Bullish Case: Increasing demand in the housing market, coupled with strong earnings potential and favorable analyst ratings, creates a conducive environment for further price appreciation of PHM.

Bearish Case: Rising interest rates and potential market saturation could dampen consumer demand, leading to reduced home sales and negatively impacting PHM's stock price.

Potential Outcomes:

• 1. (50%) Continued price appreciation fueled by strong demand and earnings growth.
• 2. (30%) Price stagnation or decline due to rising interest rates affecting affordability.
• 3. (20%) Increased volatility leading to potential corrections amid market concerns.

Trading Oracle: Consider initiating a bearish short volatility position by selling the $120 call and buying the $125 call, targeting modest returns from time decay. Alternatively, consider a bullish credit spread by selling the $110 put and buying the $105 put for a balanced approach.

December 20, 2024