Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Trade Alert: Top Names + Chips
Why We Do This
Before we get to our current top names trade, let’s look again at how our top names from six months ago have performed since.
Screen capture via the Portfolio Armor website.
A rule of thumb looking at those stock returns is that a double digit return in an underlying stock can lead to a triple digit return in options. For example, we have an open trade on Robinhood (HOOD 5.13%↑) that is up about 626% so far. That’s why we place options trades on our top names.
Today’s Top Name Trade
Today’s top names trade is on our #2 name from Thursday night, a chip stock. Taiwan Semiconductor’s (TSM -1.06%↓) earnings on Thursday suggested the chip sector still has some big tailwinds from AI, and our chip stock should be positioned to benefit from it. Before we get to it, a warning.
Stocks Might Fall 30% to 40% This Year
That warning was from volatility trader Cem Karsan yesterday. Ordinarily, I’d take these sorts of warnings with a grain of salt, but Karsan recently predicted to the day when the post-election gap up in the market would get filled (on January 13th).
In light of Karsan’s warning, it may be prudent to add some downside protection here. A simple way to do that is to take the dollar amount of your stock portfolio, divide it by the current price of SPY 1.14%↑, round that number up to the nearest hundred, and enter that number in the “shares owned” field on the Portfolio Armor hedging app. Then you can enter the maximum drawdown you’re willing to risk, tap “Find Optimal Hedge”, and you’re on your way.
You can download the Portfolio Armor optimal hedging app by aiming your iPhone camera at the QR code below (or by tapping here, if you’re reading this on your phone).
Back To Our Chip Stock Trade
If we’re right on this one, our maximum upside will be about 245%; if we’re wrong, we could lose up to 100%.
Details for subscribers below the paywall here.
If you’d like to stay in touch
You can scan for optimal hedges for individual securities, find our current top ten names, and create hedged portfolios on our website. You can also follow Portfolio Armor on X here, or become a free subscriber to our trading Substack using the link below (we’re using that for our occasional emails now).
The End Of The 60/40 Portfolio
Options Trading
How We Turn Volatility into Opportunity
As a lifelong member of the Sloper community, I’d like to begin with a heartfelt thank you to Tim and to all of you for creating a space where ideas flourish and market challenges are faced head-on. Being part of this group has been a privilege, and I continue to learn from the wisdom and camaraderie shared here. This shared wisdom has reinforced an important truth: volatility, while daunting to some, is often where the greatest opportunities lie for those willing to embrace it. It’s remarkable how many traders—some of them seasoned professionals—hesitate when faced with volatile markets. But the truth is, these conditions often present the greatest opportunities.
(more…)AXON Bear Call Spread Breakdown
Risk, Reward, and Position Sizing
Yesterday Tim offered a potential trade opportunity in Axon Enterprise (AXON). Here is the post for reference: Axon Trade Today, I want to share an alternative way to trade AXON—one that a professional options trader might consider when leveraging Tim’s expert technical analysis
A bear call spread, also known as a short call vertical spread, is one of my go-to strategies in options trading, primarily because of its defined risk and flexibility. As the name suggests, it’s a bearish strategy, but it doesn’t require the underlying stock to move lower to be profitable. Unlike buying or selling stocks, where outcomes are binary—up or down—a bear call spread can generate returns if the stock price stays flat, moves slightly higher, or declines. This versatility makes it a valuable tool for traders who want to align their positions with probabilities rather than predictions.
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