To buy, you may want to wait until after they report. Well explain. And a big Event Next Week could send one of these stocks surging. Well tell you which one and what it means for the biotech space. Its time to risk less and make more the action begins right now. Lets get right to it because the big banks officially kick off earnings season next week and the Options Market is implying big moving. Wells fargo and pnc could see a 3 jolt in either direction. A 2 move for jpmorgan and 2 for black rom. Financials one of the best performing sectors over the last year, 21 . How should you play the names into earnings . Get right to it and to the chart master carter at the plaza ready to go. Carter reporter its true as a sector, financials are pacing the market up a bit more. Interesting, its so dependent on names like american express, Big Insurance Companies like travelers. If you look at the banks, the banks themselves have trailed the market and regional banks really trailed look at a few charts i dont like banks here. Well end up with jpmorgan here we have the bkx index dominated by big names, citi, jpmorgan, so forth, by all accounts youd call this a nice up trend it is. The question, is it outperforming the market an opportunity i would have you look at, then, longer term. Heres that trend line and heres, again, new highs over the past two years. Keep that on your retina, so to speak and lets go on to some relative charts. Now, we have a twopanel chart that same bk index over the past two years. The important part since the election, again, up, relative performance thats what matters. You could have avoided this. And apple bought bitcoin meaning choice matters underperforming. Im not sure i see anything that will change that keep going so heres jpmorgan now, the key here is, yes. Its making new highs. But look whats happening relative so if i add a line right here, this is going to tell you exactly what i think the issue is yes, its gone up of late, but its not participating with the general market, and overall its made no real relative results in about two years. So it as a pick really didnt do anything, other than one could have done just being in. Spy. Thats the issue i think what we have here is a stock that has checked back to trend, checked back to trend, and i think you have the risk that you check back to trend again on something perhaps unhappy in the earnings results. I dont want to be overweight banks here and i dont think it jpmorgan is any different than the group at large. Is there a differentiation, carter, between the big banks and say regional banks or mid to smaller sized banks . There were. Oh, there were . Only up 7 past 12 months massiveunder performance and the most rate sensitive part of the financial complex. That tells you something there small banks and some of them are outright very poor we do know yet online brokerage has been very strong insurance. Its really about the stock picking not the aggregate of financials being a good group to be in. All right mike, what do you think of banks now and specifically carter mentioned jpmorgan thoughts on jpmorgan start with Jpmorgan Jpmorgan is best of breed amongst the Money Center Banks and obviously performed very well and when you look at the fundamentals of the company, they remain relatively strong. Where you run into trouble, talking about the relative performance mattering. Another thing that matters is valuation. Where we are, above average valuations for many banks including jpmorgan, whether looking price to earnings or price to book basis. Somewhere between 7 and 15 above the historical valuations for the nail interesting also going into earnings some of these names are implying fairly big moves. Maybe above average moves. Isnt true for jpmorgan. Looking at about a 2. 5 move the bank itself is relatively expensive, options on it are not. The way to play this, looking out to march buy the 105, 100 put spread about 1. 15 looking at it earlier today. Spend 2. 20 for 19005 against i. Like that math trying to target that check back carter talk about. Interesting, i dont know what you think of the trade, bk. Give that opinion. This goes against what a lot of the fundamental strategists say on wall street all loves banks, best in breed its regulation. Same a year ago loved them a year ago. The question to ask yourself is, what has changed in the market that are going to make the banks go higher . You might say that with some of the banks that higher Interest Rates will help. Help that net interest margin. The other side, talking about the big banks like a jpmorgan, they also have the Capital Market side. No volatility like weve had, thats a problem for the trading desk not as much business in my opinion, relative flat performance in the banks because of a push and pull between different sides of their business. Youre with them. I wouldnt long them into earnings i like the idea putting a put spread on here maybe to protect a long position you had nap said, on a selloff, probably a little more excited about it. Carter . Last word. Its taxes, rates and the operating business itself and the environment these banks are in not at all a clear sign. How about deregulation, though that, too thats going to be the big driver right . The hope was those things would happen are they going to happen theyre not performing theyre not producing the results that you should expect for the risk you embrace owning them. Mike . You know, i like jpmorgan i just dont happen to like it terrifically at this particular price. That put spread cost 1 of stock price. Decent protection against the down side if you own it and decent for a bearish move if you dont. And bitcoin posting their best week ever, the crypto trade sizzles, both up 13 this week breaking it down, a man too hot to handle himself. Dom chu. Hey, dom. Well forget about hot melissa. How about roller coaster ride . Up and down . Hot and cold, whatever you want to call it weve seen in the midst of the price action for underlying bitcoin, a rise in Trading Interest in the two fooutures trading around 4,000 contracts a day according to the cboe, front stands around 2,830 contracts. Reminder, futures, one bitcoin xpoesh he exposure to one contract five bitcoins of exposure per one future, average daily volume, 823 contracts, open interest front month 642 contracts, according to data from the cme group the cme and cbo up on stocks themselves and a rise of other socalled bitcoin companies. Right . Check on online retailer overstock. Com pivoting towards the technology of things up 32 last five days. Payments processor square dabbling with bitcoin transactions, melissa. Those are up 17 in that time span bouncesing back from a recent pullback. Still, look at the stocks. Interesting move in the whole ecosystem. Back to you. Thank you, dom. Have a good weekend. What do you make of the recent activity and the fact Bitcoin Trading closer to the that to me is interesting right . First had the Bitcoin Futures come out you could almost pick up 8 between the time they came out and selling a longer, call it a march future, youd get 8 . Thats come down significantly part of the reason, not a lot of brokers were trading futures institutions couldnt trade them in size. Now that youre getting expanding open interest, expanding volume, youre going to start to see that pick up youre going to start to see the spread between bitcoin and futures compress a bit all a good thing for the ecosystem. That means its operating in a healthy way and operating in a way that it should, like every oh future market. In terms of what its doing, doesnt seem to do anything to volatility the thinking, perhaps would dampen some volatility in the underlying asset yeah. Havent seen that we havent seen that so much yet. Over time i think thats going to be one of those things, one two years down the line. Say, oh, you know what volatility slowly started to die down as more institutions ramp up and now you can have that selling pressure from short sellers and futures, if theyre long, should express volatility but something that will take a bit of time. Mike, dom mentioned bitcoin stocks, overstock and square, offering bitcoin sales through its cash app what do we see inner its of options activity i imagine pretty active . Theres no question that both of those and also the cboe and cme have seen significant increases in options activity since the announcement they would be participating either as overstock has in accepting it or cme and sbo enlists futures. Good idea to exchange it, certainly. A lot of very good news about it seems to be priced into these things already cboe, innovative amongst exchanges, i like what theyre doing but its not a cheap stock. 40 times earnings. Cme trading 30 times earnings. Like to see them moving in the direction. It will be helpful in the long run but the stocks arent clehep what about all tethered to b bitcoin, futures as well made quite a bounce off the lows. Thats the important thing. A 44 decline seems like a great thing in and of itself yet weve seen two 90 declines, three others, several 35 and 40 and yet each time, this is the end why does it have to be the end you never thought it was the end. No. A website, bitcoin died over the last nine years and its a pretty long list, so, no i dont think its the end you highlight with the volatility, investors hes in to know, extremely volatile asset class. 1 put in. Not take out a mortgage to buy this thats a bad idea. A warning, carter, technicals of it, the decline we saw a couple fridays ago isnt the big decline to expect this goround in the rally in bitcoin . The others have been deeper with very strong bouncebacks. Some deeper, but several, eight, 10, 12, 15, 30 to 40 . Seems to me another one of those. All right if you want to learn more about Bitcoin Futures check out our sister show futures now every tuesday and thursday. And of course, for everything options action, check out our website and sign unfor our super coal newsletter. More than 100,000 already have what areyou waiting for . Heres whats coming up next announcer thats what biotech has done of late, and something to suggest the games will continue next week. Well tell what you that is. Plus calling on options action fans, reach into your pocket, grab your phone and tweet us your question optionsaction if nice, were answer it onair, when options action returns. Logical you nnls options action is sponsored by whats 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 youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade well, itsonce again. Eason yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its 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. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from Td Ameritrade. Welcome back to pkz. Health care taking place in San Francisco next week with jpmorgans annual Health Care Conference kicking off monday. The group a strong start to the year meg has three names to watch before the torch is lit. Meg . Reporter biggest of the year more than 450 companies present 9,000 attendees, those are the ones that can just fit inside the building much more is happening around the building setting the stage for the rest of the industry what to watch deals. Monday morning, prime time for m a announcements. Pharma in 2015 and buying ariad last year all at multibillion dollar valuations. Many question whether theres been enough time to digest the tax overall for Big Companies to trigger this and many report q4 results early. Three stocks to watch, celgene, a tough fourth quarter, something of a bellwether for all and drove more generalist investors out of the space and also, jpmorgan announced in previous years and the stock under pressure down 14 in the last year. And regenreon, reports at the conference and ceo schleifer on. A space you wont want to miss. Thanks, meg. And biotech stocks among top performers should you keep betting on them in the new year . Carter is at the plaza to break it down. I like them keep betting on them in the new year look at the charts see if it makes sense when we do since inception, ibb we know when you have dynamic groundbreaking, lifechanging product, you can have dynamic groundbreaking lifechanging results. Ibb doubled the performance of the general equity market since launch a lot of Different Companies but the point is as a theme as a bet as an aggregate a place you want to be long term. The issue, underperformance of the past three years having peaked some three years ago, i have that same longterm trajectory on the bottom, relative performance to the s p what we know is, that this has come down to this line and bounced and bounced and bounced and bounced and were right down there again. Its my thinking that having underperformed were about to get outperformance not only relative, but absolute performance. Okay lets draw some lines. Here is the last five years. You could draw the lines this way. And it clearly came out of the wedge to the up side move on. You could draw the lines this way. Which to my eye would suggest more of that you could draw the lines this way. Like to look for head and shoulders. The indication is that either way, i think the way is higher for this former winner thats underperformed. Lets go to the here and now this is the past 12 months heres our trend line. And i want to make the bet again that we are going to bounce off the line, bounce off the line, bounce off the line, bounce off the line and make a new high i like ibb. All right looks convincing mike what do you think how are you trading biotech . I like the space. A lot of names are constituents of the ibb, etf unlike a lot of other stocks we look at, actually fundamentally looking cheap, creating essentially a floor in prices. Kind of what im betting on here also not a lot of good opportunities in this volatility environment to collect premium this is one of them. Looking out to february. Options that expire a little over a month from now. 109 puts i could sell those, collect 2. 25. Im collecting better than 1 a month in premium collected down side, if ibb drops i buy that 109 stock price but, of course, have collected that premium and own it lower this i think is a way to collect premium potentially put ibb at a favorable level and it is a way to collect premium when there arent a lot of opportunities to do it now. What do you think listen, on the guest here tonight and hate to go against carter and you arent. Heres the issue i have i would love to see more volume on this rally up havent seen a ton of volume average lower. On Something Like this, the way i tend to trade is, i wait for a breakout on higher volume than trying to get it here. To me it actually looks like at least in ibb might look at a double to top. Go to the nasdaq etf that one also looks like potential double top and im not at thrilled as they are. Sorry. Well, thats all right. Next time we have you here, someones got to take care of the important thing is this remember, betting on aggregate its 150 plus stocks 5 stocks up 40 . Biib and you are betting on the big ones but the issue is this if equities are going higher still does this group play catchup i would say, yes. Yeah. Thats the bet. Mike, final word, respond i look at a name like celgene, it troubles me. I probably would agree and one reason im not trading them outright and looking at a broader basket of stocks doing innovative things. There arent many opportunities toble to reach out to. Ibb might be a way to do it. Still ahead, coming back, and mikes got one name that could rally higher hell give us details. A question for one of our traders . Of course you do send a tweet to options action. If its nice well read it later on in the show much more options action right after this see thats funny, i thought announcer options action is sponsored by whats 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 youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade well, itsonce again. Eason yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. 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. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from Td Ameritrade. Welcome back to poptions action. Time to look back at trades. Mike made a bet halliburton would go higher. Halliburton in particular the best way to make a play. Interesting. Although you cited the fact the stocks have done well recently. Recently. Overall for the year one of the sectors not trading at an alltime high. The trade im looking at, the january 42, 40 put spread. Seller of that collect 50 cents. Since the time of the trade halliburton shares up almost 20 . Mike what do you do now . You know, so this is one of those cases where we put on a high probability trade when we sold that credit put spread, and sometimes youd actually have preferred to have taken the low probability bet. I still like halliburton here. Implied volatilities are low. Agreed. Shlumberberg, and energy acts like and stocks behind the commodity. What do you think with the run on halliburton a great place to buy upside calls, take profit. Exposure to the upside of halliburton. Up next, your tweets and the final call from the options action. Stay tuned announcer options action is sponsored by y. Whats 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 youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade well, itsonce again. Eason yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its 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. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from Td Ameritrade. Taking tweets. First question from jengo who asks, im new to this. Own 100 shares of bank america, can you benefit selling an options contract on this mike, take that. Absolutely. Sell the 32 calls. Selling a covered call the best way i think for most people to begin trading options. Next question, alex says, question for dan gm held a 44 level well. Ready for a bullish breakout from the handle. Better to buy outright or through options. Nasty weather has dan stuck in jamaica. Poor dan carter will take the question. Sure. Close 44. 01. Be aggressive buy options. Either way, going higher. Final call from the options pit. Mike covered calls the best way to get started. Carter . I want to get out of banks and into biotech. Bk. Thanks for having me and letting me put a jacket on buying options at a low volume. Thanks for joining us the following is a paid presentation, brought to you by beachbody, but filmed by me on my iphone and directly from my heart. Hold up. I want to ask you a question. How do you feel when you look at yourself in the mirror . Not so good. Like, ugh. Gross. Who is this person . Like, you know you have to do something, but its so confusing theres fad diets, extreme workouts, and its working for other people, but it is not working for you. You just want a system, a program that actually works hello that doesnt feel like