Trade Alert: Ceasefire Edition
Keeping our discipline here as we add bullish bets on two of our Top Names from last night.
Ceasefire Relief, But We’re Keeping Our Discipline
In yesterday’s trade alert, we placed a bearish options trade on oil on the view that the Iran war was more likely to end sooner rather than later.
After news broke last night of the ceasefire in the Iran war, that thesis has started to play out. Oil is tumbling today, and stocks are ripping higher in relief.
That said, we’re maintaining our discipline here. The demands of the two sides still seem far apart, and the path from a tentative ceasefire to a durable settlement is far from straightforward. So even with the market moving sharply in the direction we expected, we’re not treating this as a reason to chase new trades indiscriminately.
How We’re Approaching Today’s Trades
As usual, when we look at options structures, we start by estimating their fair values and then try to enter them at discounts to those values. That doesn’t guarantee fills, of course. Sometimes it means we miss trades. But over time, we think it’s a better approach than paying up in the heat of a fast-moving tape.
That’s especially important on a day like today, when stock prices are ripping higher and the temptation is to get more aggressive just because the headlines have turned. We’d rather miss a trade than overpay for one.
Today’s Two Setups
Today we’re looking at two names from our Top Names list.
One is a company in photonics and industrial lasers, a space that could benefit if capital spending continues to recover and if investors stay willing to rotate into cyclical technology names with improving setups.
The other is a more defensive growth name in specialty ingredients, a steadier kind of business that still offers upside when it shows up high in our rankings and gives us an options structure we can live with.
That’s the common thread here: not chasing the hottest headline, but looking for names with good setups, solid upside potential, and options structures we can enter at prices that make sense.
Today’s First Top Names Trade
Photonics / industrial laser theme
