Moderna: Look Out Below?

COVID vaccine maker Moderna was our top name in late August...

Screen capture via Portfolio Armor on 8/26/2021.

But it has tumbled since, down almost 17% as of Wednesday's close. 

Strong returns from the oil E&P Laredo Petroleum (LPI), Bitcoin miner Marathan Digital Holdings (MARA), and Tesla (TSLA) have helped that cohort outperform so far despite Moderna. 

Now CNBC market technician Carter Worth suggests Moderna may have more to fall. 

Of course, technical analysis isn't foolproof. Readers may recall that when Carter Worth read Bitcoin's chart last spring, he thought it was headed for $20k. Nevertheless, if you own Moderna and want to stay long, it might be prudent to add some downside protection to it. Below is a way to do so. 

Downside Protection For Moderna

As of Wednesday's close, this was the optimal (least expensive) collar to protect against a greater-than-20% drop in Moderna over the next few months, while not capping your possible upside at less than 20% over the same time frame. 

Screen captures via the Portfolio Armor iPhone app. 

The net cost of this hedge was negative, meaning you would have collected a net credit of $285 when opening it, assuming, to be conservative, that you placed both trades (buying the put and selling the call) at the worst ends of their respective spreads.