LEA Forecast + Trading Strategies


Bullish Case: LEA's flat historical term structure combined with lower realized volatility suggests reduced downside risk; opportunities in auto sector growth and improving sentiment could drive price appreciation.


Bearish Case: LEA's historical underperformance coupled with high implied volatility relative to market and significant insider selling signals further price weakness; geopolitical uncertainties also weigh heavily.


Potential Outcomes:

1. LEA sees modest growth driven by sector performance, 30%.

2. LEA trades sideways due to volatility stabilization, 50%.

3. LEA faces decline due to geopolitical and internal risks, 20%.


Trading Oracle: Implement a defined-risk bullish credit spread considering high volatility and downside protection. Sell the $105 put and buy the $110 put expiring in ~60 days. This position has a high reward:risk ratio, a positive edge, and a ~68% probability of profit in a stable volatility scenario.


July 14, 2024










Correlated Assets

Assets that tend to move strongly with LEA



LI Forecast + Options Trading Strategies   LI  Li Auto (0.69)


VFC Forecast + Options Trading Strategies   VFC  VF (0.61)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.07)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.33)



Uncorrelated Assets

Assets with little price relationship to LEA



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.07)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.33)


VFC Forecast + Options Trading Strategies   VFC  VF (0.61)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.69)



Anticorrelated Assets

Assets that tend to move strongly against LEA



LI Forecast + Options Trading Strategies   LI  Li Auto (0.69)


VFC Forecast + Options Trading Strategies   VFC  VF (0.61)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.07)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.33)





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