CMP Forecast + Trading Strategies


Bullish Case: Positive potential in long-term price stabilization with a recovery in lithium project advancements, minimal downside risk on historical return surface.


Bearish Case: High volatility and ongoing legal issues pose downside risks; historical returns indicate a prevalence of negative returns over holding periods, compounded by legal uncertainties.


Potential Outcomes: 20% positive lithium developments; 40% status quo drifting; 40% due to operational/legal setbacks. Returns are skewed toward minimal gains and significant declines.


Trading Oracle: Initiate a bearish short volatility strategy given flat term structures and high implied volatilities. Sell near-term OTM calls, preferably a credit spread targeting the $15 strikes with August expirations, maximizing on elevated premiums. Use short-term outlook, maintaining a 70-day horizon to leverage high volatility skew.


July 17, 2024


Compass Minerals International Forecast

CMP      Compass Minerals International











Correlated Assets

Assets that tend to move strongly with CMP



VFC Forecast + Options Trading Strategies   VFC  VF (0.86)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.85)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.39)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.83)



Uncorrelated Assets

Assets with little price relationship to CMP



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.39)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.83)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.85)


VFC Forecast + Options Trading Strategies   VFC  VF (0.86)



Anticorrelated Assets

Assets that tend to move strongly against CMP



VFC Forecast + Options Trading Strategies   VFC  VF (0.86)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.85)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.39)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.83)





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