Bullish Case: ON Semiconductor could benefit from rising demand in electric vehicles (EVs) and silicon carbide chips, fostering growth amidst strategic partnerships. Elevated implied volatility suggests potential upward price movements in the near term.

Bearish Case: Challenges like geopolitical tensions and supply chain disruptions pose risks to ON Semiconductor, potentially leading to price declines. The high implied market volatility indicates investor uncertainty and caution.

Potential Outcomes:

• 1. Continued growth from EV demand (60% chance).
• 2. Regulatory challenges destabilizing supply chains (25% chance).
• 3. Market volatility influencing stock performance negatively (10% chance).
• 4. Geopolitical tensions affecting supply and global trade dynamics (5% chance).

Trading Oracle: Consider initiating a bullish debit spread by buying the ON $70 call and selling the $74 call, targeting short-term gains from potential positive price movements. Expected probability of profit is around 64%, leveraging heightened implied volatility and robust demand forecasts.

December 17, 2024