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Trading The Blockade

Portfolio Armor's Photo
by Portfolio Armor
Saturday, May 02, 2026 - 12:16

An anthropomorphic bull and bear profiting despite the naval blockade.

Trading The Blockade

Peace didn’t break out this week, but stocks did. 

So this week, we kept trading the blockade—by looking for companies tied to the physical bottlenecks intensified by the blockade, as well as by the AI buildout. 

That included trades on advanced materials and electrical infrastructure, 

American liquid natural gas and optical networking, 

Western hemisphere fertilizer, oil, specialty chemicals, and semiconductor testing, 

And more North American oil, specialty energy, AI-related optical packaging, and a biotech moonshot. 

The common thread is that this market is rewarding companies connected to real-world constraints: energy flows, fertilizer inputs, refining capacity, optical networking, and the broader semiconductor supply chain.

This is the kind of market where options structures can be useful. We can get bullish exposure to the themes we like while defining our downside, harvesting premium where implied volatility is high, and walking away when the price isn’t right.

The Physical World Still Matters

One of the themes we’ve been leaning into is that the market is rediscovering the physical world. That point got reinforced again this week, as the hyperscalers continued to signal massive AI infrastructure spending.

That matters because the AI trade is also an electricity trade, a cooling trade, an optical-networking trade, a semiconductor-equipment trade, a construction trade, and, increasingly, a materials trade. The blockade theme and the AI-infrastructure theme may look unrelated at first glance, but both point in the same direction: real-world bottlenecks are back.

The Week’s Exits

This week’s exits were a good illustration of that process working.

We had 13 options exits, all profitable. Some were routine financing-leg exits: put spreads on Bunge Global, Camtek, Enova International, and dLocal came off for high-double-digit gains on premium collected. Those aren’t flashy exits, but they’re important. Taking those put spreads off reduces risk and lets the bullish side of the trade keep working.

We also had several short calls in hybrid combos collapse enough for us to buy them back cheaply. That happened with Babcock & Wilcox, Freeport-McMoRan, Robinhood Markets, and Frequency Electronics. Those exits locked in 86% to 96% gains on the short calls and, just as importantly, restored uncapped upside on the remaining long calls.

Then there were the bigger exits. Applied Materials gave us a 102% gain on a diagonal calendar spread. SLB gave us a 174% gain on a hybrid combo tied to the oilfield-services / Gulf reconstruction theme. USA Rare Earth turned into a 280% winner. Vistance Networks—formerly CommScope Holding—turned into a 604% winner. And Dycom Industries closed as a 735% winner.

The full list is below, as usual.

Don’t Squeeze Every Last Dollar

The Dycom Industries exit is worth dwelling on for a moment.

We exited its call spread at $24 on a $30-wide spread. That’s the same basic idea as our usual target of around 80% of max width. Could we have tried to squeeze out a few more dollars? Sure. But that’s not the point. The point is to harvest the bulk of the gain before time, volatility, or a reversal can take too much of it back.

That rule helped us dodge one bullet this week.

Last week, we exited our Rambus call spread at $16 on a $20-wide spread. That gave us a 953% gain on the trade, and it got us out before Rambus tanked after earnings this week. We didn’t need to predict the post-earnings drop. We just needed to follow the rule: when a call spread has given us most of what it can reasonably give us, take the win.

That sounds obvious after the fact. It’s harder to do in real time, because greed always has an argument. But rules are there to save us from our own best-sounding rationalizations.

Dodging Bullets

The second bullet we dodged this week was POET Technologies.

We’d looked at it as a potential trade idea because it fit the broader AI / optical / photonics theme we like. But it failed our Relative Strength Index + Chartmill Setup rating discipline. Its setup rating was around 1, when we generally look for one of 5 or higher, indicating some recent price consolidation. 

So we passed.

Then the stock got cut roughly in half after the company lost a major contract because of a confidentiality-agreement violation. Again, we didn’t need to predict the news. We just needed to respect the rule that kept us out.

That’s the point of screens such as RSI + Setup. They’re not magic. They don’t tell us every future headline. But they help keep us from forcing trades in names where the chart is already warning us that something is wrong.

Process Beats Prediction

That was the real lesson this week.

We didn’t know Rambus would fall after earnings. We didn’t know POET would lose a major contract. We didn’t know exactly how the latest Iran proposal would hit oil and volatility on Friday.

But we did have rules:

  • Exit call spreads around 80% of max width instead of getting greedy.

  • Don’t force trades that fail our RSI + Setup discipline.

  • Use options structures with defined risk.

  • Harvest financing legs when the risk/reward has shifted.

  • Buy back short calls in hybrids when they collapse, restoring uncapped upside on the remaining long calls.

Those rules won’t make every trade a winner. Nothing will. But this week they gave us 13 profitable exits out of 13, including several triple-digit gains and two exits above 600%.

The market is still trading through war headlines, blockade headlines, AI capex headlines, earnings reactions, and violent single-stock moves. That’s exactly the kind of environment where process matters most.

We’ve posted the full list of this week’s exits below, starting with the worst first, as usual, in the interest of full transparency.

We've posted our full list of this week's exits below, starting with the worst first, as usual, in the interest of full transparency. 

But first, if you want a heads up when we place our next trade, you can sign up for our trading Substack/occasional email list below.

Trades We Exited This Week

(We also log these exits in this spreadsheet). 

Stocks or Exchange Traded Products

None.

Options

  1. Put spread on dLocal (DLO -1.47%↓). Entered at a net credit of $0.55 as part of a 4-leg hybrid combo on 3/27/2026; exited at a net debit of $0.12 on 4/27/2026. Profit: 78% (return on max risk: 17%). Signal: Market Watchers.

  2. Short calls on Babcock & Wilcox Enterprises (BW -6.78%↓). Sold-to-open at $1.42 as part of a 4-leg hybrid combo on 4/6/2026; bought-to-close at $0.20 on 5/1/2026. Profit: 86%. Signal: Market Watchers.

  3. Put spread on Bunge Global (BG -1.71%↓). Entered at a net credit of $1.49 as part of a 4-leg combo on 3/20/2026; exited at a net debit of $0.20 on 4/30/2026. Profit: 87% (return on max risk: 37%). Signal: PA Top Names.

  4. Put spread on Camtek (CAMT 1.13%↑). Entered at a net credit of $1.63 as part of a 4-leg combo on 4/6/2026; exited at a net debit of $0.20 on 4/27/2026. Profit: 88% (return on max risk: 38%). Signal: PA Top Names.

  5. Put spread on Enova International (ENVA 0.00%↑). Entered at a net credit of $1.70 as part of a 4-leg combo on 2/6/2026; exited at a net debit of $0.20 on 5/1/2026. Profit: 88% (return on max risk: 45%). Signal: Chartmill.

  6. Short call on Freeport-McMoRan (FCX -1.64%↓). Sold-to-open at $3.79 as part of a 4-leg combo on 2/4/2026; bought-to-close at $0.20 on 4/28/2026. Profit: 95%. Signal: Me (Macro).

  7. Short call on Robinhood Markets (HOOD -0.37%↓). Sold-to-open at $3.98 as part of a 4-leg hybrid combo on 3/5/2026; bought-to-close at $0.15 on 4/29/2026. Profit: 96%. Signal: Market Watchers.

  8. Short call on Frequency Electronics (FEIM 6.91%↑). Sold-to-open at $4.85 as part of a 4-leg hybrid combo on 2/11/2026; bought-to-close at $0.20 on 4/29/2026. Profit: 96%. Signal: Market Watchers.

  9. Diagonal calendar spread on Applied Materials (AMAT -0.06%↓). Entered at a net debit of $8.50 on 3/24/2026; exited at a net credit of $17.15 on 4/30/2026. Profit: 102%. Signal: PA Top Names.

  10. 4-leg hybrid combo on SLB (SLB 0.67%↑). Entered at a net debit of $1.90 on 3/20/2026; exited the put spread at a net debit of $0.20 on 3/30/2026; exited the calendar at a net credit of $5.40 on 5/1/2026. Profit: 174% (return on max risk: 56%). Signal: Market Watchers.

  11. 3-leg combo on USA Rare Earth (USAR 3.50%↑). Entered at a net debit of $2.45 on 12/4/2025; sold half of the calls at $10.00 on 1/23/2026; exited the put spread at a net debit of $0.20 on 4/17/2026; sold the other half of the calls at $9.00 on 5/1/2026. Profit: 280% (return on max risk: 154%). Signal: PA Top Names.

  12. 3-leg combo on Vistance Networks (VISN -7.03%↓), formerly CommScope Holding (COMM). Entered at a net debit of $0.60 on 9/26/2025; exited the put spread at a net debit of $0.20 on 10/30/2025; sold half of the calls at $3.00 on 11/20/2025; sold the other half of the adjusted VISN calls at $5.85 on 4/30/2026. Profit: 604% (return on max risk: 139%). Signal: PA Top Names.

  13. 4-leg combo on Dycom Industries (DY 4.15%↑). Entered at a net debit of $2.85 on 11/3/2025; exited the put spread at a net debit of $0.20 on 11/19/2025; exited the call spread at a net credit of $24.00 on 5/1/2026. Profit: 735% (return on max risk: 163%). Signal: PA Top Names.

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