A Second Opportunity In A Familiar Name

We’re revisiting Calumet (), a previous winner featured among Portfolio Armor’s Top Names last night. Its renewable-fuels expansion and debt reduction give us a fresh reason to consider it.

A company can appear on our system’s Top Names repeatedly as its outlook and market conditions change. We review the current business case, technical setup and options pricing each time. That process has produced sequential, profitable trades in the same companies, on more than one occasion.

The Record Behind The Repeat Trades

Since we started our Substack in December of 2022, we’ve been presenting our Top Ten names to subscribers each week. Those are the names our system estimates will have the highest potential returns over the next six months. So far, we have results for 173 completed Top Names cohorts. Over the next six months, they returned 18%, on average, versus 9.91% for the SPDR S&P 500 Trust ETF ().

We use our Top Names as a source of ideas for our options trades. Below are examples of two separate winning trades we had in the same stock this year, trades we entered when it appeared and reappeared in our top ten names. Our Start Here overview links to the public record of every completed trade. The examples below show gross options returns on original maximum risk, before fees.

Two Separate Lumentum Winners

Lumentum Holdings () illustrates the repeat-opportunity approach. Our January 14th Top Names trade closed on April 1st for a 194% gain on its original $710 maximum risk. Here’s the original entry:

The original opening limit was $2.50; our actual fill was $2.10. We then closed the put spread at a $0.10 debit and the call spread at a $16.00 credit:

Lumentum returned to the list later that month. We entered a new trade on April 24th and exited on May 7th for a 138% gain on $1,075 of original maximum risk. The first position had closed before the second opened.

The trade filled at the $10.75 limit and closed at a $25.61 credit:

Back To Calumet

Our May 1st Calumet trade also came from Top Names. We closed its put spread in July and exited the remaining call diagonal on July 20th, earning $343, or 49.7%, on $690 of original maximum risk.

The original $2.00 maximum debit filled at $1.90. The following card records both closing components:

Calumet makes specialty products and renewable fuels. In its second-quarter results, it reported $175.2 million of adjusted EBITDA with tax attributes, completed the first phase of its MaxSAF 150 expansion and highlighted $115 million of debt retirement in July.

On October 15th, it announced another $150 million redemption for October 25th. Management expects its recent debt-reduction actions, including this announced redemption, to reduce annual interest expense by approximately $26 million.

Cash generation and financing still need attention: Calumet posted a $95.9 million second-quarter GAAP loss, and total debt stood at about $2.26 billion at June 30th. Its next earnings report on November 6th will provide another check on operating progress.

For this re-entry, we’re using a different options structure aimed at greater participation in a strong rally. The new position has its own risk and timing; its entry instructions and management plan are below for paid subscribers.

New to our alerts? Start here for an overview of our approach:

Today’s Top Names Trade

Theme: Fuel output and debt cuts support recovery.

RSI: 50; Chartmill Technical Rating: 9; Setup Rating: 6; Fundamental Rating: 2.

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Two Different Paths

We’re opening the week with two different views: a bullish recovery trade in enterprise software and an asymmetric bearish trade ahead of a retailer’s earnings report.

The retailer faces weaker discretionary spending, downward earnings revisions and a near-term test of its outlook.

Salesforce () is our bullish trade for the week. Its software helps companies organize customer information, track sales opportunities, run marketing campaigns and manage service requests. Its AI tools help automate those workflows.

A Former Winner

Our June 17, 2024 alert used a bullish call spread in Salesforce. Here’s the original entry:

We closed that spread on August 29th after 73 calendar days, earning 166% on both net premium paid and original maximum risk, before fees.

Why We’re Bullish Again

Salesforce’s current contracted revenue backlog grew 14% year over year in the July quarter, including acquisitions. That growing customer demand supports our recovery thesis.

The stock is back in our preferred RSI range, and Friday’s Trend & Consolidation pass adds technical confirmation. We’re using a different options structure for this re-entry.

The first trade leaves room for a recovery over several months. The second focuses on this week’s earnings and the stock’s response. Paid subscribers will find our new Salesforce trade, the bearish company and both exit plans below.

New to our alerts? Start here for an overview of our approach:

Today’s Former-Winner Trade

Theme: Contracted revenue supports a recovery.

RSI: 56; Chartmill Technical Rating: 9; Setup Rating: 8; Fundamental Rating: 6.

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Getting Ahead Of November OpEx

November options expiration is Friday, November 20th. Following Friday’s expiration, we’ve reviewed our November positions against Friday’s close, current option data, brokerage holdings, outstanding orders and scheduled catalysts. The cards below show the initial and revised targets warranted by that review. Positions omit…

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Inflation Heated Up. AI Cooled Down.

AI stocks took a beating this week as investors questioned how the next wave of data centers would be financed. Hot inflation added to the pressure: September consumer prices rose 0.6% in a month and 3.7% from a year earlier. Producer prices jumped 1.3% in September.

Friday extended the damage. The S&P 500 fell 1.1% and the Nasdaq Composite lost 2.1%. Energy shares held up better as Brent crude settled at $109.86 a barrel.

Treasury bonds rallied through it. The official ten-year par yield fell from 5.24% to 5.09% between October 9th and October 16th. Investors were buying government debt while demanding much higher yields from some of the companies financing the AI buildout. The chart below shows the decline in Treasury yields.

Demand And Financing Are Different Questions

Taiwan Semiconductor Manufacturing Company (TSMC) offered fresh evidence of strong chip demand on Thursday. It reported $46.72 billion in third-quarter revenue, up 41.2% from a year earlier, and forecast $52.3–$54.3 billion for the fourth quarter.

Meanwhile, CoreWeave () and other heavily financed data-center businesses faced a harsher verdict in the credit market. Zero Hedge’s Friday market wrap traced the selloff from widening borrowing costs into AI stocks. Our view is that the suppliers’ orders and their customers’ ability to pay both deserve close attention. Growing demand can support earnings while expensive financing limits new capacity.

How We Traded It

Monday: Our first alert paired growing AI memory demand with a fresh Top Names ranking and technical entry signal. The bullish trade filled on Micron (). As with our July entry, it appears we were a little early with this re-entry. Hopefully, this one will end up in the black too.

Tuesday: The enforcement-capacity trade focused on converting government spending into recurring operating revenue. That bullish order filled too.

Wednesday: Cash generation and clinical efficacy gave us two different bullish setups. The biotech trade filled after we repriced it intraday and raised the entry limit; the cash-generation trade filled too.

Thursday: A re-entry and an earnings bet combined a former biotech winner with a bearish setup on a retailer tied to pressure on consumer spending. We opened the biotech trade; the bearish order didn’t fill.

Friday: No New Entries

We didn’t place any new trades on Friday because Thursday night’s triage didn’t turn up any compelling ideas on either the long or short side.

Exits And The Risk/Return Tradeoff

Options-expiration week brought a cluster of losing exits. The broader issue is concentration: several valid signals can reverse together when a strong investment theme sells off.

We’ve been giving fundamentals more weight in security selection, while weekly Runner Reviews reassess targets for uncapped options. This week’s Exits post covers the results and the lessons:

Three Ways To Use The Edge

Our year-to-date record puts this week in context. Through October 16th, 276 completed trades averaged 20.6% on original maximum risk, before fees:

Portfolio Armor’s security selection system can also be used to buy shares of its Top Names or construct a portfolio hedged against a chosen decline limit. The graphic below compares those approaches with options trading, using simplified annualized illustrations:

Calculations and source records.

What We’re Watching Next

Tesla reports on October 21st, after the close. Its margins and outlook will put a financial checkpoint alongside the Roadster demonstration we discussed on Friday. The Federal Reserve’s next policy meeting is October 27th–28th.

For the AI buildout, we’ll watch customer commitments, supplier results and financing costs together. For our next trades, we’ll keep looking for company-specific catalysts and stocks that pass the quantitative entry screens at attractive options prices.

Our Start Here page includes a public sample alert and explains how we structure and manage our trades.

Our year-to-date trade performance through October 16th appears below.

This Week’s Trade Exits

As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. Starting in July, 2024, I have also been tracking them in a spreadsheet. These are the trades I exited this week.

Clicking on one of the exit cards should take you to the original alert where we mentioned the trade; exits will be documented in the comments on the dates they occurred.

Stocks or Exchange Traded Products

None.

Options

Comments

Stocks or Exchange-Traded Products

No stock or ETF exits this week.

Our Top Names’ performance remains strong. The April 9th cohort gained an average of 38.93% over six months, versus 14.52% for SPY, as the chart below shows.

Options

This is an options-expiration week, when our losing exits tend to cluster. Our pre-set exit orders often get us out of winners earlier, while positions that never reach their targets can remain open until expiration.

Three losses exceeded 100% of the trades’ original maximum risk. We had paid to buy back the short calls, leaving the long calls uncapped. Those buybacks added to our costs. When the long calls expired worthless and the put spreads incurred full or nearly full losses, our total losses exceeded the amounts originally at risk.

Several bullish trades tied to AI infrastructure and space that we entered in May and June are now approaching their final expirations. The remaining dates span October, November and December, with some extending into 2027. We expect more losses from this older group as it rolls off. Some AI infrastructure companies still have time to recover, but that recovery has to arrive soon enough and be large enough to help the options we hold.

More speculative companies pose a particular challenge. Their valuations can depend heavily on distant growth, with little current earnings or cash flow to anchor them. When the technical trend breaks, there may be little valuation support to slow the decline.

Refining Selection And Exits

Our June 29th Fundamentals Get A Vote alert marked a step in that direction: we began recording RSI and Chartmill’s Technical, Setup and Fundamental Ratings in our trade alerts. Since then, we’ve incorporated fundamentals more holistically, weighing the business, its financial condition and its catalysts alongside the chart. The entry statistics give us a record we can compare with subsequent outcomes as we refine security selection.

Our weekly Runner Reviews reassess exit targets for uncapped options as prices, time remaining and catalysts change. The aim is to capture more of a winning trade’s gains before a reversal gives them back.

Concentration And The Risk/Return Tradeoff

As we noted last month, the broader vulnerability is concentration risk. Portfolio Armor’s Top Names, our Market Watchers, and the Multibaggers we follow often cluster around the same sectors or investment themes. We already use the Chartmill Setup Rating and our preferred RSI band to screen out overextended entries. Even with those gates, several valid signals can reverse together when leadership rotates or a previously strong theme sells off. That risk is inherent in an approach designed to concentrate capital in our strongest ideas.

Risk-averse investors can address that differently through Portfolio Armor’s hedged-portfolio method. It also concentrates on securities with the highest expected returns, but it strictly limits potential downside according to the investor’s selected threshold, as described in the post below.

The graphic below compares the historical return potential of our options trading, unhedged Top Names stocks and hedged portfolios, using simplified annualized illustrations.

Calculations and source records.

We’ve continued entering new trades when stocks passed our screens. We’ll keep comparing the newer cohorts with the earlier ones and looking for evidence-based ways to sharpen the process. For now, the clearest course is to apply our existing entry gates and weekly runner reviews consistently while continuing to refine selection and exits.

Options Trading: 52%

For 276 completed trades exiting in 2026 through October 16th, the average return on original maximum risk was 20.575%, and the average holding period was 143.986 calendar days.

20.575% × 365 ÷ 143.986 ≈ 52%

This illustration assumes continuous redeployment of equal amounts of risk capital as trades close. Returns are before fees, and the denominator is each trade’s original maximum risk.

See the trade-exit record and Portfolio Armor Trading.

Unhedged Top Names Stocks: 36%

The 172 completed weekly cohorts beginning December 29, 2022 through April 9, 2026 averaged an 18.10% unhedged return over six months.

18.10% × 2 = 36.20%, rounded to 36%

Each cohort measures its own six-month holding period. Doubling the average provides a year-length illustration without compounding.

See the complete cohort record and Portfolio Armor Basic.

Hedged Portfolios: 18%

Our selected example uses portfolios hedged against declines greater than 20%. The 177 portfolios begun June 30, 2022 through March 12, 2026 averaged 8.77% over approximately six months, net of hedging and trading costs. Protection assumes the displayed positions and hedges are entered and maintained as specified.

8.77% × 2 = 17.54%, rounded to 18%

See the tracked portfolio record and Portfolio Armor Premium.

A Car That Flips The Script

At its October 15th demonstration, Tesla sent its new Roadster up a curved ramp until it was driving upside down. The car flipped free, righted itself with cold-gas thrusters and settled back onto its wheels:

Two days earlier, Musk gave investors a tip about a company supplying memory for Tesla’s AI hardware.

Automating Our Trades

Before we get to that, a brief note for paid subscribers: Yesterday, I spoke with Dillon Del Rosso, cofounder of PeakBot, a platform that automatically copies a trader’s orders into subscribers’ own brokerage accounts.

If I sign an agreement with them, you’ll have the option to mirror my trades automatically at Charles Schwab and other supported brokers. You’d choose which tickers to activate and how much to allocate. The minimum subscription fee would be $150 per month.

You’ll find a survey question below the paywall at the end of this post where you can tell me whether you’re interested.

A Customer Endorsement With Teeth

Elon Musk’s praise for Micron Technology () goes straight to its business model. On October 13th, he said Micron had been reasonable about future memory prices, criticized other suppliers’ pricing, and argued that Micron was building long-term customer loyalty:

I like that approach. A shortage gives a supplier pricing power; treating customers fairly can help it keep their business when the shortage ends. Micron’s latest results show that customer goodwill and enormous profits can coexist.

Its September 30th earnings release reported fiscal fourth-quarter revenue of $54.23 billion, up from $41.46 billion in the previous quarter, adjusted earnings of $33.42 per share, and an 87% adjusted gross margin. For the current quarter, management guided to revenue of $61.5 billion, plus or minus $1.5 billion, and adjusted earnings of $38.15 per share, plus or minus $1.

Customers Are Committing To The Buildout

Micron has 26 multi-year, take-or-pay agreements with customers and $32 billion in financial commitments, the vast majority of which are cash deposits. Those commitments give the demand story substance.

The company has also completed agreements covering the vast majority of its calendar 2027 high-bandwidth memory supply, with significant year-over-year price increases. It expects memory and storage supply-demand conditions to be tighter in 2027 and 2028 than in 2026. Initial wafer output from its first Idaho fab is expected in mid-2027; its second is expected to follow in late 2028.

My view is that Micron’s earnings peak is still ahead. More capable models, longer conversations and more simultaneous AI users consume more memory. Customers are securing supply while new factories take years to build. That’s a compelling business to own.

Strong Demand, Tighter Financing

Taiwan Semiconductor Manufacturing Company (TSMC) reported on October 15th that third-quarter revenue reached $46.72 billion, up 41.2% from a year earlier. It guided to $52.3–$54.3 billion for the fourth quarter, citing continued strong demand for its leading-edge technologies. Demand for advanced chips keeps growing.

AI stocks sold off sharply early on Thursday amid financing strains at data-center operators such as CoreWeave (). They recovered substantially after Nvidia CEO Jensen Huang defended CoreWeave’s financial position, although AI stocks remained lower overall by the close. Higher financing costs can slow new capacity. For Micron, the cash-backed customer commitments above are an important part of my thesis.

I Bought The (Non-Flying) Car, Too

I bought a Tesla Model Y in September, and my subscribers and I are also long Tesla via options. Its Full Self-Driving (Supervised) system has impressed me most. On September 23rd, a juvenile black bear ran across a rural New Jersey road in front of my car, and FSD slowed the car to avoid it. I described the encounter in my Bear Witness trade alert:

Experiencing useful AI on an ordinary road strengthens my conviction in both Tesla and the companies supplying the hardware behind it. Micron has a direct connection: semiconductor research firm TechInsights found Micron memory in its teardowns of Tesla’s HW3 FSD computer and HW4 FSD computer.

Tesla’s current FSD requires driver supervision. Micron’s longer-term opportunity extends to more autonomous vehicles: in its earnings remarks, it said Level 4 and higher systems typically contain more than 200GB of memory and multiple terabytes of storage. Physical AI adds another source of demand alongside data centers.

Robots add to that opportunity. Counterpoint Research forecasts that humanoid robots’ demand for dynamic random-access memory (DRAM) will grow more than twentyfold from 2026 through 2030, according to Chosun’s October 11th report.

Considering A Tesla?

If you’re considering a Tesla, my referral link currently offers qualifying buyers three months of Full Self-Driving (Supervised). I may receive a referral benefit if you use it.

A Bullish Thesis Needs An Entry Point

I’ve been bullish on memory since last year. In my July memory-stock article, I focused on the timing of the earnings peak and the supply commitments supporting the upcycle. My quantitative approach adds two tests: Portfolio Armor ranks stocks by their estimated six-month returns, net of hedging costs, and my technical screens help time entries after a correction.

Micron was Portfolio Armor’s #1 name as of the October 9th close and passed my technical entry criteria. On October 12th, we added a new bullish trade. The alignment of a strong business, Portfolio Armor’s ranking and an actionable entry setup is why we bought before Musk’s October 13th endorsement.

We’ve Traded Micron Successfully Before

Our March 3rd Micron trade illustrates how we’ve expressed that view with options. Here’s the original entry card. We paid a $2.62 net debit, below the published maximum:

We closed the put spread in April and the call spread in May, completing the trade for a 173% return on its original maximum risk:

I’ll keep looking for compelling ways to trade the AI buildout, from the software you can experience to the memory that makes it work.

To see how I select, structure and manage these trades, start here:

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Our Basic Strategy

Our basic strategy is to buy equal dollar amounts of the Portfolio Armor web app’s top ten names, put trailing stops of ~20% or more on them, and replace them with names from the current week’s top ten when you get stopped out of a position—there are no options involved in this strategy.

A Top Names Performance Update

Before we get to this week’s top ten names, let’s look at the final, six-month performance of our top ten names from April 9th. Here’s the original post:

Over the next six months, our top ten names from April 9th, 2026 returned 38.93%, versus 14.52% for the SPDR S&P 500 Trust ETF (SPY), as the chart below shows.

We’ve now recorded six-month returns for 172 weekly Top Names cohorts since we started this Substack at the end of December, 2022. Across those cohorts, our top ten names averaged 18.10% over the next six months, versus 9.92% for SPY over the same periods. You can see every week in our interactive performance table, where clicking a date opens a chart of that week’s holdings.

That record keeps our Top Names at the center of our search for bullish ideas. We use them in the share-buying strategy above and in selected options trades.

This Week’s Top Names

Below are Portfolio Armor’s current top ten names as of Thursday, October 15th’s close.

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A Winner Returns To Our Entry Zone

On September 29th, we closed a bullish trade in a biotech for a gain of approximately 360% on our original maximum risk, before fees. The stock had rallied sharply, and its 14-day relative strength index (RSI) finished that session near 77—in overbought territory.

By Wednesday evening, the shares had pulled back about 20% from their late-September high. The daily RSI was back near 49, inside our “Goldilocks” entry zone of 40–60. The clinical case remains compelling to us, with additional data and a business update ahead, so today’s bullish order revisits the same company at a more attractive technical entry.

The idea comes from our Multibaggers list: a tracked group of outside analysts with multiple recent winners that gained 100% or more. Those accounts are a subset of our Market Watchers X list. For this re-entry, we’re using an options structure that preserves additional exposure to an early rally.

A Bearish Bet On Spending Pressure

Our second options trade is a short-term asymmetric bearish one. September’s 9.1% jump in gasoline prices leaves households with less room for discretionary purchases. High financing costs add pressure: the average 30-year mortgage rate reached 7.40% last week. Those conditions can weigh on spending tied to homes and larger purchases.

The stock passed our new Earnings Downgrades in a Downtrend screen, which we developed in conjunction with a frontier AI model. It combines downward earnings revisions, weak relative strength and a bearish price trend with a consolidated technical setup.

We’re expressing that view around an upcoming earnings report. A weak result could produce a decline worth several times the premium at risk; a favorable surprise could cost us the entire debit. The short duration keeps the trade focused on that earnings window.

Paid subscribers will find both names, the exact option structures, maximum entry prices and exit plans below.

New to our alerts? Start here for an overview of our approach:

Today’s Multibaggers Trade

Theme: Antibody data may drive revaluation.

RSI: 49; Chartmill Technical Rating: 9; Setup Rating: 6; Fundamental Rating: 3.

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Updating Our Entry Limit

I just repriced one of our trades from this morning, using intraday share prices and IVs.

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Two Routes To Higher Prices

Our first bullish trade is on a business generating substantial cash and returning capital to shareholders. Our second has a clinical readout due this quarter that could change how investors value its lead drug. Today’s alert puts both opportunities into asymmetric option structures.

The first came from Tuesday’s Portfolio Armor Top Names: the stocks our system estimates will have the highest returns over the next six months, net of hedging costs.

The candidate combines commercial PC revenue growth, cash generation and a fresh technical-screen pass.

A Catalyst Can Change The Valuation

The second came from our Multibaggers list, a tracked group of outside analysts selected for multiple recent stock winners of 100% or more. One of those analysts has made a bullish case for a biotech approaching a clinical milestone.

The readout will test its lead drug against placebo. We’re betting on an efficacy signal that could lift the pipeline’s value.

The two option structures help finance bullish exposure while keeping the entry risk defined. We priced both using Tuesday’s closing stock prices and Cboe’s contract-specific implied volatilities.

Full details including the company names, complete option structures, maximum entry prices and pre-set exit orders are below.

New to our alerts? Start here for an overview of our approach:

Today’s Top Names Trade

Theme: PC revenue growth and cash returns support upside.

RSI: 46; Chartmill Technical Rating: 6; Setup Rating: 7; Fundamental Rating: 5.

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