SDD Forecast


Bullish Case: Strong historical volatility suggests a potential rebound, coinciding with rising demand for SDD in the small-cap sector amidst improving economic conditions. Increases in options volume reflect optimism for upward movement.


Bearish Case: Current high implied volatility indicates market uncertainty, suggesting a higher risk of downward price movement. Lack of significant catalysts and a weak historical return profile signal potential negative performance in the short term.


Potential Outcomes:

1. Short-term rally (25%) if economic indicators improve.

2. Downward drift exacerbated by volatility spikes (35%).

3. Continued sideways movement with high implied volatility (40%).


Trading Oracle: Implement a bullish strategy with a debit spread on calls (strike $17, expiration August 16). This capitalizes on heightened implied volatility, allowing for a leveraged play on potential price rebounds while managing downside risk.


July 25, 2024


ProShares UltraShort SmallCap600 Forecast

SDD      ProShares UltraShort SmallCap600











Correlated Assets

Assets that tend to move strongly with SDD



LI Forecast + Options Trading Strategies   LI  Li Auto (0.54)


VFC Forecast + Options Trading Strategies   VFC  VF (0.46)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.35)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.83)



Uncorrelated Assets

Assets with little price relationship to SDD



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.35)


VFC Forecast + Options Trading Strategies   VFC  VF (0.46)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.54)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.83)



Anticorrelated Assets

Assets that tend to move strongly against SDD



LI Forecast + Options Trading Strategies   LI  Li Auto (0.54)


VFC Forecast + Options Trading Strategies   VFC  VF (0.46)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.35)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.83)





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