Sea Of Red
The Risk Of Buying Here
Before we get to today’s trades, a brief note about the risk of buying here. Despite the market’s drop, volatility is relatively low, suggesting we aren’t close to capitulation here. And if the market keeps grinding down, that is going to be bad for most of our bullish trades.
That said, there are two points working in our favor here:
Markets don’t go down (or up) in a straight line. So we have the potential to make money buying on a dip and selling on a bounce (and vice versa).
Even in this market, stocks that beat earnings significantly have spiked after they reported.
Today’s Stock
Today’s stock was one of Portfolio Armor’s top ten names on Friday. Readers may recall we’ve had some success placing bullish short term bets on PA top tens during market drops...
Calls on Delta Air Lines (DAL 1.13%↑). Bought for $1.70 on 2/21/2025; sold for $2.02 on 2/26/2025. Profit: 19%.
Calls on Up Fintech Holding (TIGR 9.51%↑). Bought for $0.39 on 2/24/2025; sold for $0.82 on 2/26/2025. Profit: 110%.
Calls on Robinhood Markets (HOOD 4.26%↑). $48.50 strike. Bought for $1.43 on 2/25/2025; sold (half) for $3 on 2/26/2025. Profit: 110%.
Calls on Oklo (OKLO 8.48%↑). Bought for $1.40 on 2/25/2025; sold (half) for $3 on 2/26/2025. Profit: 114%.
Calls on Robinhood Markets (HOOD 1.14%↑), $45 strike. Bought for $1.46 on 3/4/2025; sold for $3 on 3/5/2025. Profit: 105%.
But also some losses:
Calls on Robinhoood Markets (HOOD -1.11%↓), $48.50 strike. Bought for $1.43 on 2/25/2025; (second half) expired worthless on 3/7/2025. Loss 100%.
Calls on Oklo, Inc. (OKLO -0.49%↓). Bought for $1.40 on 2/25/2025; (second half) expired worthless on 3/7/2025. Loss: 100%.
In addition, this stock looks oversold, with an RSI of about 28, but as you may recall from our last Exits post, oversold stocks can still go lower. Chartmill gives it an overall technical rating of 8 and an overall fundamental rating of 6—better scores than any of our other top names from Friday.
S&P Global Market Intelligence seems to be slightly more bullish on it fundamentally,
As are the most accurate Wall Street analysts, with LSEG Starmine giving it an 8.7 out of 10 (S&P and Starmine data via Fidelity).
We’ve got two trades on it today, a short term, speculative trade betting on a bounce this week, and an earnings trade going out to late April. The maximum upside on the short term trade is uncapped, and the maximum upside on the earnings trade is about 300%. The maximum loss in both cases is 100%.
Subscribers to the Portfolio Armor trading Substack can check their inboxes for the details of these trades; non-subscribers can subscribe below.
Limiting Your Downside Risk
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