the guys are getting ready behind me. while they're doing that, here's what's coming up. >> it's getting crowded in here. >> yeah, that's what some traders are saying about the so-called safest trades in the market. it could spell trouble for stocks. plus, it is the question every trader is grappling with. >> to be or not to be, that is the question. >> no, do you buy gold or silver? because the charts say one is about to surge en higher. and -- >> how is it out of gas. >> we'll tell you why it could get a lot worse. the action begins right now.

let's get right to it. the story of the week was the collapse in global rates. the ten-year yield hitting multi-year lows. that has created a hunch for yields and dangerously crowded trades. dan, what are you looking at? >> we know what the trades have been over the course of this whole year. and really, in the back half of last year. to me, it was obviously utilities, consumer staples. there's two components of that sort of thing. one is the defensive nature of some of the businesses. a lot of revenues here. there was also the dividend yield. to me, they have been become very crowded trades. the most important point i would say, looking at the staples, the stocks have gotten very expensive relative to the market. the s&p 500 is trading about 16 1/2 times on a forward basis. then you have consumer staples, like proctor & gamble that is trading 21 times forward earnings. i think that's an obscene

valuation to pay for really what is atrocious growth over the last year. >> if you think all growth is going to be atrocious, that's the reason why that looks appealing, right? do you figure you're getting a corporate earnings yield of about 5% and think at best the economy's got 2% growth, you're looking at a lot of other spaces that don't seem like they're really going to turn around. especially with oil rolling over. maybe you're playing for a rebound there. that's the reason. people are saying, 5% is okay with me. if 2% is what we get. >> right. but in the case of proctor, it's the worst of a very sort of questionable group, in the sense its valuation is just as high as the entire s&p 500 consumer staple sector. yet its growth rates are much worse. >> they're negative. >> negative on earnings. down 15% over the last year. at this point, there's something that's not right. and finally, all the commodities, corn, sugar, wheat, all going like this. for all of the big staples

stocks, that's not good either. >> to your point, there is a floor underneath these stocks to a certain extent. because of demand for -- simply because of demand. >> the reason that -- at what point are you going to be a seller of this thing when it's trading 16 times earnings? clearly at 16 times earnings, which is, you know, 20% discount where it is, would be a screaming buy. somewhere between where we are in the stock and that level, is basically -- >> for the better part of this year, the stock has been trading in the mid to low 80s here. it has not been able to break out above 85 bucks. i just think at some point it's a very, very crowded trade. when you look at a stock like proctor, to me, if you were to see an uptick in global growth, okay, this stock should do well. there's like -- carter just said, their sales, topped out at $84 billion, mike, in 2013. they're expected to be in fiscal 2016. $64 billion. that is a massive, massive swing. to me, they need to actually make up a good bit of that. people have to see they're actually going to get back to

peak sales for this thing to work higher from here, in my opinion. listen, i just don't like it. you can say 5% yield, think about how much of their cash flow they're using to buy back stocks, to manage that eps that's down significantly. >> let's get to the trades. >> real simply, mel, i think it's a crowded name. i think if we have a scenario like last summer where global growth has a downtick, remember that proctor & gamble august 24th 2015, topped $62. i think you want to look with options as cheap as they are for procter & gamble, from the august lows, it's pretty well defined. not able to break out at 85. i think you want to define your risk and look to august expiration. two events should give guidance for the full year, that's in early august. and the july 27th fed meeting that could add volatility. so my trade very simply, today when the stock was 83 bucks,

august expiration, buy the august 82 1/2. paying $2 for that. it breaks even at 80 1/2 on the down side. make up to 10 1/2. i don't think it will go to 70. i think you have a good shot of it going to the mid-70s if they were to guide down for the fiscal year and we get volatility around the fed meeting. given how option prices are -- >> the lines every all very straight. >> thank you. >> we know coke is doing better and philip morris and kimberly clark. pick your stock. there's something wrong with the behavior. i would rather be doing what you're doing than play this for a catch-up. >> i think you hit on the reason it has been weak. the input costs are rising. it could go substantially higher. corn, soybeans, we don't have the top line growth. the other thing is, selling that down side put for the -- it

might seem -- it helps you rent this trade effectively. that option will decay much more rapidly than you think. i pointed out at lower levels, i think it's a screaming buy. i actually advocate this trade. >> really, about that down side put. you're paying like $2.25 for the put, or near the money put and selling the other one for 25 cents. it doesn't seem like a heck of a lot. but i don't want to be naked long that put. the stock moves back to 81, that should roll up that put to the 75 strike at a level where i would be taking that position off. >> let's turn now to technology. shares of apple tumbling -- alphabet, excuse me, tumbling nearly 3% today. after citigroup said the company could see a decline in ad spending. carter says another stock to follow. do tell. >> some of the relationship between facebook and google. a couple of charts here. the first is a comparative chart of just that. it's facebook. top line here. the blue one.

versus microsoft and google. it's year-to-date. while these are all different businesses, different growth rates, different valuations n a world where things are bought and sold and rotation is the issue, not so much valuation, this sa little bit of a spread that at this point suggests facebook will go the way of microsoft and goog. year-to-date chart, take a look on the past 12 months. again, all about now trying to play for convergence here. you've got, again, green and orange. microsoft and google. facebook up here to the top. okay. let's take you back even further. this is over two, three-year period. same general circumstance. you could say, yeah, that's the better growth company. it has been. the question is, more recently it's starting to stall just as they have. my bet is it's going to come off here. here's a chart. short-term. past year. draw it the way you might want. my eye draws it like that. i see a low here. i see a low here. i think at a minimum, we're

coming back to this low. the stock closed at 113. about 5%. pulling it back a little bit more, the more draconian, if we were to stay in the channel but get to the bottom of the channel that we've been in since the 2011 low, we're looking more at 98. this is literally marked, the range, in which the security has traded, consistently and reliably. at a minimum objective, about 5% move. 113 to 108. and with a little luck, a little bit lower. >> what's your take? >> fundamentally we can't say this is an expensive stock. it's got spectacular growth rates. think about a stock like priceline, which also had a prolonged period of very good top line growth, facebook looks like it's setting up to do the same thing. however, there is something else that we're looking at. this is just an options trader's perspective on this. the options are quite expensive when you look how volatile the stock has been. the spread between how much the options cost and how much they should cost has widened

considerably. to go along with his thesis, i think what we're going to do is actually one of the higher probability options trades you can ever do, and that is sell the call spread. i'm looking at the august 115, 120 call spread. collect a little over $2 for selling that. and here's the nice thing about this trade. if it goes down, as carter has basically predicted, you're going to make money. even if it stays here, or even if it rises slightly, you'll collect the premium. the most risk is $2.95, in the event it runs through both strikes by expiration. >> i snicker in here. there are so many things i fundamentally disagree with. that $3.50, expected to earn this year, on a gap basis is $2.50. trading at 55 times earnings. a stock that's trading -- i know they're growing sales dramatically. it is a monopoly, we get it. 1.5 billion users around the planet. at that point it will decelerate massive massively, it already has. $330 billion market cap. so i actually agree with

carter's technical take. i think mike's probabilities on the short call spread makes total sense. but use that premium. if you agree with carter, and buy a put or a put spread, or something like that. so sell the upside call spread, and use the proceeds to buy a put or put spread. >> whether something is expensive is a function of how fast they're growing. and so you can say, yes, fair point. they are trading at 50 times. they're also growing at about 50%. price earnings to growth, facebook is the best place. >> we can talk about google. google went sideways for a few years. they were the only game in town there. the universal bullishness, i've been wrong on the stock for 30 bucks, keep buying at 113. i'm just saying, you're actually making the argument against me which doesn't make me want to sell your call spread. >> the call spread is a high probability trade regardless of your fundamental view. >> but carter, where do you think it's going? is this a big call? >> the minor trend line, the

more length or duration a trend has, the more important it is, right? that intermediate or minor trend line affects the lows of the past year. but just to stay still in that longer term bullish channel, that's all the way down to 98. you're talking about a 13-plus or minus drawdown. that's a pretty reasonable price objective. >> we started off by talking about alphabet. and citi's projected decline in ads. do you think there's a correlation there? >> absolutely, i do. one of the issues that -- alphabet is under a great deal of pressure. i believe investors think that basically they had the monopoly, essentially, and that monopoly is steadily being eroded by the likes of facebook. i don't think linkedn, microsoft are going to challenge them very much. at the end of the day, that's the issue here. alphabet, i want to say google, but is alphabet really going to own the space entirely? no, they're not. >> send us a tweet. check out our website.

while you're there, sign up for our super cool newsletter. here's what's coming up next. >> of course, gold doesn't grow on trees. >> that's true. but it is surging. however, there's another commodity that might actually be a better buy. we'll reveal. plus, one hot sector suddenly not. and it could have big implications for the rally. we'll tell you, when "options action" returns. here at td ameritrade, they work hard. 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. this clean was like - pow. everything well? it felt like i had just gone to the dentist. my teeth are glowing. they are so white. 6x cleaning*, 6x whiteningá in the certain spots that i get very sensitive... ...i really notice a difference. and at two weeks superior sensitivity relief to sensodyne i actually really like the two steps! step 1 cleans and relieves sensitivity, step 2 whitens. it's the whole package. no one's done this. crest - healthy, beautiful smiles for life. wrely on the us postal service? because when they ship with us, their business becomes our business. that's why we make more e-commerce deliveries to homes than anyone else in the country. here, there, everywhere.

united states postal service priority: you 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. welcome back to options action. investors remain transfixed by

the move in gold. closing out by 1 1/2 percent this week. the near term catalyst has been the uncertainty around the brexit, which investors fear will pose global financial risk. longer term factors at play have been the low to negative rates. negative yielding bonds, in fact this week, hitting a record high of $8.3 trillion. this as the fed pulls back the rate hikes. for the next week, gold traders say the brexit vote will drive assets like the shiny yellow metal. especially if the momentum behind the lead camp continues to strengthen. >> seema, thank you. carter is actually looking at another precious metal that has been surging. >> these are, of course, joined at the hip, fraternal twins, gold and silver.

silver the poor man's gold. it can lag and then it can come to life in a big way. a lot of juice. so a comparative chart over three years, gold on top. you've got your silver on the bottom. it's the lag that sort of appeals to my eye. now, i want to show you something for fun. this is what silver can do when it's exciting. it really typically overshoots and undershoots, silver being the blue line. the hunt brothers tried to corner the market. the point is, it has juice both up and down. you see that not only did it overshoot, but it's undershot here. so at this point, just back to this, we're playing for a little bit of catch-up. not only liking it relative to go, but liking silver on an absolute basis as well. here's the slv, closing at $16.60. do it this way. clearly a break above a trend line. you can do it this way. people like to name their patterns. i suppose you could name it head and shoulders. you could do it this way.

call it a cup and handle. either way, anyway, i'm thinking 16.60. closed play for 8, 10, 12%, just up from here. >> nice gain. what do you think? >> commodities always move further and faster than you think they will. this is a perfect place to trade options, frankly. in a situation like this, it could obviously really break out. but there's also a significant risk in holding the underlying. what i like to do here is the exact opposite of the facebook trade. i think we can buy a call spread in this case. the august 16 1/2 call spread. spend about 50 cents for that. normally we're looking to spend about 25% between the strikes, spending a little bit more. the reason is this one is slightly in the money. really only about 40 cents worth of premium. that's how far -- that's how much higher it has to get to break even. this is a way to basically take relatively little risk in what can be a risky asset. >> i'm going to come at you again. >> oh, wow.

what a friday. >> just by the call, right, get the breakout. and then look to spread it. i'm saying, the -- i know you have near the money participation. the point is, you also have a lot of time. if you've got the breakout -- >> you've got a little over two months. i think the numbers that i heard him talking about were up 10%. which is approximately where this is going to go, right? we're selling that upside call for 30 cents. 18.30. >> you're the professor, okay? if this one and a half dollar -- >> let me teach. >> ooh! >> if it broke out, right? and you have the stock, all right? between 17 and 18, and you're short the 18 call, and you have a month to wait, are you going to sit there and wait with $1.5 call spread worth about 50% of the wait? the risk/reward doesn't turn out to be that fantastic. >> if it breaks through the higher strike, you're in a high volatility asset where you're essentially short a put spread.

what that trade is going to end up looking like. you'll be collecting decay as time goes on. that's a position i'd like to be in. >> last word to carter. >> what about playing both sides? do the silver long side and gold the short side. have almost no capital risk. >> sell a call spread in gold, buy one in silver. >> interesting. >> no comment. >> by the professor. all right. up next, from hot to not, one of the best performing sectors in the last few months is suddenly tanking. we'll explain right after this break. here at td ameritrade, they work hard. 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.

♪ "dinner!" "may i be excused?" get the new xfinity tv app

and for the first time ever stream live tv, watch on demand, and download your dvr shows anywhere. 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. welcome back to "options action." we take a look back at some of the open trades. last month dan thought health care stocks were about to take off. take a listen. >> since the trade specifically in the xlv, look at implied volatility, the price of options is very cheap. that makes a lot of sense for a

whole host of reasons. you could look out to july expiration, the xlv with the stock trading at 71, and just find the july 71 calls. paying $1.25 for those. breaks even at 72 1/4. that is your max risk. >> health care was the worst performing sector today. so dan, what are you doing with the trade? >> this is one i think you want to manage here. the xlv went to 73 shortly after the call. obviously appreciated, got up to about 2.20. maybe spread it like we were talking about before, or take some profits. you paid $1.25. it's back at 70. your time is really not on your side here. you only have a couple weeks. i think you have to cut your losses here if you didn't do anything prior. i think today with the stock around 70, worth about 85 cents. i'd probably look to do that, especially as we head into a holiday week. things should slow down after brexit, into july 1st, you want to be out of this. >> now to the transport. >> this is going to fail.

importantly, down this week, worse in the market, down today. it just can't -- this is with an upgraded union pacific, second or third biggest weight in the street. >> i'm inclined to go with carter. iyt is the way you want to play this. look out to september. buy the 135, 125 put spread. spend about 2 1/2 bucks for that. >> transports are down more than 1% since then. so mike, what do you do? >> well, this is a situation we gave ourselves a lot of time for this to play out. i think these still hold. i'm not going to do anything. i think we're up small in the trade. but it's a good trade and i'm going to stay with it. >> fedex earnings next week, carter. how does that impact iyt? >> after the dow jones, a priced index. this aggregate, down 18.5% from its own all-time high, when equities are almost at their highs. something's wrong. >> up next, "final call" from

the options desk. here at td ameritrade, they work hard. 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.

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. 25 years ago, ish, the world of derivatives, never been the same. nice to see the nathans here on set. welcome to the nasdaq market site. notice i said-ish. give or take. >> amazing. sglb let's take a tweet. paul asks, what will tlt do if brexit vote is to remain? dan? >> so, a couple weeks ago on this show, we had a bullish trade in tlt. we took it off just this week as it broke out. i actually think a lot of tensions are going to ease over the next week or sosmt i think

you'll see tlt come back in. even a couple more bucks off the high it made the other day. reentry down toward 133. >> that's fair. i think the real direction is ultimately yields lower, tlt higher. >> i'm looking for reentry on the one side. after the tensions i think it should settle a little bit. >> tom lee, is there any reason to use weekly instead of monthly options? >> yeah. there are two very good reasons. number one, it gives you a lot more flex act with respect to structuring options trade around catalysts before, after. and the other is, some of the weekly options actually have more strikes than the regulars do. apple is a good example. half dollar strikes in there. lots of flexibility. you should look at weekly options. >> carter. >> facebook on the short side, slv on the long side. >> mike? >> sell the august 115, 120 facebook. >> 25-year-old. >> we got a lot of fathers out there who watch this fine options program.

happy father's day to my father, and your fathers. i hope if you get an easing of tensions in the next week or so, that sets up a good choice. >> looks like our time is expired. check out the website my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i just want to make money. call me. or tweet me at jim cramer. this whole situation is starting to feel a little greek to me. i'm talking about brexit. we are living in fear of an