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Trading The Blockade

Portfolio Armor's Photo
by Portfolio Armor
Monday, May 11, 2026 - 7:44

An anthropomorphic bull and bear looking out over the Strait of Hormuz.

Trading The Blockade

Iran came back over the weekend with another proposal.

President Trump’s response was not ambiguous. He called it “TOTALLY UNACCEPTABLE.” As Reuters reported, Iran’s response called for an end to the war, the lifting of U.S. sanctions, the resumption of Iranian oil trade, and changes around control of the Strait of Hormuz. Trump’s rejection sent oil higher again, as traders marked down the odds of a quick resolution. 

So we begin another week with one of the world economy’s most important waterways effectively blockaded from both sides: Iran trying to use the Strait as leverage, and the U.S. using its own blockade as leverage to force a better deal. 

Bottlenecks Everywhere

Our approach this week is a continuation of the one we’ve been using for the last several weeks: trading the bottlenecks.

There are the obvious blockade-related bottlenecks around the Strait of Hormuz: oil, LNG, shipping, energy infrastructure, industrial inputs, and the second-order effects of higher energy costs.

And then there are the AI-buildout bottlenecks: power, grid capacity, semiconductors, optical networking, space infrastructure, and the physical inputs required to build all of it.

Those two stories may look unrelated, but they rhyme. Both are about scarcity. Both are about chokepoints. Both are about what happens when the market realizes that the digital economy still depends on physical infrastructure.

Last Week’s Blockade And AI Trades

That’s how we framed last week’s trades.

In “Power, Aluminum, And The AI Buildout,” we looked at a power / aluminum angle tied to the AI infrastructure boom and the broader reindustrialization theme:

In “Physical AI, Power Semiconductors,” we focused on the idea that the AI buildout isn’t just about software or GPUs. It’s also about power semiconductors and the physical systems needed to make AI infrastructure work:

In “Replacing Copper With Light”, we leaned into one of the most important AI bottleneck themes now: optical networking and photonics. When AI data centers get big enough, moving data efficiently becomes one of the main constraints:

And in “Space, Optical Networking”, we combined two themes that have been moving fast: public space names, helped by rising attention around the anticipated SpaceX IPO, and optical networking, one of the strongest AI-infrastructure themes in the market:

The Point Of The Structures

In all of those cases, the goal was to use options structures to get exposure to the right bottlenecks while defining the downside. Sometimes that means a 3-leg combo with uncapped upside. Sometimes it means a 4-leg combo where we use a put spread to help finance a call spread. Sometimes it means a hybrid or calendar structure where we harvest short-dated volatility to help pay for longer-dated upside.

That’s especially useful in this market, because the same headlines that create the opportunities can also create the reversals. A Strait of Hormuz headline can move oil and shipping overnight. An AI infrastructure headline can reprice semis, power names, and photonics names in a single session. A SpaceX IPO story can drag the public space names higher before most investors have built any exposure at all.

Exiting Trades

The other side of that process is taking exits when the options market gives us the opportunity.

Last week, we had a long list of exits across put spreads, short calls, calendars, and full combo exits. Some were premium-harvesting exits. Some were full triple-digit wins. One was a small loss on a max-risk basis.

The main takeaway was simple: the best trades didn’t require us to predict every geopolitical headline or every AI-stack rotation perfectly. They required us to be in the right themes, with defined-risk structures, and then take the money when the exits were there. We've appended all of last week's exits at the bottom of this post. Full transparency, as always. 

Three More Trades Teed Up

We have three more trades teed up for later today.

One is tied to a real-economy logistics theme. One is tied to photonics and optical infrastructure. One is tied to energy storage and battery technology, where the opportunity set is expanding beyond EVs into grid storage, AI data centers, drones, aerospace, defense, and other high-power applications.

If you’d like a heads-up when we place those trades, you can subscribe to our trading Substack below.

 

A Chance To Lock In Current Prices

One more note: subscription prices for the Portfolio Armor Substack are going up on Thursday, from $40 per month / $400 per year to $50 per month / $500 per year.

Current paid subscribers will be grandfathered into their current rates. So if you were considering becoming a paid subscriber, this is a good time to do so. It’s a chance to lock in the lower price before the increase.

Last Week's Trade Exits

Here's the full list of our trade exits from last week. 

Options

  1. 4-leg combo on Wolfspeed (WOLF -1.85%↓). Entered at a net debit of $0.80 on 11/4/2025; exited the put spread at a net debit of $3.73 on 3/20/2026; exited the call spread at a net credit of $4.00 on 5/7/2026. Loss: 9% of max risk (66% on premium outlay). Signal: PA Top Names.

  2. Put spread on Teva Pharmaceutical Industries (TEVA -1.57%↓). Entered at a net credit of $0.43 as part of a 4-leg hybrid combo on 3/3/2026; exited half at a net debit of $0.10 on 5/4/2026. Profit: 77% (return on max risk: 15%). Signal: PA Top Names.

  3. Put spread on Teva Pharmaceutical Industries (TEVA -1.57%↓). Entered at a net credit of $0.43 as part of a 4-leg hybrid combo on 3/3/2026; exited the second half at a net debit of $0.10 on 5/6/2026. Profit: 77% (return on max risk: 21%). Signal: PA Top Names.

  4. Put spread on Novo Nordisk (NVO -0.07%↓). Entered at a net credit of $1.22 as part of a 4-leg hybrid combo on 4/10/2026; exited at a net debit of $0.20 on 5/7/2026. Profit: 84% (return on max risk: 27%). Signal: Multibaggers.

  5. Put spread on GlobalFoundries (GFS 3.49%↑). Entered at a net credit of $1.45 as part of a 4-leg hybrid combo on 3/3/2026; exited at a net debit of $0.20 on 5/5/2026. Profit: 86% (return on max risk: 35%). Signal: Multibaggers.

  6. Put spread on iShares MSCI South Korea ETF (EWY 5.06%↑). Entered at a net credit of $1.40 as part of a 4-leg hybrid combo on 3/25/2026; exited at a net debit of $0.20 on 5/8/2026. Profit: 86% (return on max risk: 33%). Signal: PA Top Names.

  7. Put spread on Frequency Electronics (FEIM 12.03%↑). Entered at a net credit of $1.40 as part of a 4-leg hybrid combo on 2/11/2026; exited at a net debit of $0.20 on 5/5/2026. Profit: 86% (return on max risk: 33%). Signal: Market Watchers.

  8. Short call on Ouster (OUST -1.33%↓). Sold-to-open for $3.23 as part of a 4-leg hybrid combo on 11/19/2025; bought-to-close for $0.20 on 5/7/2026. Profit: 94%. Signal: PA Top Names.

  9. Calls on Opera (OPRA -0.21%↓). Bought for $1.85 as part of a 3-leg combo on 12/1/2025; sold half for $4.50 on 5/4/2026. Profit: 143%. Signal: Deep Value + Bottoming Setup.

  10. 4-leg combo on Seagate Technology (STX 0.60%↑). Entered at a net debit of $4.40 on 3/13/2026; exited the put spread at a net debit of $0.20 on 4/14/2026; exited the call spread at a net credit of $16.00 on 5/5/2026. Profit: 259% (return on max risk: 121%). Signal: PA Top Names.

  11. Calendar spread on Lumentum Holdings (LITE -1.72%↓). Entered at a net debit of $10.75 on 4/24/2026; exited at a net credit of $25.88 on 5/7/2026. Profit: 141%. Signal: PA Top Names.

  12. 4-leg hybrid combo on Intel (INTC 12.57%↑). Entered at a net debit of $1.10 on 2/18/2026; exited the put spread at a net debit of $0.20 on 4/10/2026; exited the calendar at a net credit of $4.05 on 5/7/2026. Profit: 250% (return on max risk: 44%). Signal: PA Top Names.

  13. 4-leg combo on Cognex (CGNX -1.81%↓). Entered at a net debit of $2.45 on 10/10/2025; the put spread was assigned and exercised at a net debit of $5.00 on 11/24/2025; exited the call spread at a net credit of $16.00 on 5/7/2026. Profit: 349% (return on max risk: 115%). Signal: Rare Earths Reaction Trade.

  14. 4-leg combo on Western Digital (WDC 1.16%↑). Entered at a net credit of $3.30 on 2/13/2026; exited the put spread at a net debit of $0.20 on 4/14/2026; exited the call spread at a net credit of $8.00 on 5/5/2026. Profit: 336% (return on max risk: 166%). Signal: Market Watchers.

  15. 4-leg combo on Micron Technology (MU 11.88%↑). Entered at a net debit of $2.62 on 3/3/2026; exited the put spread at a net debit of $0.20 on 4/8/2026; exited the call spread at a net credit of $16.00 on 5/5/2026. Profit: 504% (return on max risk: 173%). Signal: PA Top Names.

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