OTEX Forecast + Trading Strategies


Bullish Case: OTEX's consistent AI and cloud traction, recent dividend increase, and undervaluation at 8 times forward earnings bolster its growth potential. The historical price return surface indicates a likelihood of positive returns for longer holdings.


Bearish Case: Persistent insider selling, high leverage, and flat recent performance signal continued downward pressure. The implied volatility surface suggests market apprehension, particularly at lower strike prices.


Potential Outcomes:

1) Insider selling and macro factors lead to a 10-15% decline (50%).

2) AI and cloud growth prompt a 20% rise (30%).

3) Acquisition offer or positive earnings surprise yields a 25% spike (20%).


Trading Oracle: Initiate a bearish debit spread by buying the $30 Puts and selling the $25 Puts expiring in December 2024. This strategy aligns with the anticipated higher volatility spikes and downside risk, offering a high reward:risk ratio.


July 23, 2024


Open Text Forecast

OTEX      Open Text











Correlated Assets

Assets that tend to move strongly with OTEX



VFC Forecast + Options Trading Strategies   VFC  VF (0.62)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.52)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.38)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.59)



Uncorrelated Assets

Assets with little price relationship to OTEX



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.38)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.52)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.59)


VFC Forecast + Options Trading Strategies   VFC  VF (0.62)



Anticorrelated Assets

Assets that tend to move strongly against OTEX



VFC Forecast + Options Trading Strategies   VFC  VF (0.62)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.52)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.38)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.59)





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