Bullish Case: If European economic indicators continue to improve and geopolitical tensions reduce, FEZ could rise, leveraging its volatility drop to enhance returns. High historical return probabilities (7%-10%) favor a bullish trend.

Bearish Case: Conversely, if renewed geopolitical tensions and sluggish economic data persist, FEZ may face downward pressure, with a high risk of significant volatility and potential declines reaching 10% or more.

Potential Outcomes:

• 25% chance of 5% gain due to positive economic data.
• 15% chance of a 10% drop driven by geopolitical tensions.
• 20% chance of flat performance amid uncertainty.
• 10% chance of extreme volatility resulting from macroeconomic shocks.
• 30% chance of recoveries aligning with improving EU conditions.

Trading Oracle: Implement a credit spread strategy: Sell 4 $50.00 calls while buying 5 $51.00 calls to capitalize on decreased volatility, targeting 33% returns. Alternatively, a put spread could safeguard against bearish trends with a solid profit potential in remaining stable markets.

December 18, 2024