Price Forecast:

Bullish Case: A resurgence in demand for MAX could trigger bullish momentum, supported by undervalued implied volatility and strong historical price rebounds shown in the volatility surface, indicating a favorable risk-reward scenario for long positions.

Bearish Case: Regulatory headwinds and persistent high volatility present significant risks, particularly if upcoming earnings disappoint. The historical underperformance signals potential for continued downside movement in an uncertain market environment.

Potential Outcomes:

1. Regulatory easing (30%);

2. Earnings beat expectations (25%);

3. Major competitor setbacks (20%);

4. High volatility causing sharp sell-offs (15%);

5. Market stabilization (10%).

Trading Oracle: Adopt a bullish strategy via a debit spread: Buy MAX 12/20/2024 12.50 Calls, sell 15.00 Calls. Implied volatility of 62.5% suggests rising price potential while managing risk. Target a 162% return if price breaches $15 with favorable market support.

November 15, 2024