >> let's get right to it, it's been a sturdy here with the xhp etf tracking the group outperforming the broader markets. look at some of the names leading the space. dr horton. lennar all surging double digits and less than 5% from fresh 52-woke highs. the chart master says one name is building up for an even big are break out. carter head over to the plasma and break it down. >> sure looking at whirlpool not a home builder but related nonetheless. and whirlpool has been a laggard i think that's the opportunity here the five-year chart two lines you can see the divergence lennar, pulte and other names. orange whirlpool basically what you are talking about is no progress for the better part of five years. literally -- not no progress -- bad versus this. now watch. here is the chart. how can we draw the lines? one way we can draw the lines is call this a double bottom you can also call this a fairly big head and sho

the options market is betting if the slide continues, mining stocks might end up in a big hole mike khouw san francisco with the action. hi, mike. >> i was looking at agnico eagle mines. we saw two times the average daily volume the november 50 puts were very active that included the purchase of about 500 of those for $1.20 the buyer of those puts is making a bet that the stock will decline below that $50 strike price by at least the $1.20 they paid that would represent a break-even price of 10% from aem closed today while we did see a little bit of bullish activity in gdx, we saw weekly buyers of the 27.5 calls and there was activity in the gdxj some of that may actually have been just covering some short positions, taking advantage of gold's weakness. i would say gold peaked it looks to me like the first week of september and not much of the flow we've seen expects it to catch up with how the s&p has been performing since then. >> have we seen the peak especially after the dollar index hit a 28-month high. >> the rally in gold as much as we finding on occasion every reason to want to ow

options traders are betting the stock could go even higher let's get the action with mike khouw in san>> reporter: 10% higher or lower on the earnings event. some of the activity was some options traders believe that 10% move will be to the up side. interesting trade we identified was a buyer of the september 6th weekly 1.80 callings paid about 7 bucks and helped finance that trade by selling the september regular 200 calls at about 3 bucks. all in they were spending just under $4 to buy that spread. the idea here is that the near dated calls will appreciate if the stock pops. you would expect it to see 30. that's how they'll expect to see the bullish bet after they announce results. >> pete, you probably saw this action today how do you feel by lulu? >> i'm very bullish. i've owned the stock it was a pitch stock i thought it was terrible. men's, kids, ecommerce those three are the legs that are going to push this higher. they have more exposure to the asian markets as well but a lot less than people would ever know i think there's a lot of growth. >> how do you feel about spandex, pet

let's get to mike khouw with all the options action hey, mike. >> the option markets is implying a move reports earnings. that is pretty much in line with what we would normally expect. we've seen moves of an average of 4% over the last eight quarters there was very heavy volume today. well over three times total options volume on average and saw most in the call side. calls outpace puts by 2-1 and where they were most active were the october 95 calls over 12,000 of those traded for an average price of about 40 cents. normally when we see this kind of activity we're seeing buyers of those calls and those would be bets that the stock is going to raise through that trike by at least a premium they paid but in this case they actually were sellers and i'm getting they were doing that against long stock positions so while this is still a bullish bet it is a much more modestly bullish one because you want stocks to run to your short strikes, not through them so this is basically a bet that is probably not going to break out to new highs but this is usually a position that is put on by people

. >> yes and mike khouw says it's over he scripts out the next plot twist.sk less and make more "options action"

mike versus nike mike khouw ha has what you need to to know to outpace the quarterly report next woke it's time to risk less and make more "options action" starts now. >>> well pharma in focus on wall street as washington lawmakers grapple with the best path forward on drug prices but there is another side of health care that could be head forgive a breakout carter werth at the plasma to break it down. >> i thought we'd look at bristol myers haven't done this stock in a long time it's an opportunity. 30-year chart, two lines you can see the optics and the orange line is bristol mier relevant to peers, the s&p 500 health care sector to some extent bristol meyer undershoets and overshoots the great undershoot, great overshoot. thedy veerjens of late appealing to me and more immediately how it's behaving day to day you have the sector up 50% more than bristol going back 30 years to 1990. let's zero in on this and look at the spread. over the past three years, again sector up 27, bristol meyer down 18 bottom fishing is not good it's usually dangerous but if a stock is starting to reverse

let's get to mike khouw in san francisco. >> they're playing for a short term we saw calls out pacingof the more interesting trades was the september 16th calls. that's what guy was talking about, playing for short term bounds there is some short covering this is a trade that's supposed to do well >> thank you for that. our show is tomorrow at 5:30 p.m. up next is "final trade. 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 too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? 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 >>> it is a huge night for nbc, packers and bears kicking off the 100th season tonight 7:30 eastern time.

poor report op amazon a foreign trade and businesses and options market sounded off on the stock mike khouwsan francisco with the action, mike. >> it wasn't just a bad day for federal express obviously a bad day for people with positions at fedex. i was one of those we saw well over 10 times the average daily options volume today, the most active options were the september 150 puts. expire this coming friday. by early morning about 10,000 of those traded for about 2.25. buyers of the puts were betting the stock would decline below the 150 strike price by the end of the week by the 2.25 they paid it dereked below the 150 strike price later this morning as it got down to 148.5 low as before disclosing at 152.5 i think. i think i took 80% of my fedex options position off today i had the 160, 180 and 2000 strikes on it's advisable for most people with positions in this to reevaluate it. you were saying this is the worst trading day of the year. i think it was the worst one had day earning singles the credit crisis december 2008 when then did the second quarter 2009 results we saw something like

stocks you see the call buyersment taking more shots at the upside process when you look at the mike khouwtrade on your show last week. if you see lululemon dip gloep 200 that's a trade i'd like for get that online. >> brian sutland at chicago with the option i don't want to hear about people's underwear what they are buy and. >> part of the story melissa. >> now but snes right and this is happening the last couple days >> every time it's mentioned >> can we have a proper. >> to tim. >> talk about lululemon in terms of the multiple which is very difficult which is quite stretched. i think a case where people look at the growth of the company priced as a growth stoke usb upgrading the stock from 190 to 215 put in there says it deserves a higher multiple who needs emerging markets and bitcoin when this stock went up from three bucks up to 180 >> i think what's notable about the price action the big up days have had big volume. the stock is still being accumulated here i think the question is can this translate to nike? nike has been sideways since february can they get in on the act? is that

mike khouw is right here in the studio with the action hey, mike. >> hey, there, how are you let's look western digital today backup we saw more than two times as many calls as puts trade what was interesting, the activity i was seeing was the october 11th weekly 62 calls why is this interesting in we do often see weekly calls trade often the week prior to something that's going on. they are going to be reporting earnings on october 24 process this is somebody making a bullish bet we see a rise in western digital up 4% or more prior to earnings. i think that's pretty notable. we could take a quick peek at the cart and look at what we are seeing so we're looking at get above 62 bucks by at least the amount of premium they spent, bearing in mind they expect this to take place within the next two weeks and we're seeing earnings around here obviously they're eyeing short-term moves we also saw some significant call activity in jup juniper. >> dan you are watching micron. >> we talked about the semis earlier in the show. huge intraday rest reversal they report tomorrow after the coalesce imp

mike khouw in san francisco with options axe action. >> lapgs sands very early four times the average mostly the result of one large trade, the january 60 sees somebody played $3.20 for 13,000 representing $1.3 million shares despite the weakness of the buyers of the calls is making a bullish bet. west because we saw this opening trade that it was going to be the 3.20 strike. increase of 8.5% to break even where the stock was at the time of the trade this is something betting on a good bounce after weakness in las vegas sands recently. >> all right, mike, let's trade it what do you guys say. >> you mgm call buying we had las vegas sands mike is talking about ut in hitting mums timespy believe it in it right now and seeing wynn. we have paper in there as well probably overexposed with knows three right now. >> the 60-61 levels is huge. this failed at highs for the better part of the last four mohns. you got to get would have 6 there is a read on hong kong when you process ut it in context of mgm. >> some relief there, right. >> if that's sustainable the stock has to respond. >> i think

. >> in -- and obviously mike khouw -- cohen was indicted on. >> the more that the democrats focus onich is? >> which is health care. which is an economy that's going south. which is the divisive racism, which is a trade war that's destroying farmers. we have a dishonest president. >> they can't do both. >> i know karine, you want to get in. but let's focus on health care and not stormy daniels. >> but i'm sure this process is not happening without nancy pelosi's blessing as well and this is part of the process that the democrats are going through, which is trying to hold this president accountable. i think they should impeach him. that's neither here nor there. it shouldn't be a about the affairs it should be about individual one. someone who is an unindicted co-conspirator, did he break the law? did donald trump break the law to help him get elected. there's a campaign finance violation potentially. so the democrats have a right to -- this is not normal. we can't treat this like this is normal. we're going to get another president. we're going to get another donald trump down the ro