Price Forecast:

Bullish Case: ONEOK's strategic acquisitions and robust dividend policy, combined with stable high implied volatility, indicate strong investor confidence. With growth prospects from recent deals, OKE could reach higher valuations as market sentiment shifts positively.

Bearish Case: Concerns over market volatility and integration challenges from acquisitions raise red flags. The flat implied volatility term structure may suggest a lack of future catalysts to drive prices higher, risking stagnation or decline in share price.

Potential Outcomes:

1. Successful execution of EnLink acquisition (60%) - potential for significant synergies.
2. Regulatory challenges impede integration benefits (25%).
3. Market volatility causes price correction (15%) - increased risk due to macroeconomic factors.

Trading Oracle: Given the current flat term structure and relatively high volatility at the 0-3 month range, consider establishing a bullish position utilizing a debit spread: buy the $115 call and sell the $120 call, with a target expiry aligning with the EnLink acquisition's expected impact window. This strategy captures potential upside with controlled risk.

November 28, 2024