MUB Forecast


Bullish Case: With historically low volatility and an uptick in institutional buying, MUB is poised for mean reversion toward its higher historical values. Current market conditions may underestimate positive price movements.


Bearish Case: If economic uncertainties rise, driven by rate hikes or inflation fears, MUB could face further declines, exacerbated by high put buying activity showing investor pessimism.


Potential Outcomes:

1. Mean reversion manifesting in recovery (+55%).

2. Increased volatility leading to short-term declines (-30%).

3. Continued stagnation around current levels (-15%).


Trading Oracle: Adopt a bullish stance with debit spreads on MUB options, targeting moderate volatility increases. Utilize the favorable implied volatility skew to maximize gains from rising prices. High reward-to-risk ratio with a potential for substantial alpha.


July 25, 2024


BlackRock Institutional Trust Company N.A. - iShares National Muni Bond Forecast

MUB      BlackRock Institutional Trust Company N.A. - iShares National Muni Bond











Correlated Assets

Assets that tend to move strongly with MUB



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.48)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.08)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.23)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.26)



Uncorrelated Assets

Assets with little price relationship to MUB



VFC Forecast + Options Trading Strategies   VFC  VF (-0.08)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.23)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.26)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.48)



Anticorrelated Assets

Assets that tend to move strongly against MUB



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.48)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.08)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.23)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.26)





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