Trade Alert: Time Is A Bomb
A contrarian airline trade and three biotech setups with catalysts ahead.
Time Is A Bomb
I’ve borrowed the title from a track from the new Metric album.
Time is an important factor in each of today’s trades, particularly our biotechs with their catalysts ahead.
A $6 Billion Stress Test
One of today’s trades is in a major airline while the Persian Gulf conflict keeps war risk and fuel costs elevated. Its long call expires in January, giving both headwinds time to ease.
The carrier has already shown it can absorb a severe fuel shock. It grew second-quarter operating revenue by 16% year over year and raised full-year adjusted guidance to $9–$11 in earnings per share (EPS), even though it now expects nearly $6 billion in additional 2026 fuel expense versus its expectation at the start of the year.
It recovered about half of the second-quarter fuel increase through revenue and expects to recover 80%–90% in the third quarter and 100% in the fourth. If the conflict cools and oil follows before January, the company could get relief from both fuel costs and war-related route risk while its pricing catches up.
Three Biotech Clocks Are Ticking
One of today’s biotech names is already a commercial business. It generated approximately $205 million in first-quarter global revenue and raised its full-year target to approximately $925 million. Its next pivotal readout—Phase 3 data for a subcutaneous version of its approved B-cell therapy—is expected around year-end 2026 or early 2027, before our February call expires.
Another recently reported that its first Phase 3 depression study met its primary endpoint and every key secondary endpoint. It has two more Phase 3 anxiety readouts expected this quarter: one in early Q3 and another in late Q3.
The third reported a 53% overall response rate at the recommended Phase 2 dose of its lead multiple-myeloma drug. It ended March with $268.3 million in cash and investments, enough to fund operations through the end of 2028, and its expanded Roche collaboration brought in $20 million upfront.
That last name appeared in a recent alert, but our order never filled. The shares are lower now, and we’ve improved the structure: more long calls, no short call, uncapped upside and less than our usual $750 risk budget.
The Screen And The Price
Chartmill’s Technical and Setup Ratings measure trend quality and entry quality on a 0–10 scale. RSI (Relative Strength Index) is a 0–100 momentum gauge. All four names have Technical Ratings of at least 7, Setup Ratings of 6 and RSIs between 40 and 58.
We also priced every structure with Black–Scholes, Bjerksund–Stensland and Cox–Ross–Rubinstein binomial models. Each published maximum debit is at or below the most conservative model-consistent value. If the market doesn’t give us those prices, we won’t chase.
Paid subscribers will find the names, structures, maximum entry prices and exit plans below.
Today’s First Market Watchers Trade
Commercial-stage B-cell therapy / multiple-sclerosis expansion theme
RSI: 54; Chartmill Technical Rating: 9; Setup Rating: 6; Fundamental Rating: 5.
