DBA Forecast


Bullish Case: The DBA volatility surface shows elevated implied volatility, suggesting increased uncertainty paired with potential bullish sentiment. If agricultural prices recover, the historical tendency for mean-reversion may strengthen.


Bearish Case: The market uncertainty surface indicates rising volatility compared to helium expectations, signaling potential risk. Additionally, substantial put volume suggests bearish sentiment, particularly if agricultural demand remains weak.


Potential Outcomes:

1) 30% chance of 10%+ return driven by demand shocks.

2) 40% stagnation due to consistent volatility levels.

3) 30% decline if macroeconomic factors negatively impact prices.


Trading Oracle: Engage in bullish debit spreads on DBA with strike prices at $25-$26, leveraging high implied volatility (up to 171.9%). Focus on the short-term horizon of one month to capture mean-reversion and capitalize on potential price rebounds. This strategy exploits high volatility while managing risk effectively.


July 24, 2024


Invesco DB Agriculture Forecast

DBA      Invesco DB Agriculture











Correlated Assets

Assets that tend to move strongly with DBA



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.69)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.64)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.54)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.77)



Uncorrelated Assets

Assets with little price relationship to DBA



LI Forecast + Options Trading Strategies   LI  Li Auto (-0.54)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.64)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.69)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.77)



Anticorrelated Assets

Assets that tend to move strongly against DBA



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.69)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.64)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.54)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.77)





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