Trade Alert: Top Names + Earnings
Bullish bets on two of our top names, one of which is reporting earnings this week.
Two New Bullish Trades From Monday’s Top Ten
We’re opening two risk-defined bullish options positions today in names that appeared in Portfolio Armor’s Top 10 last night. If you’re new here, our Top Names list has a strong long-term record; you can see the historical results here: How Our Top Names Have Performed. And you can see how our most recent Top Names cohort to finish its 6-month run has done below.
Why these two?
Both align with our ongoing macro themes—Reindustrialization, Embodied AI, and Energy/Infrastructure—that we outlined here:
Reindustrialization, Embodied AI, Energy, and Crypto
Positioning For The Next Phase: Reindustrialization, Embodied AI, Energy, and Crypto—And How We’re Trading It
One benefits from the build-out of advanced, real-world autonomy; the other is levered to next-gen compute that enables those systems. In short: they’re not meme punts; they’re tied to durable trends we’ve been tracking all year.
How we’re structuring the trades
Options are expensive in both names right now, so we’re using our trusty four-leg combo to harvest elevated implied volatility and lower our net cost and break-evens: This keeps risk defined and gives us a better probability of profit than naked calls when IV is high.
Full details including exact strikes, expirations, entry prices, break-evens, max P&L, and the GTC exit orders for both trades are below.
Today’s First Top Names Trade
The stock is AeroVironment (AVAV 0.00%↑), and our trade is a combo expiring on September 12th (the company is scheduled to release earnings after the close today), consisting of these four legs:
Buying the $240 strike call,
Selling the $250 strike call,
Selling the $230 strike put, and
Buying the $227.50 strike put,
For a net debit of $1.85. The max gain on 1 contract is $815, the max loss is $435, and the break even is with AVAV at $241.85. This trade filled at $1.85.
Today’s Second Top Names Trade
The stock is IonQ (IONQ 0.00%↑), and our trade is a combo expiring on November 21st, consisting of these four legs:
Buying the $42 strike call,
Selling the $50 strike call,
Selling the $38 strike put, and
Buying the $34 strike put,
For a net debit of $0.88. The max gain on 1 contract is $712, the max loss is $488, and the break even is with IONQ at $42.88. This trade hasn’t filled yet.
Exiting These Trades
My plan (assuming the IONQ trade fills as well):
AVAV Call Spread (legs 1 & 2): Open a GTC order to exit at a net credit of $8, and lower that price, if necessary, as we approach expiration.
AVAV Put Spread (legs 3 & 4): Open a GTC order to exit at a net debit of $0.20, and raise that price, if necessary, as we approach expiration.
IONQ Call Spread (legs 1 & 2): Open a GTC order to exit at a net credit of $6.40, and lower that price, if necessary, as we approach expiration.
IONQ Put Spread (legs 3 & 4): Open a GTC order to exit at a net debit of $0.20, and raise that price, if necessary, as we approach expiration.
AVAV missed on earnings, but beat on revenues, and had a bit of a roller coaster afterhours, trading between $216 and $244.50, before ending up at $240. Steady as she goes for now on our exit strategy; I'll recheck the Friday ATM straddle tomorrow and see if it makes sense to adjust our GTC orders.
Check that $9.03