This Ag play at all-time highs is due for a reversal. How to trade it with options
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CNBC
19 minutes ago
- CNBC
Downside risks on Apple are growing. Using options to hedge against potential declines
Apple's (AAPL) recent rally has lifted the stock back towards valuation levels that have downside risks when we factor into the lack of meaningful innovation. While recent earnings were better than feared and investments in the U.S. may eased regulatory concerns, the signs of decelerating growth and a lack of meaningful innovation with continued reliance on financial engineering — suggest renewed downside risk if market expectations aren't met. Trade timing & outlook AAPL has rebounded strongly, now trading around $230 after the post‑earnings spike with relative strength versus the S & P 500. However, this move approaches major resistance levels, and both momentum and volumes have slowed, raising the odds of consolidation or pullback in the absence of fresh catalysts. Looking at a longer term chart, we see a potential head and shoulders topping formation in the making that would target $200 to the downside. Fundamentals Apple recent rally pushes its forward P/E multiples near decade highs, suggesting diminishing margin for error. While the market rewards Apple's strong margins — but they're increasingly driven by services, not innovation. And the average target price across 40 analysts that cover AAPL is $236, reflecting only 2% upside. Forward PE ratio: 29x vs. Industry Average 20x Expected EPS growth: 9% vs. Industry Average 11% Expected revenue growth: 6% vs. Industry Average 6% Net margins: 24% vs. Industry Average 7% Bearish thesis Apple's AI upgrades, notably for Siri and Apple Intelligence, are delayed and underwhelming despite investing over $10 billion in AI. Most of the value creation levers now appear linked to services and share repurchases, raising sustainability concerns. With tech concentration in the S & P 500 near 40%, and broader economic uncertainty, consensus caution remains around correcting valuations across the sector. Options strategy To reflect these headwinds, I'm using a bearish-to-neutral income structure by Selling the Sept. 26 $230/$245 Call Vertical @ $6.10 credit. This entails: Selling the Sept. 26 $230 Call @ $7.90 Buying the Sept. 26 $245 Call @ $1.80 Max profit: $610 per contract if AAPL is below $230 at expiration Max risk: $890 per contract if AAPL is above $245 at expiration Breakeven: $236.10 View this Trade with Updated Prices at OptionsPlay This structure caps upside — reflecting valuation saturation — while capturing time decay and offering modest downside exposure if innovation delays and market sentiment puts pressure on the stock. Summary: While Apple remains fundamentally strong, the elevated valuation, innovation stagnation, and macro uncertainty suggests a cautious stance. The defined-risk bear call vertical captures this outlook where momentum stalls and valuation realignment sets in. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
Yahoo
22 minutes ago
- Yahoo
Fed- Which Interest Rate Path Will it Choose this Fall
Similar to the Scarecrow in The Wizard of Oz offering Dorothy two contradictory paths to the Emerald City, last week's Consumer Price Index (CPI) and Producer Price Index (PPI) data provided conflicting signals, implying the Federal Open Market Committee (FOMC) might adopt a more cautious stance on lowering interest rates, explains Sam Stovall, chief investment strategist at CFRA Research. To get more articles and chart analysis from MoneyShow, subscribe to our .) As a result, investors were left pulling petals from a daisy, wondering whether the FOMC will cut rates or won't cut rates at each of its remaining meetings for 2025. Not surprisingly, some sectors, subindustries, and stocks that skyrocketed when optimism surged following the encouraging CPI report were subsequently trashed when the PPI report told a different story. (Editor's Note: Sam will speak at the 2025 MoneyShow Masters Symposium Sarasota, scheduled for Dec. 1-3. Click HERE to register.) Recent data has contributed to the confusion, as Friday's retail sales beat estimates after big upward revisions in May and June. However, consumer sentiment and industrial production reports showed subsiding consumer optimism, as well as weaker output for all factories, mines, and utilities. We expect July Personal Consumption Expenditures (PCE) chain price gains of 0.2% for the headline and 0.3% for the core, which would match the respective June CPI gains. We also expect a Q2 GDP growth boost to 3.1% from 3% and forecast 2% GDP growth in Q3 and 1.9% in Q4. Even though the inflation picture has become a bit murkier, CFRA still expects the FOMC to cut rates by 25 basis points at both its September and December meetings, while skipping action in October. Despite the whipsaw action, the S&P 500 eked out a 0.9% rise in the week ending Aug. 15, accompanied by gains for all sizes and styles, along with eight of 11 sectors. Separately, news of Warren Buffett's purchase of battered UnitedHealth Group Inc. (UNH) sent bargain hunters in search of other potentially oversold opportunities – by looking for groups or stocks trading at an RSI (Relative Strength Index, a measure of price momentum) of 30 or below, which indicates an oversold condition with the likelihood of a near-term turnaround. This contrasts with an RSI of 70 and above, which implies overbought and due for a pause. See also: TXRH: A Casual Dining Chain with Solid Q2 Sales Growth Finally, last week saw a continued uptick in the week-ending percentage of the 155 sub-industries in the S&P 1,500 trading above their 10-week and 40-week moving averages – as well as above both to 54% – after registering an oversold reading of 7% on Apr. 4. More From FRT: A Retail REIT Targeting Markets with Strong Demographics GDX: Your Best Play for the Coming Leg Up in Gold Prices Market Minute 8/19/25: Will Advance Broaden, Pushing Markets to New Highs? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
5 hours ago
- Associated Press
Metals Edge Highlights Benefits of Precious Metals with Gold IRA Educational Resource
Metals Edge, a trusted name in the precious metals industry, has released its new Gold IRA Guide to help people safeguard their retirement savings in today's uncertain economy. The world is in a state of constant flux. From ongoing geopolitical tensions to persistent inflation and a soaring national debt, today's economic landscape presents numerous challenges to securing your financial future. In such uncertain times, it's more important than ever to explore strategies that can protect and grow your retirement savings. One such strategy to gain traction is the Gold IRA. Over the past 20 years, gold has shown remarkable resilience, appreciating by over 570%, translating to average annual returns of 8-11%. This guide is designed to provide you with a comprehensive understanding of Gold IRAs, explaining how they work, their potential benefits, and the steps you can take to set one up. Whether you're a seasoned investor or just starting to plan for retirement, this article will equip you with the knowledge you need to make informed decisions about incorporating precious metals into your retirement strategy. Understanding Gold IRAs: The Foundation A Gold IRA, or a precious metals IRA, is a type of self-directed individual retirement account (IRA) that allows you to invest in physical gold, silver, platinum, and palladium. Unlike conventional IRAs that typically hold stocks, bonds, and mutual funds, a Gold IRA offers a way to diversify your portfolio with tangible assets. What is a Metals Edge Gold IRA? A self-directed IRA provides greater control and flexibility over your investments, enabling you to invest in alternative assets not commonly found in traditional IRAs. These alternative investments can include: While self-directed IRAs require a custodian to administer the account, you, as the account holder, manage the account directly. A Gold IRA allows you to invest in gold and other precious metals while still enjoying the tax advantages of a regular IRA retirement account. Funding for Gold IRAs often comes from rollovers or transfers from existing retirement accounts like 401(k)s, 403(b)s, TSAs, or traditional IRAs. This allows investors to transfer wealth into precious metals, potentially providing more protection and stability. The Tax Advantage Framework of a Precious Metals IRA Investing in a Gold IRA offers the same tax advantages as a conventional IRA. You can invest in gold with pre-tax dollars, roll over existing retirement assets without immediate tax consequences, and defer taxation until you take distributions in retirement. There are two primary types of Gold IRAs: Traditional Gold IRA: Contributions may be tax-deductible, and earnings grow tax-deferred until retirement. Roth Gold IRA: Contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free. IRS regulations and compliance requirements are crucial for maintaining the tax-advantaged status of your Gold IRA. Custodians must adhere to IRS and Department of Labor regulations, maintain proper documentation, and implement Anti-Money Laundering (AML) programs. Reporting requirements include accurate completion and submission of IRS Forms 1099-R (distributions) and 5498 (contributions/fair market value). The Strategic Benefits of Gold IRAs Gold IRAs offer several strategic benefits that can enhance your retirement portfolio and provide a hedge against economic uncertainty. Portfolio Diversification Diversifying your portfolio with gold can help ensure that your assets are not entirely dependent on the performance of Wall Street. If financial markets decline, bond markets become illiquid, or stock markets crash, traditional investment assets may perform poorly. Gold, however, can act as a stabilizing force. Historical performance data support this claim. From 2000 to 2024, gold has shown an average annual return of 8-11%, outperforming many traditional investment options during periods of economic instability. The low correlation of gold with traditional investments makes it a valuable asset for managing risk. Economic Protection Mechanisms Gold has historically served as a hedge against inflation. As the value of fiat currencies erodes due to inflation, the price of gold tends to rise, preserving your purchasing power. During market downturns, gold often maintains or increases its value, providing a safe haven for investors. In times of currency devaluation or global economic uncertainty, gold's intrinsic value and scarcity make it a reliable store of wealth. Setting Up Your Gold IRA: A Step-by-Step Guide Setting up a Gold IRA involves several key steps, from choosing the correct type of account to selecting a custodian and funding your account. Initial Setup Process 1. Choosing Your IRA Type Traditional vs. Roth Considerations: Determine whether a traditional or Roth Gold IRA aligns better with your financial goals and tax situation. Funding Source Evaluation: Assess the source of funds you plan to use for your Gold IRA, whether it's a rollover from an existing retirement account or new contributions. Account Structure Decisions: Decide on the specific structure of your Gold IRA, considering factors like investment flexibility and long-term growth potential. 2. Selecting a Custodian IRS Requirements for Custodians: Ensure that the custodian you choose meets the IRS requirements for administering self-directed IRAs. Evaluation Criteria: Evaluate potential custodians based on their experience with Gold IRAs, their fee structures, and the security measures they have in place. Fee Structures and Considerations: Understand the various fees associated with a Gold IRA, including setup fees, annual maintenance fees, and transaction costs. Storage Requirements: Confirm that the custodian provides secure storage options for your physical gold, in compliance with IRS regulations. Funding Your Gold IRA 1. Rollover Options Direct Rollover Process: A direct rollover occurs when a distribution from a 401 (k) or similar retirement plan is made directly to another retirement plan or IRA account; no taxes are withheld from this rollover. Trustee-to-Trustee Transfers: A trustee transfer occurs when a distribution from an IRA occurs, and the distribution amount is sent directly from the first IRA custodian to another IRA custodian or a retirement plan; no taxes are withheld from this transfer. 60-Day Rollover Rules: This rollover occurs when a distribution from an IRA or retirement plan is made to you; you then have 60 days to roll over all or a portion of that distribution into an IRA or retirement plan. Common Pitfalls to Avoid: Be aware of potential tax consequences and penalties associated with rollovers and ensure that you follow all IRS guidelines. 2. Eligible Funding Sources 401(k) Rollovers: Transfer funds from an existing 401(k) into a Gold IRA, potentially diversifying your retirement portfolio. Traditional IRA Transfers: Move funds from a traditional IRA into a Gold IRA, taking advantage of the tax benefits and investment flexibility. Other Qualified Retirement Accounts: Explore the possibility of transferring funds from other qualified retirement accounts, such as 403(b)s or TSPs, into a Gold IRA. Contribution Limits and Restrictions: Adhere to IRS contribution limits and restrictions for Gold IRAs, ensuring compliance with all regulations. About Metals Edge Metals Edge is a leading precious metals firm dedicated to helping individuals protect and grow their wealth through gold, silver, and other precious metals. With a focus on education, transparency, and customer care, Metals Edge provides guidance for investors looking to add stability to their retirement portfolios. Disclaimer: Media Contact Company Name: Metals Edge Contact Person: Stephanie Sutcliffe Email: Send Email Address:7111 Fairway Drive, Suite 101 City: Palm Beach Gardens State: FL 33418 Country: United States Website: Press Release Distributed by To view the original version on ABNewswire visit: Metals Edge Highlights Benefits of Precious Metals with Gold IRA Educational Resource
