Price Forecast:

Bullish Case: NXST could see a price increase due to strong financial fundamentals and anticipated political ad spending boosting revenue ahead of the election cycle. Implied volatility suggests potential for upward price movements as traders anticipate a favorable Q3 earnings report on November 8.

Bearish Case: Potential risks include continued insider selling leading to decreased investor confidence, alongside economic uncertainties affecting advertising revenues. A flat options term structure indicates market skepticism.

Potential Outcomes:

1. Positive Q3 earnings surprise (30%).

2. Insider selling continues impacting sentiment (25%).

3. Economic downturn affecting ad revenues (20%).

4. Political advertising boosts stock (25%).

Trading Oracle: Consider a bullish debit spread by buying the November 2024 $175 calls and selling $180 calls to capitalize on potential price increases if Q3 results exceed expectations. Maintain a time horizon up to earnings on November 8, targeting a return of 40% on risk with defined risk. High implied volatility supports this strategy.

October 25, 2024