Bullish Case: Increased EU economic stability and potential ECB stimulus may drive FEZ upward. Implied volatility peaks indicate potential recovery, supported by historical data showing favorable returns over 1-2 years. Potential for price upward momentum is significant.

Bearish Case: Economic slowdown fears and geopolitical tensions could pressurize FEZ prices. High implied volatility signals market caution, leading to increased selling pressure. Market sentiment leans bearish amidst heightened uncertainty.

Potential Outcomes:

1. 25% chance of 5% increase due to favorable EU indicators.

2. 35% chance of 10% drop due to geopolitical tensions.

3. 20% chance of flat performance due to unresolved economic uncertainties.

4. 20% chance of extreme volatility from major macro events.

Trading Oracle: Consider trading a credit spread by selling $49 P while buying $47 P, capturing premium from high implied volatility with expected 40% odds of profit and a potential +30% return (annualized). Positioning aligned with moderate bearish sentiment is optimal.

November 20, 2024