BIG Forecast + Trading Strategies


Bullish Case: Big Lots may attract bargain hunters as economic conditions heighten demand for discount retail. If successful in acquiring Bed Bath & Beyond customers, this could enhance revenue and market presence, supported by potential operational improvements.


Bearish Case: Ongoing store closures and bleak sales forecasts threaten Big Lots' survival. With significant debt and a deteriorating market position, the risk of bankruptcy looms, further exacerbated by a decline in consumer spending and rising prices.


Potential Outcomes:

1. Store closures lead to a 40% chance of bankruptcy (60%).

2. Consumer interest shifts to discount stores improves revenue (30%).

3. Acquired customers from competitors boost sales (25%).

4. Failure to adapt results in continued losses (50%).


Trading Oracle: Implement short-term bullish debit spreads, buying $1.50 call options and selling $2.00 calls. This capitalizes on volatility and potential price recovery over the next month, offering high probability-of-profit with solid risk-reward balance amidst market uncertainty.


July 24, 2024


Big Lots Forecast

BIG      Big Lots











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ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.57)



Uncorrelated Assets

Assets with little price relationship to BIG



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.56)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.57)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.69)


VFC Forecast + Options Trading Strategies   VFC  VF (0.83)



Anticorrelated Assets

Assets that tend to move strongly against BIG



VFC Forecast + Options Trading Strategies   VFC  VF (0.83)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.69)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.56)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.57)





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