Trade Alert: From Defense To Selective Offense
After hedging against the current war, we're shopping for bargains.
Hedging A Shooting War, Then Going Shopping
In our previous post, War With Iran, we talked about the two-step playbook for investors when geopolitical risk goes from “headline noise” to missiles in the air:
Hedge first, while volatility is still relatively cheap (for us, via that VIX call spread we put on two weeks ago), and
Then look for selectively mispriced opportunities once the shooting starts and markets gap around the headlines.
The shooting started over the weekend, of course, and volatility has spiked about 11% so far intraday—not enough to warrant taking profit on our hedge yet, but it’s good to have in case the situation deteriorates further.
From Defense To Selective Offense
The second-best time to hedge is always “right now,” and readers who haven’t done that yet can still use the Portfolio Armor website or iPhone app to scan for optimal hedges on their own stocks or ETFs today. Those hedges will likely be a little more expensive than they were before the war headlines, but our system will still look for the least expensive ways to get the level of protection you want.
At the same time, we’re not going to sit in pure defense. Our option structures—especially the financed call combos and hybrid 4-leg setups with short near-dated premium—have held up well in a whipsaw tape. As we went over in Friday’s Exits post, those structures gave us:
Defined downside on our themes, and
Chunky realized gains from buying-to-close short call legs and exiting put spreads into volatility spikes.
We expect that pattern—volatility spikes creating income on the short legs while the long calls keep working—to continue as markets digest the war.
A Top Name That Fits Our Playbook
One of the names at the top of Portfolio Armor’s list on Friday is a mid-cap semiconductor company that doesn’t design chips—it packages and tests them. It sits in the “picks and shovels” layer of AI and high-performance computing: the outsourced assembly and test work that has to happen before any fancy accelerator or CPU makes it onto a board in a data center or device.
It also fits a theme we’ve leaned into for months: reindustrialization and supply-chain resilience. Advanced packaging has become a strategic chokepoint, and this company is a key player in that part of the value chain. You don’t have to pick the exact AI model winner if you’re getting paid on the volume of chips passing through the plumbing.
Technically, the stock checks our tightened entry filters:
An RSI (Relative Strength Index) between 40 and 70, and
A setup score of 6 or higher Chartmill
Given the war headline risk, we’re using our preferred structure for this environment: a 4-leg hybrid combo that finances a farther-dated call with nearer-dated short premium and a put spread floor.
Full details below.
Today’s Top Names Trade
(AI hardware packaging / reshoring theme)
