hey, there. we're live at the nasdaq markets. the guys are getting ready behind me. while they're doing that, here's what's coming up. >> it's getting crowded in here. >> that's what some traders are saying about the so-called safest trades in the market. plus, thest the question every trader is grappling with. >> to be or not to be, that is the we? >> no, do you buy gold of sul ver. one is about to surge even higher. and -- >> honestly, we're out of gas. >> that sums up the transport. we'll tell you why it could get a lot worse. ♪ make that move right now

baby ♪ the story of the week was a collapse in global rights. a hunt for yield and perhaps some dangerously crowded trades. let's get in the money. dan, what are you looking at? >> we know what the trades have been over the course of this whole year. and really into the back half of last year. to me, it was obviously utilities. u.s. telcos. one of the things is the defensive nature of the businesses. not as much on the consumer staples. but there was also the dividend yield. they have become crowded trades. the most important point, thinking about the staples is that the stocks have gotten very expensive relative to the market. the s&p market is trades about 6 1/2 times. proctor & gamble is trading 21 times forward earnings.

that they'ved that negative growth >> if you think all growth the is going to be atroeshts, that's why that looks appealing. you're thinking you're getting a growth of 5%. you're looking at other spaces that don't seem like they'll turn around. especially with oil rolling over. that's the reason. people are saying 5% is okay with me if 2 spkt what we get. >> in the case of procter, thest the worst of a questionable group. it's valuation is just as high as the entire s&p 500 consumer staple sector. >> they're negative. >> they're negative on earnings. the top line down 15.5% over the last year. finally, all the commodities. softs, sugar. all going like this. that's not good either. >> but there seems to be -- there's a floor underneath these

stocks. >> 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 earning, a 20% discount, it would be a screaming buy. somewhere between where we are and that level. >> for the better part of this year, the stock has been trading in the mid to low 80s. it hasn't been able to break break beyond 85 bucks. if you were to see an upting in global growth for proctor. they're sales topd out at $85 billion in 2013. they're supposed to be, like, $64 billion in 2016. they need to make up a good bit of that. people have to see that they're going to get back towards peak sales for this thing to work higher from here in my opinion.

i just don't like it. you can say 5 a% yield. think about how much of their cash flow they're using to buy back stock to manage that eps too. >> that's disgraceful. i have no interest in that. >> simply, mel. i think it's a crowd name. if we have scenario like last summer where global growth e sees a downtick and people get worried about the crowded trades, it's important to remember that proctor & gamble topped $25 dollars in 2013. you want to look at options. for a break of the uptrend from the august lows. it's pretty well defined. i think you want to look at august expiration. two events. they'll report the q-4. and you have the july 27th fed meeting that could add volatility. my trade, simply, when the stock was 83 bucks. buy the august 82 half 70 put

spread. it breaks even at 80.5 on the downside. down to 70 bucks. i don't think it's going 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. i like the risk/reward. >> the lines are all very straight. >> thank you. helps. >> we know campbell's is doing better. kimberly clark. i would rather do what you're doing than saying play this for a catchup. >> i think you hit on the reason it's been weak. the input costs are rising. we saw last week's crop reports. corn, soy beans. we don't have the growth. selling the downside put for the 25 cents you're collected, it makes a lot of sense. that helps you rent this trade,

effectively. that option will decay much more rapidly than you think. at lower levels, it's a screaming buy. i advocate this trade. >> about that downside put. you're paying 2.25. selling the other one for 25 cents pip don't want to be naked long that put. if the stock moves back to 81, i could roll up that put. >> let's turn to technology. shares of alphabet tumbling today. after citigroup said the company could see a decline in ad spending. do tell. >> some of the e relationship between facebook and google and other things. a comparative chart of just that. it's facebook, top line here, the blue one. versus microsoft and google. it's year the date. and, while these are all

different businesses, different growth rates, different valuations. in a world where things are being bought and sold and rotation is the issue, not so much valuation, this is a spread that at this point starts to suggest that maybe facebook will go the way of microsoft and goog. take a look at the past 12 months. all about now trying to play for convergence here. you is green and orange, microsoft and google. facebook at the top. let's take it back further. over a two, three year period. same general circumstances. that's the better growth company. it hads been. it's starting to stall recently. my bet is it will come off here. here's a chart. short-term. past ear. my eye. you could draw the way you might want, my eye draws it like that. i see a low here. i see a low here. at a minimum. we're coming back to this low. the stock closed at 113.

that's about 108. pull back measure. the more draconian. if erp to stay in the channel but get to the bottom. we're looking at 98. this is the range in which the security has traded consistently and reliably. at a minimum objective. about a 5% move. 113 to 108. with a little luck, a little bit lower. >> what's your take? >> we can't say this is an expensive stock. it's got spectacular growth rates. if you think about priceline. facebook likes like it's setting up to do the same thing. however, this is something else we're looking at. this is an options trader perspective. the options are quite expensive when you look at how volatile it's been. the spread has widened. to do along with his thesis, i

think we're going to do one of the higher probability options trades you can ever do, and that is sell a call spread. i'm looking at the august, 115, 120 call spread. you can get a little over $02. if the trade goes down, you'll make money. if it rises, you still get a premium. the most risk you're taking is $2.95. >> i'm snickering here. >> why? >> so many things i disagree with. you're saying it's not an expense i stock. that $3.50 it's expected to earn this year. i know they're growing sales dramatically. it's a monopoly. they have a 1.5 billion users around the planet. it's trading 13 times sales. 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. sell the upside cost spread. use the proceeds to get a put or a put spread. >> whether something is expensive a function of how fast they're growing. they're growing at about 50%. so, you know, when you take a look at price earnings to growth -- >> hang on, mike. google went sideways for a few years when their growth decelerated. the ewe versele bullishness. if been wrong for the stock on 30 bucks. have a ball. keep buying at 113. you're making the argument against me. that doesn't make me want to sell your call spread. where do you think it's going? is this a pig call? >> that minor trend line. the more length or duration a trend has, the more important

sit. that intermediate affects it. just to stay still in that longer term bullish channel. that's down to 98. you're talking about a 13 plus/minus prer sent draw down. we started by talking about alphabet and citi's projected decline. is there a correlation there snrnlgts i absolu? >> i think there is. alphabet is under pressure because investors think that basically they had the monopoly essentially. that monopoly is steadily being eroded by the likes of facebook. at the end of the day, that's really the issue. is alphabet, i want to say google. going to own the space? no, they're not. >> you have a question? tweet us. go to our website. sign up for the supercool

newsletter. over 100,000 have. here's what's coming up next. >> oh, of course. gold doesn't grow on trees. >> that's true. it is surging. however, there's another commodity that might be a better buy. we'll reveal. plus, one hot sect sir 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.

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♪ "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." investors seem transfixed by the move in gold. it's up about 23% of the last three months. the near-term catalyst has been the uncertainty around the brexit. longer term factors at play are the low to negative rates. negative yielding bonds hitting a record high this week of $8.3 trillion. this as the fed, this week, dialed back the pace of rate hikes. betting on gold has been a popular hedge fund trade in 2016. at least for the next week, gold traders say the brexit role will play a factor. perilously in the momentum behind the leave camp continues

to strengthen. melis melissa? >> thank you. so carter is taking a look at another precious metal that is surging. what is it? >> they're fraternal twins. gold and silver. silver is poor man's gold. it can lag and come to life if a big way. a lot of juice. we have gold on top over dwleers. 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 overshoots. this one, the han brothers try to corner to market. it's juiced up and down. you see not only did it overshoot but it's undershot here. we're playing for catch up. liking seilver on a absolute

basis as well as compared to gold. let draw lines. you can do it this way. a break above a trend line. you can do it this way. people like to name their patterns. i suppose you could make the that head and shoulders if you want to name it. this way, a cup and handle. i think higher p erhigher. play for 8, 10, 12% up from here. >> this is a perfect place to trade options. in a situation like this, it could break out. there's also a significant risk in holding the underlying. i like to do the opposite of the facebook trade. i think we can buy a call spread. looking at the august 16 .5-18 call spread. normally, we're looking to spend about 25%. the reason is, this one is slightly in the money. really only about 40 cents of

extrinsic premium. that's how much higher slb has to get for this to break even. >> i'm going to come at you again. if carter thinks this thing is going again, just buy the call. i know you have very near the money participation. the point is, you also have a lot of time. >> you have a little over two months. i think the numbers i heard him talking about were up 10 pgt. approximately where this is going to go. we're selling the upside call 20 cents, 18-30. >> you're the professor. if this $1.5 wide call spread -- >> so let me teach. >> if it broke out. you have the stock, all right, between 17 and 18. you're short the 18 call. you have a month to wait, are you going to sit there and wait with a dollar and half call

spread in the risk/reward doesn't turn out the be fantastic. >> if it breaks through the higher strike, you're in a position in a high-volatility asset. that trade will end up looking like that. you'll be collecting decay as time goes on. that's a position i would like to be in. >> what about a pairs trade? silver long side, gold short side? have almost no capital risk. >> sell a call spread and buy one. >> no comment. i just got sxoomd. >> by the professor. > up next, from hot to not. one of the big sectors 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.

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. >> so to trade specifically in the xlv. you look at implied volatility. the price of options is cheap.

look out to july. the stock trading at 71. the july 71 calls, paying $1.25 for those breaks even. that is your max risk. >> well, health care was the worst performing sector. what are you doing with the trade, dan? >> the xlv went to 73 shortly after the call. appreciate it. think it got up about 220. mad an opportunity to maybe spread it or take profits. this one, now, you paid $1.25. the things a back at 70. time is not on your side. you only have a couple of weeks. think you have to cut your losses here, if you didn't do anything prior. i think today with the stock around 70, it was worth about 85 cents. i think i would look to do that. things should sew down after brexit. now to the transports. take a listen. >> well, again, this is going to

fail. importantly, down this week. worst on the market. down today. it just can't. this is with an upgrade in union pacific. second or third biggest weight from the street. still lagging in the market. >> i'm inclind to go with carter. i yt is the way you want to go with this. you can spend about $2.50 on that. >> transports are down about 1% since then. mike, what do you do? >> we gave ourselves a lot of time for this to play out. i think the thesis still holds. i thing it's a good trade. i'm staying with it. >> we have fedex earnings next week, carter. >> in the sense that iyt is -- after the dow jones -- this aggregate, this index is down 18.5% from its own, all-time high. something's wrong. >> all right. up next, final call from the

options set. 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. well, 25 years ago, ish, those fine folks over there gave birth to the cable sensation. since then, the world of derifties and television has never been the same. it's good to see you on the set. notice i said ish. >> give or take. >> all that knowledge and 25 -- >> amazing. >> he looks terrific. >> maybe not. let's take the tweets. paul asks, what will tlt do if brexit vote is to remain? >> we had a bullish trade in tlt a couple of weeks ago. we took it off this week. i think the tensions will ease.

you'll see tlt come back in. maybe a couple bucks off the high it made the other day. a reentry down towards 133. >> yield's lower. tlt higher. >> i'm looking for a reentry on the long side. after the tensions, think it should settle a little bit. >> next question, is there any reason to use weekly instead of monthly options? >> yeah, two good reasons. one, a lot more flexibility. before after. and the other is that some of the weekly options have more strikes than the regulars do. sam a good example. lots of tlex blt. if you haven't looked at weekly options, you should. >> final call? carter? >> facebook on the short side, slv on the long side. >> sell the august 115, 120 call spread for facebook. >> blchlt 25-year-old. >> we have a lot of fathers out there. happy father's day to you guys.

happy father's day to my father over there. procter & gamble, that sets up as a good short. >> looks like our time is done. mad money starts now. >> announcer: the following is a paid presentation from worx. [ dramatic music plays ] nothing offends these members of the mount parnassus garden club like a neglected lawn. and they're here to do something about it. [ clicks ] their weapon of choice -- the all-new worx gt 2.0... the next-generation lithium-battery-powered two-in-one trimmer and edger that means business.