LEO Forecast



Bearish<—>Bullish



80% Confidence




Bullish Case: Institutional interest in LEO’s municipal bonds could stabilize prices and offer slight gains, especially if market conditions favor safe-haven assets.




Bearish Case: Persistent underperformance, operational losses, and high fees continue to weigh down LEO with a historical trend of negative returns.




Potential Outcomes:

1. Flat price action (45%): aligns with historical mean reversion.

2. Moderate rally (25%): positive institutional support.

3. Decline (30%): escalating operational challenges.




Trading Oracle: Consider a bear call credit spread around the $6.5 strike for 3 months. Low implied volatility suggests stability with high probability of flat price action. This captures theta decay while minimizing risk and capitalizing on LEO’s historical behavior.



January 10, 2025


BNY Mellon Strategic Municipals Forecast

LEO        BNY Mellon Strategic Municipals
















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