Exits, 11/15/2024
How we did on the trades we exited this week.
Dids/Pexels
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 this spreadsheet. These are the trades I exited this week.
Stocks or Exchange Traded Products
Vaxcyte (PCVX 0.00%↑). Bought at $111.23 on 10/4/2024; stopped out at $97.14 on 11/13/2024. Loss: 12.7%.
ADMA Biologics (ADMA 0.00%↑). Bought at $15.92 on 10/25/2024; stopped out at $19.41 on 11/15/2024. Profit: 22%.
Innodata (INOD -0.25%↓). Bought at an effective price of $15.60 on 9/20/2024 (Sold $17 strike puts on INOD for $1.40 that were exercised at expiration); stopped out at $40.74 on 11/13/2024. Profit: 161%.
Options
Puts on Homestreet (HMST -1.97%↓). Bought at $0.80 on 5/7/2024; expired worthless on 11/15/2024. Loss: 100%.
Call spread on JD.com (JD 4.79%↑). Entered at a net debit of $1.28 on 10/7/2024; expired worthless on 11/15/2024. Loss: 100%.
Call spread on BHP Group Ltd (BHP 0.02%↑). Entered at a net debit of $3.40 on 6/11/2024; expired worthless on 11/15/2024. Loss: 100%.
Call spread on Neurocrine Biosciences (NBIX -4.45%↓). Entered at a net debit of $1.65 on 8/20/2024; expired worthless on 11/15/2024. Loss: 100%.
Call spread on Tenet Healthcare (THC -0.16%↓). Entered at a net debit of $1.65 on 9/6/2024; exited at a net credit of $0.38 on 11/14/2024. Loss: 68%.
Selling puts on Summit Therapeutics (SMMT -0.65%↓). Sold the $21 strike puts for $2.50 on 9/25/2024; assigned at expiration on 11/15/2024, when the stock closed at $18.31. Loss: 1%.
Call spread on Sea, Ltd (SE 0.00%↑). Entered at a net debit of $1.64 on 10/7/2024; exited at a net credit of $4.10 on 11/12/2024. Profit: 150%.
Calls on Robinhood Markets (HOOD 3.02%↑). Entered at $2.30 on 10/31/2024; exited (half) at $7 on 11/11/2024. Profit: 204%.
Calls on Bit Digital (BTBT 5.43%↑). Entered at $0.75 on 9/13/2024; partial exit on 11/11/2024 at $2.30. Profit: 207%.
Comments
Stocks or Exchange Traded Products
One thing I started doing recently is adding a “Signal” column on my trade-tracking spreadsheet to remind myself why I entered each trade. All three of these stocks were Portfolio Armor top ten names at the time we bought them. As a reminder, I post PA’s top ten names here each week.
Since I started this Substack, our top ten names have returned 18.6% over the next six months, versus 12.72% for the SPDR S&P 500 Trust (SPY 0.00%↑).
Options
Thoughts on a few of these trades:
HMST. This was a bearish bet against a bank with weak fundamentals. Its fundamentals still look week, but once the Fed started cutting rates, trades against banks seemed to stop working.
JD versus SE. Both were PA Top Names at the time, but one (JD) was based in China and the other (SE) in Greater China (Singapore). It seems like the Greater China names have outperformed the China ones recently. I’m not sure why, but it’s something I’ll keep in mind going forward.
BHP. Copper miner. Everyone says we’ll need more copper in the future as we build out more electric power generation for AI. And yet BHP is down 24% YTD. I have two very unsophisticated ideas about this. 1) There seems to be a lot of every non-precious commodity. Not just hard commodities like copper, but soft ones like wheat. You might have thought that full scale war breaking out between two of the world’s leading wheat exporters in February of 2022 would have been bullish for wheat prices, for example, but the Teucrium Wheat ETF (WEAT 0.00%↑) is down about 50% since then. 2) Maybe you need longer time horizons with commodity trades.
THC. I still own the underlying stock as part of our core strategy, and I’m up about 22% on it. This illustrates how it’s harder to make money in options than stocks, but when you do make money in options, you can make a lot more (had our THC options trade worked out, we might have had a >200% profit on it, like we did for HOOD and BTBT trades this week).
I’ll keep looking at what’s working and what’s not working, and adjust accordingly.
The Beneish M-Score
The Beneish M-Score is a statistical model used to estimate the odds that a public company is manipulating its earnings. There’s an online calculator at Professor Beneish’s university, but it requires you to enter in a couple of dozen fields from a company’s filings to complete.
If I can get another 15 or 20 subscribers to the Portfolio Armor web app this year, I will pay my software developers to add a Beneish M-Score calculator to the site, where you just enter a company’s ticker symbol and it populates all the fields itself.
If You Are Concerned About Downside Risk
As a reminder, you can download our iPhone hedging app by clicking on the QR code below or aiming your iPhone camera at it.
