Protecting Your Portfolio From Days Like This
An Earnings Shock In Real Time
Intel (INTC) fell 25% and Amazon (AMZN) almost 7% before Friday’s open, according to the 9:23 a.m. ET market update. Earnings and guidance had put two major names at the center of another technology selloff.
Intel’s quarterly results show the tension: revenue rose 21% to $16.5 billion, and data-center and AI revenue jumped 78%. Its fourth-quarter revenue forecast was $15 billion to $16 billion, and management expected the PC slowdown to continue at least through the first half of 2027. Investors had to weigh strong recent growth against a weaker outlook.
An earnings gap can reprice a position before regular trading begins. That makes the amount you’re willing to lose a useful starting point for portfolio construction. Stock selection and protection belong in the same investment plan.
Choose A Loss Limit
A protective put establishes downside protection for the position it covers. A collar helps fund that protection by selling a call, which limits upside. The practical choice depends on the decline you want to protect against and the upside you’re willing to exchange for a lower hedging cost.
Our optimal-hedging tool takes your stock or ETF, share count and maximum acceptable decline, then searches for the least-expensive qualifying puts or collars. You see the contracts and protection cost before placing the trades in your own brokerage account. Position hedging is included with both Basic and Premium subscriptions on the Portfolio Armor website, shown below.
Our iPhone app also finds optimal puts; optional in-app access adds optimal collars. Tap the illustration at the top to see the app.
Build Selection And Protection Together
Our Hedged Portfolio Method combines Top Names and optimal hedging. Premium’s construction tool starts with your investment amount and maximum acceptable decline, then selects and hedges positions to maximize expected return after protection costs.
You receive the shares and option contracts for the complete portfolio, with its maximum loss and return estimates. Selection, sizing and protection work together around your chosen risk limit. Maintain the specified positions and hedges to keep that protection in place.
Understand The Return Tradeoff
Our Substack trading is the most aggressive approach. Unhedged Top Names stocks offer the next step down in upside and risk. The Hedged Portfolio Method trades some upside for a selected loss cap.
The comparison below draws on our full trading record, Top Names record and hedged-portfolio record. The annualized figures illustrate those distinct historical records.
For trading, the annual illustration assumes equal-risk capital continuously redeployed, using completed-trade gross returns on original maximum risk and average holding time. For stocks and hedged portfolios, we double the respective six-month averages; hedged-portfolio returns are net of hedging and trading costs. The records cover different periods and capital bases.
Friday’s earnings shocks bring the choice into focus: how much downside are you comfortable carrying? To protect existing holdings, start with our website or iPhone app. For a complete portfolio built around your risk tolerance, explore Portfolio Armor Premium. Choose the loss limit first, then put the protection in place.
Please share this with an investor who’d like a clearer limit on downside.