a five-day come and meet mike khouw, tony zhang?iano lounge. >> do we have to wear masks. >> royal caribbean for carter worth. i'll do it send us your questions at @"options action" on twitter. shares of pepsi falling flat on the back of the earnings tt'll tell you why one trader is being pepsi might make you money. we're back live at the nasdaq right after this >> announcer: "options action" is sponsored by think or swim by is sponsored by think or swim by td ameritrade. ♪ ♪ ♪ hey, our worker's comp insurance is expiring. should i just renew it? yeah, sure. hey there, small business owner. pie insurance here with some sweet advice to stop you from overpaying on worker's comp. try pie instead and save up to 30%. thirty percent? really? sure! get a quote in 3 minutes at easyaspie.com. that is easy. so, need another reminder? no, i'm good. reminder for what? oh. ho ho, yeah! need worker's comp insurance? get a quote in 3 minutes at easyaspie.com. [ fast-paced drumming ] [ fast-paced drumming ] ♪ ♪ ♪ ♪ ♪ >>> and welco

with us for the next half hour, tony worth, tony zhang and mike khouw. mike, in any way was it historic for the options market >> yeah, anything that's going to be a historic move for equities is going to be a historic move for options on those same equities, and this certainly was one of those cases. we had the vix get almost up to 60 that obviously is a very unusual set of circumstances in a situation like this, you have to ask yourself a couple of things number one, is it overdone number two is there any fundamental rationale for what we're seeing when we go into investment committee meetings, one of the things we're asked to do make a bull case. make a bear case what's your case so let's start with what the bear case is obviously a lot of the coronavirus news we already know that there's another thing we have, which is if the market was reasonably priced before, does that mean it's cheap now the answer to that we got from a couple of banks throughout the course of the week several banks were lowering their growth estimates for earnings in the s&p 500

. >> if you're a pizza lover tony zhang is serving up a slice of tune there is a name he sinks his teeth into time to risk less and make more. "options action" starts right now. >>> all right. welcome. hi, everybody. let's get to it here on a friday energy, of course, it's been lagging the market -- lagging the market for five years. but crude is actually quietly been trying to creep a little higher oil just handed in the best week of the year. not saying a lot, but it did if you're betting a crude comeback could be in the works, carter will head to the plasma and break it down for us >> bottom fishing is dangerous stuff as we know and yet sometimes profitable let's zero in on crude and the an etf that if it works will be lucrative. this is the contract on th imx right now and what's clear is that we have come down to this level repeatedly. and a bit of a breech and we've essentially held if i went to the christmas crude contract, which is one of the more liquid ones, you have the same circumstance. we have come down, and we have held that's not random. whether it's algorithms or charts,

tony sclang zhang is right more "options action," tune in the full show friday 5:30 p.m.up next, your final trades. >> 02134. >> announcer: "options action" sponsored by think or swim by td ameritrade check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪ when i lost my sight, my biggest fear was losing my independence. mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson... to help the blind. it is already working in cities like tokyo. my dream is to help millions more people like me. there's room for more than just the business you came for. whether that's keeping up with what you always do... or training for something you've never done before. that's room for possibility. ♪ >> announcer: final trade sponsored

maybe looking to the federal reserve for help tony zhang looks for what might be happening next. >> i want to take a shift our attention here to the treasurys because we have seen incredible moves the last few days. i think that we can utilize options here to play this what i want to look at is the charts. lets zoom pout and look at 10-year on treasurys what we have seen tlt moved about 40% from the december 2018 lows this happened consistently a couple of times the last decade. every time that's happened we have seen consolidation or pullback after the 40% move. zooming in a little looking at the one-ier chart. tlt is up 15% year to date and it's currently reading overbought if you look at momentum indicators such as rsi. coupled with the fact that there is negative divergence implies high probability of pullback or consolidation in tlt i like the setup because the long-term and short-term charts line up well what's interesting if we look at futures the poshlt probability of a single rate cut in march increase from 11% to 70% in the last week. and if we look at the april cut for two

time to look back at open trades last week tony zhang made a bet on earnings magic from disney. >> ifne of the concerns i have here is i'm looking for upside move fairly quickly normally i'd like to use a call option to place this type of trade. however, if you look at the implied volatility of options for disney it's very high. i'm looking at a simple structure here using a call vertical trading a 135-150 march call vertical paying about $6.90 for the march 135 calls and then collecting about $1.60 on the march 150 calls. >> disney up 2% since then as of now tony trade in the grown. he was kind enough to the sent us a post card from the road he writes i'm in sunny orlando right now. outside of disney world. good for him zpliet despite the stropping broegt time to take profits. cheers from micky and the gang mike, do you agree it's time to get out of this one. >> absolutely. when you have a situation like this where you have a quick pop and gives it back and then some right away, that's an important coup if you had a bullish view you might want to rethink that i think he is very wise.

. >> let's do a five-day, meet mike khouw tony zhang >> do we have to wear our masks?talking about down the road thank you very much, i'll do it. >>> still ahead, we are taking your tweets, your burning questions, @optionsaction. you might get your answer on the air. >>> pepsi falling flat but one of our traders still betting pepsi will make you money. ♪ ♪ ♪ ♪ ♪ but when i started seeing i knew aboutthings,emors. i didn't know what was happening... so i kept it in. he started believing things that weren't true. i knew something was wrong... but i didn't say a word. during the course of their disease around 50% of people with parkinson's may experience hallucinations or delusions. but now, doctors are prescribing nuplazid. the only fda approved medicine... proven to significantly reduce hallucinations and delusions related to parkinson's. don't take nuplazid if you are allergic to its ingredients. nuplazid can increase the risk of death in elderly people with dementia-related psychosis and is not for treating symptoms unrelated to parkinson's disease. nuplazid can cause

options play chief strategist tony zhang here to teach you how it's done. >> lets look at the marketseflects the sentiment currently in the markets. we want to see why options are a smart way to play the current market first of all we see that markets are at full valuation. meaning it's hard to make a case to go long equities from a econominess perspective. also from a technical perspective, we're near overbought conditions. the risk reward metrics to go long equities don't look good. because of fomo, and how strong the equities markets perform we we want to maintain upside exposure but with limited risk and that's options look at what i was looking at spy, out to the april 3rd expiration after in april. these are were at as the 5. 0. many break even exposed yur in the s. y only a 1.5% move to the upside to make money this trade but to understand this what i'm really risking is only 1.7% of the underlying stock price no matter what happens even if the stock drops. now lets look at this on the flipside because of all the reasons i just laid out, there is a concern there is a high risk

portfolio using options where you don't have to sell your stocks options play chief strategist tony zhang at the plasma to break town the simple trade you can do at home. >> so brian like you said markets are down over 4% today after back-to-back 3% declines usually in this environment environment or i rook for long opportunities. but i think things can get worse. i want to lay out the options trade to show you how to protect the portfolio going into this type of sell off first lets zoom out a little here is a one-year chart of the s&p 500. last week a 10% to the 200 day moving average i'll point out technical levels the breakout around 302 we're below the level. 200 day moving average 304 below that level these are bearish opportunities even though typically i look for long opportunities in this particular type of market. now if we look at a 10-day chart we have seen that this line here at 304 is where the markets enter correction territory and today we close at 299. below that level even though intraday we got above it i think this market can continue to move lower. now there is a lot o