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LKQ Forecast + Trading Strategies



Price Forecast:


Bearish   <->   Bullish



Bullish Case: Despite bearish sentiment, LKQ's operational efficiencies and improving European markets present potential for price recovery, especially if underperformance in North America stabilizes. Prospective M&A could catalyze significant growth.



Bearish Case: Current high implied volatility and recent persistent macroeconomic challenges point to potential continued downside for LKQ. Insider selling and weak price momentum exacerbate bearish outlooks.



Potential Outcomes:

1) Stabilization in North America: 30% chance.

2) Successful M&A activity: 20% chance.

3) Continued macroeconomic headwinds: 40% chance.

4) Strong E.U. performance boosts price: 10% chance.



Trading Oracle: Engage in a bearish outlook with a credit spread: sell LKQ 12/20/2024 $40.00 call options while buying $45.00 calls. This leverages high implied volatility with a solid risk-reward ratio, targeting continued price convergence around $38 while profiting from time decay. Look for upside in European recovery to drive volatility.


November 08, 2024











Correlated Assets

Assets that tend to move strongly with LKQ


BLMN Forecast + Options Trading Strategies   BLMN  Bloomin Brands (0.93)


LEA Forecast + Options Trading Strategies   LEA  Lear (0.93)


CLF Forecast + Options Trading Strategies   CLF  Cleveland-Cliffs (0.92)


XRX Forecast + Options Trading Strategies   XRX  Xerox (0.92)


DLTR Forecast + Options Trading Strategies   DLTR  Dollar Tree (0.92)



Uncorrelated Assets

Assets with little price relationship to LKQ


GLBE Forecast + Options Trading Strategies   GLBE  Global E Online (0.0)


TNK Forecast + Options Trading Strategies   TNK  Teekay Tankers (0.0)


TWLO Forecast + Options Trading Strategies   TWLO  Twilio (-0.0)


TRMD Forecast + Options Trading Strategies   TRMD  TORM (-0.0)


CPRT Forecast + Options Trading Strategies   CPRT  Copart (-0.0)



Anticorrelated Assets

Assets that tend to move strongly against LKQ


CRS Forecast + Options Trading Strategies   CRS  Carpenter Technology (-0.86)


PAYO Forecast + Options Trading Strategies   PAYO  Payoneer (-0.86)


KGC Forecast + Options Trading Strategies   KGC  Kinross Gold (-0.86)


SRE Forecast + Options Trading Strategies   SRE  Sempra Energy (-0.86)


SO Forecast + Options Trading Strategies   SO  Southern (-0.89)







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