FAB Forecast


Bullish Case: The implied volatility surface shows high IV at higher strike prices, suggesting significant upside potential. Coupled with a stable historical return and trending price, FAB shows promising growth.


Bearish Case: Recent negative price action and low trading volumes on options indicate a potential downturn. The implied volatility surface's high variability suggests increased risk, making downside moves more likely.


Potential Outcomes:

1. FAB appreciates due to market confidence (40%).

2. FAB declines due to low trading volumes and high volatility (35%).

3. FAB remains stable with minor fluctuations (25%).


Trading Oracle: Trade bearish credit spreads given the high implied volatility over the next ~197 days. Execute a bear call spread (strike $79/$80) expiring at 07/19/2024. The market's high IV and recent trends increase the likelihood of profiting from premium decay.


June 30, 2024


First Trust Exchange-Traded Fund III - First Trust Multi Cap Value AlphaDEX Forecast

FAB      First Trust Exchange-Traded Fund III - First Trust Multi Cap Value AlphaDEX











Correlated Assets

Assets that tend to move strongly with FAB



IWD Forecast + Options Trading Strategies   IWD  iShares Russell 1000 Value (0.98)


IWR Forecast + Options Trading Strategies   IWR  BlackRock Institutional Trust Company N.A. - iShares Russell Mid-Cap (0.98)


EWC Forecast + Options Trading Strategies   EWC  BlackRock Institutional Trust Company N.A. - iShares MSCI Canada (0.98)


VYM Forecast + Options Trading Strategies   VYM  Vanguard High Dividend Yield Indx (0.98)


SCHD Forecast + Options Trading Strategies   SCHD  Schwab US Dividend Equity (0.97)



Uncorrelated Assets

Assets with little price relationship to FAB



UAA Forecast + Options Trading Strategies   UAA  Under Armour (-0.0)


CDLX Forecast + Options Trading Strategies   CDLX  Cardlytics (-0.0)


HSIC Forecast + Options Trading Strategies   HSIC  Henry Schein (-0.0)


BHF Forecast + Options Trading Strategies   BHF  Brighthouse Financial (0.0)


IPI Forecast + Options Trading Strategies   IPI  Intrepid Potash (-0.0)



Anticorrelated Assets

Assets that tend to move strongly against FAB



SH Forecast + Options Trading Strategies   SH  ProShares Short S&P500 (-0.95)


RWM Forecast + Options Trading Strategies   RWM  ProShares Trust - ProShares Short Russell2000 (-0.97)


TWM Forecast + Options Trading Strategies   TWM  ProShares UltraShort Russell2000 (-0.97)


TZA Forecast + Options Trading Strategies   TZA  Direxion Daily Small Cap Bear 3X Shares (-0.98)


SRTY Forecast + Options Trading Strategies   SRTY  ProShares UltraPro Short Russell2000 (-0.98)





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