Price Forecast:

Bullish Case: Kohl's is benefiting from a strategic partnership with Sephora and an improving holiday sales outlook, suggesting potential for share price stabilization and increment in consumer traffic.

Bearish Case: Persistent sales declines and fierce retail competition threaten Kohl's recovery efforts, compounded by high volatility in options indicating market nervousness about future performance.

Potential Outcomes:

1. 40% chance of holiday sales boost from strategic initiatives.

2. 35% chance of continued decline due to sales struggles.

3. 15% chance for volatility spikes affecting market sentiments.

4. 10% chance for a neutral market reaction, unable to significantly impact stock price.

Trading Oracle: Utilize a bullish debit spread on KSS; consider buying $19.0 calls and selling $19.5 calls, targeting the stabilization in price with a time frame of ~10 days. High implied volatility indicates potential for profit with a favorable risk-to-reward ratio of 2.6:1.

November 13, 2024