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00:00JULIE: JOINING ME , FALL IS A TIME WHEN VOLATILITY WILL COME BACK. WE WERE TALKING DURING THE BREAK . EVEN IF YOU THINK VOLATILITY IS COMING BACK, THERE ARE DIFFERENT DEGREES OF FAIRNESS. YOU ARE NOT LIKE AT DESK ON -- DEAF CONTENT, YOU MAY BE AT FIVE OR EVEN LOWER. -- YOU'RE NOT AT DEFCON 1 0. >> WE EXPECTED VOLATILITY AFTER BREXIT. IN A WEEK AND A HALF WE FACE THE REALITY THAT YES, TYPICALLY, VOLATILITY DOES THE IN FALL. WE KNOW WE'VE HAD SHOTS IN AUGUST, SEPTEMBER, AND OCTOBER OVER THE COURSE OF TIME AND WE WANT TO START MANAGING THAT RISK. YOU SELL A CALL AND BUY A PUT, PROTECT INDIVIDUAL STOCK POSITIONS, AND ALSO STOCK REPLACEMENT. LULULEMON CAME INTO EARNINGS, STOCK WAS UP 50% PRE-EARNINGS. LAST WEEK WE TALKED ABOUT TAKING OFF LONG STOCK POSITIONS AHEAD OF EARNINGS AND REPLACING IT WITH CALL SPREADS THAT EXPIRE IN DECEMBER. PHASE TWO, START LOOKING AT INDEX HEDGES AND LONG VOLATILITY. JULIE: LET'S GET MORE INTO LULULEMON. ESSENTIALLY THROUGH YOUR TRADE, YOU PROTECTED YOURSELF FROM WHAT WOULD'VE BEEN A STEEPER LOSS IF HE JUST HELD THE STOCK OUTRIGHT. >> WE RECOMMENDED CALL SPREAD BEFORE EARNINGS. THE STOCK IS DOWN ABOUT 13% POST EARNINGS. THE CALL SPREAD WE RECOMMENDED HAS GOTTEN ABSOLUTELY HAMMERED. >> BUT THERE IS STILL A CHANCE THE STOCK COULD COME BACK. >> THAT IS EXACTLY RIGHT. IF YOU TOOK DOWN STOCK 50% YEAR TO DATE, IT WOULD BE DOWN ABOUT 15% OF WHAT YOU WOULD HAVE SUFFERED HAD YOU JUST DID THERE LONG STOCK AND SUFFERED A 13% DRAWDOWN. LET'S LOOK OUT FOR STOCKS AT HALFTIME AGAINST THEM. REALIZE SOME GAINS, AND REPLICATES OPTIONS. JULIE: TWITTER IS HAVING A BOARD MEETING TODAY AND WHICH THEY ARE DISCUSSING, WE DON'T KNOW EXACTLY WHAT. THERE WAS A REPORT THAT THEIR ARE NOT ANY BIDS ON THE TABLE FOR THE COMPANY. >> ARE ANALYST DOESN'T THINK THERE IS A BID OUT THERE FOR TWITTER. USER GROWTH , MONETIZATION, ONGOING ISSUES. AVON WILLIAMS STOKED SPECULATION ONCE AGAIN THAT THE COMPANY MIGHT BE UP FOR SALE. WE STILL WANT TO REPRESENT UPSIDE IN A PRETTY INEXPENSIVE WAY IN CASE THERE IS A DEAL.

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Options Insight: Will Twitter Actually Sell?

Jim Strugger, MKM Holdings derivatives strategist, discusses the performance of stocks and his options strategy. He speaks with Bloomberg's Julie Hyman on "Bloomberg Markets." (Source: Bloomberg)