DAWN Forecast


Bullish Case: DAWN’s recent acquisition of DAY301 and the strong pipeline expansions, coupled with high implied volatility, suggest potential for significant price appreciation.


Bearish Case: High volatility and current geopolitical tensions could lead to further market uncertainty, impacting DAWN negatively. Recent price action is flat, showing limited upside momentum.


Potential Outcomes: FDA approvals (30%), biotech sector rally (25%), clinical setbacks (15%), geopolitical impacts (20%), flat price action (10%). Conditions and models from historical price and volatility surfaces.


Trading Oracle: Short volatility via August $13/$10 bull put spread with a 1:3 risk:reward ratio, leveraging near-term backwardation. This strategy benefits from current implied vol skews and aims to exploit DAWN's high volatility for a profitable, high probability of profit setup over a 30-45 day outlook.


July 21, 2024


Day One Biopharmaceuticals Forecast

DAWN      Day One Biopharmaceuticals











Correlated Assets

Assets that tend to move strongly with DAWN



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.56)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.33)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.26)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.31)



Uncorrelated Assets

Assets with little price relationship to DAWN



LI Forecast + Options Trading Strategies   LI  Li Auto (-0.26)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.31)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.33)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.56)



Anticorrelated Assets

Assets that tend to move strongly against DAWN



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.56)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.33)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.26)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.31)





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