Bullish Case: NOG's recent acquisitions may drive oil production growth, increasing potential for positive price shifts, supported by a high percentage of call options traded recently which indicates bullish sentiment.

Bearish Case: Weak trading volumes and a lack of significant price movement suggest underlying market concerns; recent increases in implied volatility could signal heightened uncertainty, risking further price declines.

Potential Outcomes:

1. 40% chance of modest price recovery driven by operational improvements;

2. 35% likelihood of stagnation due to flat market environment;

3. 25% risk of significant decline if market volatility persists.

Trading Oracle: Adopt a credit spread strategy, selling the 10/18 $38 call and buying the $41 call to capitalize on high implied volatility with a favorable risk/reward ratio. This allows for potential gains while offering downside protection, given a mildly bullish outlook over the next month.

October 20, 2024