Trade Alert: Energy And Biotech
Bullish options bets on two of our Top Names from last night: a North American energy company and a European biotech.
Two Very Different Top Names Trades
Our two Top Names trades today come from different sectors.
One fits the recent pattern we’ve seen from Portfolio Armor’s Top Ten: another primarily North American energy name, and at first glance, not the most exciting one. The other is almost the opposite: a European biotech with much more obvious upside potential if its upcoming catalysts break the right way.
That contrast is interesting in itself. Portfolio Armor’s Top Names haven’t all looked thrilling over the last two weeks, but that doesn’t mean they haven’t been worth paying attention to. Sometimes the system gives us a stock that looks solid and a little boring. Sometimes it gives us something with a more obvious “story” attached to it. Last night, it gave us one of each.
A Familiar Energy Setup
The first trade is on another primarily North American energy producer (it has some North Sea and West African exposure, but no Middle East exposure). That fits the pattern we’ve seen over the last couple of weeks, with Portfolio Armor turning up a number of names tied to oil, gas.
On the surface, that may not seem all that exciting. But in this market, cash-generative energy names can still work, especially when they’re based in North America and therefore insulated (and potentially able to profit) from the direct supply disruptions in the Middle East.
A More Exciting Biotech Setup
Our other trade is the more interesting one.
We’ve traded this biotech before, and just this week we exited a profitable trade on it.
What pushed it over the line this time was a confluence of factors. It showed up in Thursday night’s Top Ten. It also passed our tighter RSI and Chartmill Setup Rating screens. It remains a favorite of multiple accounts on our Multibaggers X list. And unlike some biotechs that are just “story” names with no clear timeline, this one has specific upcoming catalysts we can structure around.
The first is in May, when the company is expected to report financial results. The bigger one is in late June, when Phase 3 data are expected. We’ve structured today’s trade so that we harvest premium through the May event while keeping our longer-dated upside exposure alive through the more important June catalyst.
Maintaining Our Discipline
As always, on the options side, we’re not just buying stories. We’re pricing the structures first, estimating fair value, and then trying to enter at discounts to that fair value. We want bullish exposure here, but we still want to be disciplined about what we pay.
Today’s First Top Names Trade
Non-Middle Eastern energy theme
