Price Forecast:

Bullish Case: MIR's strong mean-reverting historical behavior, along with heightened call volume (73% more than puts), suggests possible upward momentum due to market interest in nuclear stocks. Anticipation around grid capacity engagements bolsters the bullish scenario.

Bearish Case: The flat implied volatility term structure indicates a potential stagnation in price, raising concerns over macroeconomic downturns or negative sentiment affecting MIR. Existing elevated put implied volatility signals risks of significant price declines under unfavorable market conditions.

Potential Outcomes:

1. Price stability (55%) - Market remains range-bound due to waning volatility.

2. Moderate rally (25%) - Positive sentiment drives demand amid nuclear discussions.

3. Decline (15%) - Economic shifts trigger selling pressure.

4. Severe drop (5%) - Major adverse events or news lead to panic selling.

Trading Oracle: Consider initiating a bullish debit spread using MIR 15.00 C while selling MIR 17.50 C to capitalize on potential bullish sentiment and mean-reverting price action. Focus on the December 2024 expiry to take advantage of short-term price fluctuations while leveraging implied volatility effectively.

November 15, 2024