PAG Forecast


Bullish Case: PAG’s bullish case is driven by consistent dividend growth, solid financial performance, and attractive valuation metrics. The implied volatility surface indicates stable sentiment with limited downside risk, suggesting potential positive price momentum.


Bearish Case: The bearish case for PAG arises from persistent insider selling, significant operational disruptions from cyber incidents, and declining stock performance over the past year. These factors could weigh on investor sentiment and dampen price recovery.


Potential Outcomes:

1. Strong financial performance drives stock price up (~70%).

2. Insider selling and operational challenges cause price dip (~30%). Historical accuracy shows reasonable consistency with these probabilities.


Trading Oracle: Trade credit spreads (Helium Short Volatility) with a neutral to bullish bias. Execute bull put spreads centered around $155 strike, 60-90 day horizon. Exploit stable to reducing implied volatility reflected in the surface chart, offering high reward:risk with a high probability of profit.


July 16, 2024


Penske Automotive Forecast

PAG      Penske Automotive











Correlated Assets

Assets that tend to move strongly with PAG



VFC Forecast + Options Trading Strategies   VFC  VF (0.5)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.48)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.15)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.21)



Uncorrelated Assets

Assets with little price relationship to PAG



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.15)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.21)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.48)


VFC Forecast + Options Trading Strategies   VFC  VF (0.5)



Anticorrelated Assets

Assets that tend to move strongly against PAG



VFC Forecast + Options Trading Strategies   VFC  VF (0.5)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.48)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.15)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.21)





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