The Bears Are Back
🐻 How We’re Trading The Pullback
The bears are back at the door, but we’re not panicking. This kind of pullback is where our “Harvest IV, Define Risk” framework does its best work.
Volatility spikes, but our downside doesn’t. That’s the advantage of structuring every trade with defined risk. When the market turns against us, losses stay bounded; when it rebounds, time and volatility work in our favor. It’s the same logic that helped us outperform through last spring’s correction, and we’re applying it again now.
Turning Drawdowns Into Setups
The past week’s selloff has hit a few familiar themes—AI, energy, crypto, and especially biotech—but it’s also created opportunity. Several of the names that helped drive Portfolio Armor’s Top Names performance earlier this year are starting to reappear on the list.
We call that “re-entering winners.”
⚡️How We Re-Enter Winners⚡️
— Portfolio Armor (@PortfolioArmor) October 9, 2025
A real-world example with Robinhood Markets $HOOD.https://t.co/aZrVvXrDM3
When a stock that’s already delivered strong gains for us pulls back but still ranks highly in our system, it often sets up one of the most asymmetric trades we can make. We’ll have new trades teed up on three repeat winners on Wednesday.
Each will use the same disciplined playbook: harvest implied volatility, define downside, and let the trade work.
If you want a heads-up when we place them, you can subscribe to the Portfolio Armor Substack below.
Selectivity In A Tough Tape
Not every sector deserves fresh capital right now. The market’s been especially unforgiving toward biotech, where even companies that beat expectations and deliver strong data have been sold off hard. We saw that with Soleno Therapeutics (SLNO) on Tuesday, after it reported a top- and bottom-line beat along with encouraging clinical results, yet still dropped more than 20 percent after hours.
For now, we’re holding off on new pre-earnings biotech trades until expectations reset, but we’ll stay alert for post-earnings setups where the risk-reward improves.
Outside of biotech, pre-earnings setups can still work. Digital Turbine (APPS 23.00%↑) is a good example. We had a bullish trade on it, a risk-reversal, heading into earnings, and the stock popped nearly 23% after hours after it reported on Tuesday.
Hedging Broader Market Risk
For readers concerned about overall portfolio exposure, Portfolio Armor’s website and iPhone app can automatically hedge individual holdings or broader market risk.
For a more comprehensive approach, our hedged portfolio method combines top-ranked names with optimal hedges into a single, fully risk-defined strategy. You can read more about it below.
The Bottom Line
The bears may look confident for the moment, but pullbacks like this are part of the cycle. Our job is to stay disciplined, harvest volatility, and keep risk defined while others lose theirs.
When the bulls take the house back, as they always do, we’ll already be inside.
Wednesday Afternoon Update
We posted two trade alerts today. You can read about them by clicking on the images below.
