Price Forecast:

Bullish Case: IAG's recent share buyback signals confidence from management, coupled with strong earnings growth driving demand. Positive gold market conditions and ramp-up from the Côté Gold project could lead to further appreciation. Implied volatility suggests market optimism.

Bearish Case: High implied volatility indicates market concern over potential regulatory changes and operational challenges. Recent trends in mean reversion and a flat options term structure may suggest stagnation or decline in IAG's price in the short term amid broader market tensions.

Potential Outcomes:

• 1. Positive earnings surprise leading to price surge (30% probability)
• 2. Regulatory backlash affecting operations (40% probability)
• 3. Market volatility causing sharp pullback (25% probability)
• 4. Successful Côté Gold ramp-up boosting investor sentiment (25% probability)
• 5. Unforeseen economic downturn impacting all sectors (20% probability)

Trading Oracle: Consider bullish debit spreads by buying January 2025 $5.5 calls and selling $6.0 calls, exploiting high implied volatility for potential upside as Côté Gold ramps up. Alternatively, hedging with a put spread for downside protection could also manage risks. Maintain tight stops and risk management for profit maximization.

December 13, 2024