LGIH Forecast


Bullish Case: LGIH's recent community expansion and elevated trading volume indicate a positive sentiment shift. The term structure shows stable implied volatility, suggesting market confidence. Potential uptrend driven by upcoming financial results on July 30 could catalyze bullish momentum.


Bearish Case: Insider selling and higher put volume highlight market skepticism. The historical return surface suggests a negative skew in potential returns over short holding periods, indicating risks of further price decline driven by macroeconomic uncertainties and potential legislative changes.


Potential Outcomes:

1. Price increases 10% (40% chance) due to positive earnings response.

2. Flat price movement (30%) if uncertainty persists.

3. Decline by 15% (30%) amid negative market catalysts.


Trading Oracle: Engage in a bullish debit spread: buy the LGIH 08/16/2024 $110 call and sell the $115 call. This setup capitalizes on current implied volatility while mitigating risk. The expected earnings release could provide the necessary catalyst for upward price movement, presenting a favorable risk-reward profile.


July 26, 2024


LGI Homes Forecast

LGIH      LGI Homes











Correlated Assets

Assets that tend to move strongly with LGIH



VFC Forecast + Options Trading Strategies   VFC  VF (0.69)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.59)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.36)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.56)



Uncorrelated Assets

Assets with little price relationship to LGIH



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.36)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.56)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.59)


VFC Forecast + Options Trading Strategies   VFC  VF (0.69)



Anticorrelated Assets

Assets that tend to move strongly against LGIH



VFC Forecast + Options Trading Strategies   VFC  VF (0.69)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.59)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.36)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.56)





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