Trade Alert: Four Trades After A Two-Day Shakeout
Using defined-risk options structures to lean into metals, credit, and chips—and fade one shaky GLP-1 story
Four Trades After A Two-Day Shakeout
As I mentioned yesterday, in this tape I’ve been tightening up my entries: I now want both (a) RSI in our preferred range and (b) a higher Chartmill setup score before I put on fresh risk. The idea is simple: if the market is going to keep punishing crowded growth and high-beta names, I want any new exposure to start from a cleaner technical base, not a falling knife I happen to like fundamentally.
Applying These Rules Across Sectors
This applies to everything from metals and industrials to financials and semis, and it extends to names coming from my “cheap-but-not-broken” value screen as well. Good fundamentals and a low PEG are nice, but in this environment I want the tape at least cooperating with me on entry, not fighting me.
Applying Them To Today’s Trades
Today’s trades reflect that more selective approach and the current volatility regime. We’re leaning into defined-risk options structures that let us:
Harvest elevated near-term volatility with short legs that can decay or get taken out early if we get a sharp move;
Keep longer-dated upside (or downside) exposure in place for the underlying theses; and
Cap the downside so a bad tape or a bad print doesn’t turn into an open-ended problem.
Below, you’ll see four examples of that:
A metals producer that sits at the intersection of industrial demand and the current move in resource names.
A specialty lender that screens well on both quality and value factors.
A high-performance analog/RF and optical chip name levered to data-center and communications capex.
And, on the other side of the ledger, a defined-risk bearish structure on a telehealth/GLP-1 name that some of the sharper biotech accounts I follow see as over-promising on the science and under-pricing the risks—at a time when regulators are starting to talk more openly about cracking down on “copycat” weight-loss offerings.
Using Elevated Volatility To Our Advantage
In all four cases, the goal is the same: use this volatility to our advantage with capped risk, rather than letting the tape bully us into either chasing breakouts or panic-selling good themes at the wrong time.
Full details on all four trades below. Let’s make some money.
Today’s Top Names Trade
Aluminum / reindustrialization theme
