Trade Alert: Still Not 1999
Bullish options bets on five names that sit at the intersection of AI infrastructure, semiconductor bottlenecks, and disciplined technical setups.
Still Not 1999
Our previous free post made the broader point: the clever AI-bubble take keeps running into actual orders, revenue, earnings, contracts, and infrastructure buildout.
The 1999 analogy sounds smart until you look at where the money is actually flowing: servers, power, grid equipment, optics, networking, semiconductors, data-center infrastructure, defense, automation, and the suppliers sitting in the middle of those bottlenecks.
So today we’re doing what we said we’d do there: getting back to work.
We’re not buying “AI” as a slogan. We’re looking for names where the story, the screens, and the setup line up. Today’s trades came from our Market Watchers X list → Chartmill workflow, which is one of the ways we turn promising themes into actual trade candidates.
From Watchlist To Setup
Market Watchers starts with the human side of the process. We put alerts on names that savvy traders have highlighted, but only when we agree with the underlying thesis. That gives us a curated list of stocks with a reason to be on our radar, rather than a random list of tickers chasing momentum.
Chartmill gives us the discipline layer. It lets us know when those names pass our RSI and Setup screens. RSI—Relative Strength Index—helps us avoid names that are already too extended or breaking down, while the Chartmill Setup score helps us avoid names that are still too sloppy technically.
The goal is to find names in our “just right” zone: not stretched so far that we’re simply chasing, but not falling apart either. We want stocks with a live theme, constructive technicals, and enough room for the options structure to make sense.
Structuring The Trades
Once a name passes that process, the next question is structure. We’re not just buying calls and hoping. We’re trying to minimize cost and maximize our potential upside while staying within our risk budget.
The structure depends on the stock. If a name has the potential to move sharply, we try not to sell away too much upside. If the options market gives us attractive financing, we use that.
Pricing The Edge
The last step is pricing. Before placing these trades, we use Black-Scholes to price the full structure leg by leg, using the current stock price, expiration, dividend yield (when there is one), and each option’s implied volatility.
That gives us an IV-based fair value for the package. Then we set the alert price so we’re getting in at a good price relative to fair value. If the trade fills at or better than our price, great. If it doesn’t, we move on. Plenty of fish in the sea.
One of today’s trades is a follow-on trade in a name where our current trade is already deep in-the-money. That’s the kind of existing exposure we don’t mind revisiting: the earlier trade is working, the current setup still passes our screens, and the new trade lets us capture higher potential upside, with a longer runway.
Another of today’s trades is on a name that has been a winner for us before, and it’s back in the zone now. That doesn’t mean we force it; it means we’re willing to revisit a strong theme when the setup and pricing line up again.
Back To Work
That’s the process: find strong themes, wait for names to enter the “just right” zone, structure the trades to define risk, and price them against fair value before we place them. Then once the trades fill, we immediately place our exit orders. That way, if the trades work, the profits start hitting our accounts automatically, giving us fresh cash to repeat the process.
Today’s First Market Watchers Trade
AI infrastructure / high-short-interest theme
