BTI Forecast + Trading Strategies


Bullish Case: British American Tobacco (BTI) shows potential for a bounce-back with strong dividend yields and increasing adoption of non-combustible products fueling future growth. The upcoming earnings report may further reflect improvement in market positioning.


Bearish Case: BTI faces significant challenges from declining traditional cigarette volumes and intense regulatory scrutiny. Continued penetration of non-combustibles may not compensate for the revenue losses, risking further stock depreciation.


Potential Outcomes:

1. Increased regulatory pressure leading to operational hurdles: 35% probability.

2. Recovery in share price driven by effective new product strategies: 45% probability.

3. Sustained declines in cigarette sales overshadowing gains from new categories: 20% probability.


Trading Oracle: Adopt a bear put spread selling the $34 put and buying the $32 put for August expiration, capitalizing on high implied volatility (25.9%) and downward earnings pressure. This strategy reduces risk while positioning for potential moderate declines, with an anticipated high reward-to-risk ratio and a strong probability of profit.


July 25, 2024


British American Tobacco Forecast

BTI      British American Tobacco











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ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.2)



Uncorrelated Assets

Assets with little price relationship to BTI



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.13)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.2)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.27)


VFC Forecast + Options Trading Strategies   VFC  VF (0.28)



Anticorrelated Assets

Assets that tend to move strongly against BTI



VFC Forecast + Options Trading Strategies   VFC  VF (0.28)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.27)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.13)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.2)





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