Bullish Case: Known: KMX ~$51 and over 90d it’s up ~12.6%; term structure is contango with ATM IV ~45–55 and call volume > put volume. Inferred from the KMX return-surface, the highest historical likelihood clusters around small (-5% to +10%) returns. Reflection: my Feb “idiosyncratic leak” drop didn’t occur, so extreme downside odds look lower, though not gone. If 45P IV doesn’t spike ahead of the next earnings/fall update, mean-reverting vol can support a grind-up.

Bearish Case: Known: the KMX IV surface shows persistent downside skew (far-OTM puts priced with very high IV) and the term structure’s wide band implies regime risk. Inferred from KMX return-surface tails and SPY vol-surface that downside demand can spill across markets. Reflection: prior bearish scenarios of -15%+ were not realized, but price has stayed relatively flat since late Feb. If front skew worsens—45P IV jumping while price loses ~$50—then a -5% to -15% move with elevated IV becomes plausible.

Potential Outcomes:

1. 45% +0–7%: contango; front IV eases; support >50.
2. 20% +8–12%: 52.5C vs 45P IV gap narrows; upside gamma.
3. 25% -5–-12%: SPY downside IV lifts; 45P IV jumps; lose 50.
4. 10% -15–-25%: far-OTM put IV re-rates (skew steepens) on idiosyncratic shock.

July 08, 2026