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tv   Options Action  CNBC  April 17, 2016 6:00am-6:31am EDT

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steve, other than making i'm here atme move stuff,rade trader offices. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.
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herthey work hard.ade, wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade.
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subscribers, and that 3 to 4% will cancel the service. netflix shares are down so far. 12 growing assortment of original shows, it has lower prices that monday of its direct to consumer rifle streaming services. the question is whether the originals will it be a must have if it cost a few dollars each month. melissa. >> julia, thank you. dan made it over to the smart
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board. less than average move on monday? >> yeah, that's an interesting situation as you said, mel, long-term average has moved about 13%, the day following each quarter, which is really a massive massive move in either direction. the options market is only implying a 10%. why am i at the smart board here? the question we get asked all the time, how do we figure it out? netflix, there is weekly options. i could look at next friday's expiration, the call premium plus the weekly stradle. it was offered, $12, implied move. over the course of the week, about 11%. so if you isolate just the earnings event coming monday after the close, the one day move is probably about 10% here. you figure out the weekly
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implied move if you do have w k weekly options here. i want to focus on why that implied move may be better than expected, look back when the company reported in january 19th, their q4 results, gabbed down 10%. look what it did. worked the whole way up over the course of the day and basically closed unchanged. options traders got off sides, 14%, the stock ended up being unchanged on the day. obviously it traded down afterwards, but a lot of options traders will work on their positions throughout the course of the day. long premium, you thought it was going to move back in january, you got creamed. that may be one of the reasons why the stock is not implying that much of a move. i want to show you on the chart here, the stock has this run-up over the last week or so, that may be incorporating some of the goose news here. when you this i about the things julia just said, the implied move less than it was last
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quarter and the long-term average, i suspect a lot of the news is in the stock. you could be consolidation and 10% may prove to be high. >> mike, let's go to you. analyst research i've read in the past couple of weeks has been bullish. >> yeah, and you know, i mean, i don't want to seem too skeptical and going back to the high multiples that people have for growth stocks like netflix. one of the things is, whenever they've tried to do something with their business model historically, one of the things that can get into trouble when you start trajing their pricing, that fun fun da mentally seems like a good idea. sure, they're creating content, but people now how you can binge consume content on providers like netflix, and i'm not sure it's enough. i think there is an awful lot of optimism here. i'm not quite as optimistic,
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although i am a subscriber. >> compared to where it's been essentially what charting is, current price against past price, we know from december high 135 to the lows of 80s, so we're sitting here at 110. it might be one of those moment, not a lot happens. i would rather make that bet than a direction bet. >> what's the number thing you're going to listen for in the conference webcast? >> if you look back over the past five years ar, how has it affected folks in a saturated market, and then international ads will be really important. listen, i get it, it's got 12% short interest, it's a cult stock. i don't think you probably buy it after the stock has just rallied about 8, $9, i expect consolidation at the midpoint. >> up next, something curious happened in japan this week and
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has one of our traders scratching his head. if you have a question for one of our traders, send us a tweet, we'll answer it later on in the show. much more "options action" right after this. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.
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herthey work hard.ade, wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade. wyou could just forget frthe beach wedding... and the beach booty... you could just book a different resort. like in alaska. they've got igloos.
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welcome back to "options action." time for call where we take a look back at the trades that haven't gone in our favor. dan thought financials were about tumble. take a listen. >> you need time if you want to make a short on this trade in the bank stocks, look at the xlf, etf, $22 today, september expiration, pay $1.20, those break even. down at 20, 80. >> financials were the best this week, but dan, a lot of time. what do you do? >> that was the point of the trade. we had to give it time. i think we talked about it in the package, expectations were low, companies already talked down q1 numbers here. entry points are hard with trades. options, off he go the to give yourself time. i was not going to trade short dated option where i thought it was low.
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so i still like the trade and i think what's going to be important as we come out of earning season and we get through a lot more reporting, let's see how the stocks trade. >> a lot of the banks faded. the one we've got coming up next was worst. >> okay, well there is quite a tease. >> last week, colin carter made a bullish bet on japan. >> we're close to hovering at well defined lows in a common level an then break those lows. so we want to be short ewg. >> i'm looking simply at the june put spread. this is interesting, because with the underlying, with ewj when i was looking at this, could you pay just over 50 cents, sell the june 11 for 26, 51 cents for the spread. >> this is what carter was referring to.
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the ewj was up 4% this week. mike, what are you doing with the trade? you have time. >> we do have a little bit of time. ewj was up. not up huge. it puts it slightly in the money. you know, i'm ready to hear what carter has to say. this was a tough week. let's face it. to be short any type of risk asset. there was apparently a lot of bad news built in with financials and the whole market has been a buyer ever since those news came out. i'm ready to hear what carter has to say. >> what's interesting about this is the nikkei was up almost twice as much, which you have the currency issue and the market. we don't have that problem, but either way, this is a bludgeoning. now the question is whether we have enough time to say. i don't think it's going go much further. we don't think stocks will go much further, but if you're short-term, take the loss on and move on. >> coming up next, your tweets
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and final call from the options pits. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade. i'm spending too muchs for time hiringnter. and not enough time in my kitchen. (announcer) need to hire fast? go to ziprecruiter.com and post your job to over 100 of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. (announcer) over 400,000 businesses have already used ziprecruiter. and now you can use ziprecruiter for free. go to ziprecruiter.com/offer2
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herthey work hard.ade, wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that.
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td ameritrade. welcome back to "options action." time to get to your tweets here. here is one. what is the best way to play google on earnings. does it make an all time high? >> it doesn't look too different from the microsoft chart. >> that's exactly right. >> really? >> it's implying a $42 move in either direction here. options are pretty fair. to me, i think if you wanted to define your risk and not there, look to call spreads. >> quickly on the charts. >> it's identical, overlay, break out type move to new highs. >> final call, last from the options pit. carter, kick it off. >> google and microsoft, play them both. >> mike? >> i like call spreads in both of those stocks into earnings. >> such love on the desk here in san francisco. >> i miss you, mike.
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no, back to the bank trade really quickly, if they run out of steam next week, let them out. >> it looks like our time has expired. thanks so much for watching. check out the website, cnbc.com. we'll see you back here on monday. "mad money" starts right now. ncg is a paid advertisement for the shark rotator powered lift-away from sharkninja. looking for a better vacuum? talk to someone who owns a shark. they'll tell you the rotator has more suction than the newest $700 dyson cinetic vacuum. >> my shark makes my home cleaner and my job easier. >> announcer: and now the shark goes from upright to powered lift-away to bring superior suction and a powered brush roll where other uprights can't go. >> there's no place dirt can hide from my shark rotator. >> announcer: the powered lift-away is the total transformation of the upright vacuum. it's no wonder americans now choose shark 2 to 1 over dyson. a yeargo

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