Trade Alert: Top Names + China

Bullish bets on two of our top ten names from last night—one a Chinese ADR, and the other a high-beta U.S. name—both stocks we've exited profitable trades on more than once this year.

Two setups from Tuesday’s PA Top Names

Two of Tuesday’s Portfolio Armor Top Names lined up for our playbook today. We’ve traded both earlier this year—multiple times—with profitable exits, and under our process that recurring appearance on the Top Names list gives us “license” to go back to the well when the structure and tape cooperate. See the “Process” note here:

Why now (macro + tape)

• Pullback = pricier protection: September softness has pushed implied vol higher, letting us finance calls with put premium on quality screens rather than chase deltas outright.

• Runway, not roulette: Today’s trades don’t expire until November, so we can harvest elevated IV now while still giving the market time to resume the broader uptrend if the pullback persists a bit. This expiration date also gives us time for the next catalysts (earnings) to hit on these names.

• Thematic context: One setup is tied to a policy-supported China exposure (helped by ongoing liquidity and market-support initiatives, but with the usual policy/volatility caveats). The other is a U.S. high-beta turnaround where execution and sentiment swings tend to move IV in our favor.

What we put on (high level)

• Today’s First Top Names Trade: This is on the China name. it requires a ~12% move to break even, but has ~300% potential upside. Max risk on one contract is about $600.

• Today’s Second Top Names Trade: The high-beta U.S. name. On this one, our break even is about ~2% below the current share price. The potential upside on this one is ~170%. Max risk on one contract is about $700.

Paid subscribers: full details—strikes, expirations, target fills, and exit orders—are below the fold.

Today’s First Top Names Trade