PAGS Forecast + Trading Strategies


Bullish Case: PagSeguro Digital (PAGS) has strong support from institutional investors, recent price increases over the short term (+6.1% in a week), and its potential to trade at an attractive entry point based on competitive advantage. PAGS implied volatility term structure indicates stability ahead, supporting incremental gains.


Bearish Case: PAGS is trading 70.8% below its 5-year high, with flat recent price action and minimal options trading volume reflecting market disinterest. Historical return analysis shows high likelihood of negative returns (-7% or greater) over the next two years, indicating potential for further decline.


Potential Outcomes:

1. Higher price due to undervaluation and institutional investor interest: 30%

2. Market corrects and prices stabilize or drop due to poor historical performance: 50%

3. Unforeseen sector changes triggering volatility: 20%


Trading Oracle: Execute a bearish credit spread trade. Sell the $16.00 strike call and buy the $17.50 strike call expiring in ~186 days to capitalize on the negative historical returns and forecasted volatility. This strategy holds high profit probability at 73% and low-risk reward, syncing with market sentiment and volatility structure edges. Focus on near-term stability while minimizing risk exposure.


July 16, 2024


PagSeguro Digital Forecast

PAGS      PagSeguro Digital











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Assets that tend to move strongly with PAGS



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.69)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.18)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.42)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.42)



Uncorrelated Assets

Assets with little price relationship to PAGS



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.18)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.42)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.42)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.69)



Anticorrelated Assets

Assets that tend to move strongly against PAGS



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.69)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.18)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.42)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.42)





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