Why Crypto's Top Betting Tool Is Edging Closer to US Debut Under Trump

Trading of cryptocurrencies began in online forums and obscure exchanges, where buying and holding tokens was the norm. But making leveraged bets — a common tool in traditional finance that allows investors to take a large position with a small amount of capital — was nearly impossible.
That changed in 2016 when crypto trading platform BitMEX launched perpetual futures: contracts with no expiration that let traders speculate with leverage around the clock. Known as 'perps,' these contracts quickly became the dominant instrument to bet on crypto prices.

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Yahoo

32 minutes ago

• Yahoo

Make Over a 2.4% One-Month Yield Shorting Nvidia Out-of-the-Money Puts

Nvidia Inc. (NVDA) stock is cheap based on free cash flow (FCF) price targets. Investors can short out-of-the-money (OTM) NVDA put options to make a 1-month 2.4% yield. This is at 5% lower exercise prices, providing a cheaper potential buy-in point for investors. NVDA closed at $143.85 on Friday, June 20. In my last Barchart article on May 30, I argued that NVDA stock was worth $191.34 per share. That is still one-third (+33.0%) higher than Friday's price. The Saturday Spread: Statistical Signals Flash Green for CMG, TMUS and VALE Make Over a 2.4% One-Month Yield Shorting Nvidia Out-of-the-Money Puts Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! This article will discuss one way to play NVDA by shorting out-of-the-money (OTM) puts. That way, an investor can set a potentially lower buy-in point and get paid for this. But first, let's look at Nvidia's free cash flow and the related price target. In my last Barchart article, I showed that Nvidia's Q1 FCF of $26.125 billion represented an astounding 59.3% of quarterly revenue. That means almost 60% of its sales revenue goes straight into its bank account with no cash outlays on it (even after record-high capex spending). Moreover, I showed that over the last 12 months (LTM), its FCF margin was almost 50% (48.5%). That implies going forward its FCF could rise to a record high. For example, based on analysts' next 12-month (NTM) projections of $225 billion, using a 50% FCF margin free cash flow could exceed $112 billion: $225b x 50% FCF margin = $112.5b FCF How to value NVDA? Let's think about what the market might be projecting. For example, let's assume the market believes Nvidia will make $100 billion in FCF, slightly less than 4 times its Q1 FCF. So, given its market cap today of $3,508 billion, that represents a 2.85% yield: $100b/$3,508 = 0.0285 = 2.850% FCF yield So, using our NTM forecast of $112.5b, its market cap could rise to $3.75 trillion $112.5b / 0.0285 = $3,947 billion NTM mkt cap That represents an upside of 12.5% from today's market cap: $3,947b / $3,508b mkt cap today = 1.125 So, that makes its target price at least 12.5% more: $143.85 x 1.125 = $161.83 However, if Nvidia makes better than 50% FCF margins over the next year, its target price could be much higher. For example, even a 10% higher FCF margin leads to a 24% upside: 0.55 x $225b = $123.75b FCF $123.75b / 0.0285 FCF yield = $4,342 billion mkt cap; $4,342b / $3,508b = 1.2377 = +23.8% upside 1.1238 x $143.85 p/sh = $178 per share The bottom line is that Nvidia's strong FCF and FCF margins will lead to a significantly higher price, between $162 and $178 per share. This coincides with what other analysts are projecting. For example, 66 analysts surveyed by Yahoo! Finance show an average price target of $172.60. Similarly, Barchart's mean survey shows $174.83 per share. In addition, which tracks analysts who have written recently on NVDA stock, has an average price of $179.87 from 40 analysts. My analysis above shows you why these analysts have these higher price targets. But there is no guarantee NVDA will rise to these targets over the next year. So, one way to play this is to sell short out-of-the-money (OTM) puts in nearby expiry periods. In my May 30 Barchart article, I suggest selling short the $128 strike price put expiring July 3 for a 3.125% yield at a 3.72% out-of-the-money (i.e., below the trading price) strike. For example, the midpoint premium was $4.00, so $4.00/$128.00 equals 0.03125. That was for a one-month play (34 days to expiry or DTE). Today, that strike price has a much lower premium of just 39 cents. So, an investor has already made $3.61 (i.e., $4.00-$0.39), or a net 2.82% yield (i.e., $3.61/$128 = 0.028). It makes sense to roll this over and set a new one-month short-put play. That means buying back the short put at 39 cents and reinvesting at a slightly higher strike price one month out. For example, look at the July 25 expiration period (i.e., 34 DTE). It shows that the $137 strike price put options expiring July 25, i.e., 4.7% below Friday's price, have a $3.40 midpoint premium. That means a new short seller of these puts can make a 2.48% yield over the next month (i.e., $3.40/$137.00 = 0.0248). For less risk-averse investors, a 2.70% yield is possible at the $138 strike price(i.e., $3.72/$138.00 = 0.02696). This strike price is just 4% below Friday's close. Moreover, even after rolling the prior trade over, the net yield with the $137 strike put play is still 2.20% (i.e., $3.40-0.39 = $3.01/$137.00 = 0.02197). So, that means over two months, a short seller of these OTM puts will have made 2.82% plus 2.20%, or 5.02% total (2.51% on average for both months). In addition, an investor's breakeven point, even if NVDA falls to $137.00 over the next month, is lower: $137 - $3.40 = $133.60 p/ sh That is -7.125% below Friday's closing price. In other words, this is a good way to set a lower buy-in point for new investors in NVDA stock. For existing investors, it is a way to potentially lower their average cost, as well as produce extra income on their holdings. And don't forget, given the target price of $172.60, the breakeven point presents a potential upside of over 29%: $172.60/$133.60-1 = 1.292 -1 = +29.2% upside The bottom line is that investors can potentially make over a 2% yield over the next month shorting these out-of-the-money (OTM) puts. On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on 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

Wall Street Journal

an hour ago

• Wall Street Journal

What Israel's Soaring Markets Are Saying About the Iran War

Iranian ballistic missiles are raining down on Tel Aviv and Haifa. Israel's main airport is shut. Much of the workforce is moving in and out of bomb shelters. For most countries, such a wartime scenario would send investors fleeing and markets tanking. Yet the opposite is happening. Israeli markets are buoyant, outperforming the world. Israeli stocks, which trade Sunday through Thursday, have been posting solid gains. The TA-125 Index, also known as the Tel Aviv 125 Index, rose for five straight sessions as of the end of last week, even as global markets tread cautiously amid the specter of a prolonged Middle East war. It rallied again on Sunday after the U.S. strikes on Iran's nuclear facilities.

Yahoo

an hour ago

• Yahoo

AI chatbots and TikTok reshape how young people get their daily news

Artificial intelligence is changing the way people get their news, with more readers turning to chatbots like ChatGPT to stay up to date. At the same time, nearly half of young adults now rely on platforms such as TikTok as their main source of news. The findings come from the Reuters Institute's annual Digital News Report, released this week. The Oxford University-affiliated study surveyed nearly 97,000 people across 48 countries to track how global news habits are shifting. The study found that a notable number of people are using AI chatbots to read headlines and get news updates – a shift described by the institute's director Mitali Mukherjee as a 'new chapter' in the way audiences consume information. While only 7 percent overall say they use AI chatbots to find news, that number rises among younger audiences – 12 percent of under-35s and 15 percent of under-25s now rely on tools such as OpenAI's ChatGPT, Google's Gemini or Meta's Llama for their news. 'Personalised, bite-sized and quick – that's how younger audiences want their news, and AI tools are stepping in to deliver exactly that,' Mukherjee noted. Beyond reading headlines, many readers are turning to AI for more complex tasks: 27 percent use it to summarise news articles, 24 percent for translations, and 21 percent for recommendations on what to read next. Nearly one in five have quizzed AI directly about current events. (with newswires) Read more on RFI EnglishRead also:AI steals spotlight from Nobel winners who highlight Its power and risksAI showcase pays off for France, but US tech scepticism endures'By humans, for humans': French dubbing industry speaks out against AI threat