Price Forecast:

Bullish Case: Arcosa's strategic positioning in infrastructure could leverage new government investment, driving up demand and profitability, reflected in rising historical returns in the options market.

Bearish Case: Political uncertainties and potential changes to the ACA could threaten profitability, leading to increased market volatility and high implied volatility in puts, signaling bearish sentiment.

Potential Outcomes:

1. 60% chance of mild gains post-infrastructure spending announcement driven by positive sentiment.
2. 25% chance of neutrality driven by market uncertainty around regulatory changes.
3. 15% chance of declines linked to bearish policy shifts impacting investments.

Trading Oracle: Consider executing a bullish debit spread by buying January 100 calls and selling 105 calls. The current high implied volatility, although tapering, suggests favorable returns on volatility spikes for $ACA. This leverages current protective structures against downside risks. Monitor regulatory sentiments closely for dynamic adjustments.

December 20, 2024