Trade Alert: Old Friends, New Structures
Revisiting a 300%+ space winner and a newly validated biotech multibagger.
Old Friends, New Structures
Last year, one of the more entertaining rides in our Top Names list was a space stock building a satellite-to-cellular network—cell towers in orbit that talk directly to ordinary smartphones on the ground. It went from “interesting science project” to live voice and data calls from space with major mobile carriers, and we caught it early on its last run out of our top ten, closing that trade for a 300%-plus gain.
Since then, the story has kept moving: more test satellites, more coverage being turned on, and more carriers looking at this as a way to plug coverage gaps without building towers in the ocean or the desert. After a big run and a pullback, the stock is back in Portfolio Armor’s Top Names list again, this time with a cleaner technical picture—strong uptrend, but not yet in blow-off territory.
The temptation with a story like that is to just grab calls near the midpoint and hope the narrative bails you out. Instead, for today’s Top Names trade on this stock, we treated the structure like a piece of equipment: a standard four-leg combo whose value we can actually measure. Using current implied volatilities on the calls and puts, we ran a Black-Scholes calculation on the full package to estimate a fair value for the combo, and then set our limit order at a meaningful discount to that—enough of a margin that if we don’t get filled, we’re fine with it. We get exposure to the upside if the market comes to us, but we’re not going to chase a wide spread in a name that can trade like a meme on headline days.
A Follow-On In Diagnostics
The second trade today is from our Multibaggers list—a name we’re already in the black on from a combo we opened last fall. It’s in the precision oncology and diagnostics lane, and the big development this week was Medicare coverage for one of its personalized tests in lung cancer. That follows earlier coverage in another major indication and moves this platform further into the center of standard care instead of the fringes.
That kind of incremental de-risking is what you want to see in a speculative name: not just a cool slide deck, but a payer agreeing to reimburse a specific test in a big population. It doesn’t eliminate execution risk—they still have to scale, defend their moat, and expand into other cancers—but it tightens the link between the science and actual revenue.
Because we already have exposure there and that original trade still has a couple of months to run, today’s move is a follow-on: a second, longer-dated combo that pushes our time horizon out past mid-year. Again, we started with the structure we wanted (a multi-leg combo that gives us more upside participation without taking naked downside) and then used Black-Scholes with the current IVs on each leg to come up with a fair value for that whole package. Only after we had that fair value did we decide what max net debit we were willing to pay and set our limit below fair—and now we’re going to leave the order open long enough to give the market a chance to meet us.
In both cases—the space name out of our Top Names list and the diagnostics name out of our Multibaggers list—the process is the same:
Start with the idea (theme, fundamentals, technicals).
Decide on the structure that fits the idea.
Price the structure with Black-Scholes so we’re not flying blind on what it’s worth.
Then, and only then, pick a max net debit that gives us asymmetric payoff without overpaying for volatility.
In the paid section, I’ll walk through the exact structures we’re using for both trades, the max gains and max losses in each case, and my preset exit plans so we can keep most of this on autopilot.
Today’s Top Names Trade
Satellite-to-cellular space theme
