Bullish Case: HDSN could benefit from potential regulatory changes favoring refrigerant recovery, boosting demand and price. The high implied volatility suggests market participants anticipate significant movements, possibly leading to upward price action.

Bearish Case: Continued external pressures, such as protests impacting operations and negative market sentiment, could drive HDSN lower, especially with its recent trading to lower prices, indicating hesitation among investors.

Potential Outcomes:

1. 30% chance of strong regulatory support boosting demand.

2. 40% chance of continued operational disruptions from protests.

3. 20% chance of significant earnings surprises improving market perception.

4. 10% chance of severe revenue declines worsening sentiment.

Trading Oracle: Consider a debit spread strategy, buying HDSN 9/20/2024 $8 calls while selling $9 calls to capitalize on volatility expectations, maintaining a bullish bias as market conditions evolve. This approach provides a favorable risk-reward dynamic with limited downside.

August 18, 2024