🕒 Market Overview: Given the geopolitical landscape, increased military spending, and NATO’s commitment to increase its spending, the prospects for the aerospace and defense industry remain highly bullish in November 2025.

🔄 Sector Insight: The increased defense spending supports a continuation of higher highs for the PPA ETF.

💰 Today's Trade Idea: Bull call on PPA targets upside

SMART TRADE IDEA

Bull Call on PPA

Trade Setup:  Buy $160 Call, March 20, 2026, expiration.

• Cost: $3 or lower ($300 per option)

• Max Profit: Unlimited

• Breakeven: $163.

Management Plan:  Roll up, spread, or take profits if PPA’s price reaches $170 per share before March 20, 2026

NOTE: Remember, options trading involves substantial risk and is not suitable for all investors. Consider your investment objectives, financial resources, and experience level before implementing this or any options strategy.

DISCLOSURE: Trade recommendations may have changed since publication. Evaluate current market prices and risk/reward before acting. Trading involves significant risk and is not suitable for everyone. This is not personalized investment advice. Past performance doesn't guarantee future results. Publisher and contributors may hold positions in recommended securities. Readers assume full responsibility for their trading decisions. Consult a financial professional before investing.

The early 2022 handshake between Chinese President Xi and Russian President Putin on a “no-limits” alliance, and Russia’s subsequent invasion of Ukraine, dramatically changed geopolitical dynamics. The bifurcation of the world’s nuclear powers ushered in a new era of spending on defensive and offensive weaponry.

Defense spending in the U.S. is increasing, and European NATO members will be spending a lot more on defense over the coming years.

The issues supporting increased global defense spending

The war in Ukraine continues to rage and escalate. The ceasefire between Israel/the U.S., and Iran remains fragile, while the region remains a tinderbox. Tensions between India and Pakistan have eased, but they could flare up at any moment. China remains committed to the reunification of Taiwan. NATO members, excluding only Spain, have agreed to boost defense spending to 5% of GDP by 2035.

The U.S. One Big Beautiful Bull Act of 2025 included a substantial increase in defense spending.

The leading defense contractors stand to gain

Source: companiesmarketcap.com

The leading defense contractors stand to benefit from the increased spending over the coming years. Peace through strength and technological advances will continue to support the defense contracting companies.

Given the geopolitical landscape, the defense sector could be recession-proof.

PPA is a diversified approach to the defense sector

Source: etfdb.com

The Invesco Aerospace and Defense ETF (PPA) holds shares in many of the top defense contractors. At $150.64 per share, PPA had over $6.557 billion in assets under management. PPA trades an average of 144,205 shares daily and charges a 0.58% management fee. The blended $0.97 dividend translates to a 0.64% yield.

Source: Barchart

As the quarterly chart illustrates, PPA is in a long-term bullish trend and is currently trading near its November 2025 high. The increased defense spending supports a continuation of higher highs for the PPA ETF.

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