Trade Alert: AI Infrastructure Catch-Up
A bullish options trade on our #1 name from last night's ranking, an AI semiconductor company. Plus, another crack at yesterday's small cap tech co. with asymmetric upside.
Our Top Source Of Trade Ideas
As regular readers know, Portfolio Armor’s top names have more than doubled the performance of the SPDR S&P 500 Trust ETF (SPY 0.00%↑) since we started this Substack three years ago. Over 128 rolling 6-month periods, our top names returned an average of 20.42%, versus 10.17% for SPY. So Portfolio Armor’s top names are our top source of trade ideas. Last night, the #1 name was a chip company.
The AI Infrastructure Catch-Up
This is a large-cap technology leader that is critical to the “Second Wave” of AI infrastructure. While the market often focuses on a single dominant player in this space, our top-ranked name has quietly confirmed accelerating demand for its own high-performance hardware. This stock was one of our top ten names back in August, and we entered a trade on it then that we exited for a >100% gain in October. We’ve got a nice structure teed up for it today, one that will give us a modest profit if the stock just goes sideways for the next two months, while financing a lotto ticket trade going out six months.
Plus Another Crack At Yesterday’s Small Cap
We are pairing this with a second shot at yesterday’s idea from our Multibaggers list (the maritime turnaround play).
Since we didn’t get a fill on the original structure due to thin liquidity, we taking a different tack, focusing on strikes where we might have a better chance of getting fills.
Full details below.
Today’s Top Names Trade
(AI Infrastructure Theme)
The stock is Advanced Micro Devices (AMD 0.00%↑), and our trade is a combo consisting of these four legs:
Buying the $380 strike call expiring on June 18, 2026,
Selling the $400 strike call expiring on June 18, 2026,
Selling the $200 strike put expiring on February 20, 2026, and
Buying the $195 strike put expiring on February 20, 2026,
For a minimum net credit of $0.40. The max gain on 1 contract is $2,040, the max loss is $460, and the break even is with AMD at $199.60. This trade filled at a net credit of $0.60.
Essentially, we are betting that AMD holds above $200 for two months in exchange for a free ticket to ride the stock to $400 over the next 6 months.
Today’s Multibaggers Trade
(Starlink Backdoor & Turnaround Plan B)
The stock is KVH Industries (KVHI 0.00%↑). Since we didn’t get a fill on yesterday’s 3-leg structure, we are pivoting to a calendar call spread consisting of these two legs:
Buying the $7.50 strike call expiring on July 17, 2026, and
Selling the $7.50 strike call expiring on April 17, 2026,
For a max net debit of $0.35. The max gain on 20 contracts is uncapped after April (if the short call expires OTM), and the max loss is $700. This trade filled at $0.30.
Exiting These Trades
My plan:
AMD
Call Spread (Legs 1 & 2): Open a GTC limit order to exit at a net credit of $16.00, and lower that price, if necessary, as we approach expiration.
Put Spread (Legs 3 & 4): Open a GTC limit order to exit at a net debit of $0.20, and raise that price, if necessary, as we approach expiration.
KVHI
Calls/Calendar: Open a GTC limit order to buy-to-close the short calls (Leg 2) at $0.20, raising that price, if necessary, as we approach expiration. If the short calls are ITM on expiration day, sell the long calls (Leg 1) and use part of the proceeds to buy-to-close the short calls; if the short calls expire OTM, I will share a price for our GTC limit exit orders soon after expiration in a comment on this post and via chat/email.