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Price Forecast:

Bullish Case: Sutro Biopharma demonstrates potential for recovery given strong Phase II/III trial results and improving institutional interest. Historical data indicates favorable long-term returns for investors who hold over multiple years.

Bearish Case: Lack of near-term catalysts and prevailing high implied volatility may lead to further price declines. Historical trends show significant likelihood of negative returns within shorter holding windows, raising concern.

Potential Outcomes:

1. Positive trial results: 30%.

2. Additional institutional investment: 25%.

3. Continued price decline due to lacking catalysts: 45%. Events within the next quarter may shift probabilities.

Trading Oracle: Consider a bullish strategy using debit spreads by buying 11/15/2024 $5.00 calls and selling $7.50 calls. This allows leverage on bullish sentiment while managing risk amidst volatility. Stay updated on trial outcomes.

August 18, 2024