Price Forecast:

Bullish Case: EHang's share price could benefit from increasing eVTOL market interest and positive regulatory news, coupled with relatively high implied volatility signaling strong trader sentiment and potential upward price movement.

Bearish Case: Market uncertainty, reflected in high put option volumes and elevated implied volatility, raises concerns about EHang's stability, especially if economic conditions worsen or regulatory setbacks occur.

Potential Outcomes:

1. Strong quarterly earnings push prices up (+40%).

2. Continued volatility leads to profit-taking and price drop (-30%).

3. Regulatory approval or news boosts investor sentiment (+25%).

4. Market downturn affects tech stocks, leading to price decline (-15%).

Trading Oracle: Adopt a bullish strategy by initiating a debit spread: buy the $17.5 call and sell the $20.0 call, capitalizing on the anticipated market rally with positive news expected in the coming weeks. This approach offers significant profit potential with limited risk, given the high implied volatility.

November 15, 2024