PAGP Forecast + Trading Strategies


Bullish Case: PAGP benefits from rising oil prices and increased Permian production. Strong dividend yields and historical mean-reversion pattern support stock price appreciation.


Bearish Case: Declining net income from industry headwinds constrains growth. Implied volatility is high relative to market, indicating potential for future price instability and downward pressure.


Potential Outcomes:

1. Increased Permian output improves earnings (35%).

2. Continued decline in net income due to external factors (30%).

3. Stable dividends attracting long-term investors (20%).

4. Impacts of rising material costs and interest rates (15%).


Trading Oracle: Trade a bullish medium-term debit spread. Buy NOV 2024 $17 call, sell NOV 2024 $19 call. This leverages favorable debit spread dynamics and positive historical mean-reversion. Target high reward-to-risk ratio with a high probability-of-profit.


June 30, 2024


Plains GP Forecast

PAGP      Plains GP











Correlated Assets

Assets that tend to move strongly with PAGP



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.82)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.64)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.72)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.77)



Uncorrelated Assets

Assets with little price relationship to PAGP



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.64)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.72)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.77)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.82)



Anticorrelated Assets

Assets that tend to move strongly against PAGP



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.82)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.64)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.72)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.77)





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