Bullish Case: Chewy's strategic expansions in veterinary services and subscription models underpin its revenue growth. The company's strong customer loyalty and recent positive momentum indicate upside potential, supported by expanding market opportunities.

Bearish Case: Chewy faces significant competitive pressures from giants like Amazon, which could curtail its growth prospects. The current flat price action and high implied volatility highlight potential risks, given uncertain macroeconomic conditions.

Potential Outcomes:

1) 55% chance Chewy capitalizes on market expansions and customer loyalty, driving growth.

2) 35% competition and macroeconomic pressures limit gains.

3) 10% market volatility impacts negatively.

Trading Oracle: Bearish Long Volatility is advantageous, given high implied volatility and competitive threats. This strategy capitalizes on potential downside risks by buying OOTM put options and enhances profit through volatility opportunities.

May 01, 2025