Price Forecast:

Bullish Case: Strong support from Trump boosts MAGA, with favorable election outcomes expected to drive the stock higher. Historical data indicates over 40% price returns over 1-2 years, suggesting substantial upside potential, especially with low implied volatility.

Bearish Case: Political instability, especially regarding upcoming legislative actions, presents risks. If Trump faces challenges in securing his agenda, bearish sentiment could consolidate, exacerbated by high volatility in options markets indicating unfair prices for MAGA puts.

Potential Outcomes:

1. Republican control boosts MAGA (40%);

2. Political volatility maintains flat prices (30%);

3. Adverse developments lead to price drops (30%). The political landscape is changing rapidly, influencing market dynamics significantly.

Trading Oracle: Implement a bullish debit spread targeting MAGA calls at the $52-$54 range expiring shortly. Given low implied volatility, this position leverages potential upside post-election with manageable risks, achieving a favorable reward-to-risk ratio.

November 20, 2024