SDS Forecast


Bullish Case: SDS displays a compelling bullish case due to backwardation in implied volatility term structure and call options volume exceeding puts by 55%. Historical mean reversion supports potential upside.


Bearish Case: SDS's long-term downward trend supported by 52.3% decline over two years and high historical losses as evidenced by the return surface. Option volume largely backed short volatility.


Potential Outcomes: Continued downward trend (60%). Possible short-term mean reversion bounce (30%). Sideways movement due to overall market uncertainty (10%).


Trading Oracle: Trade bullish debit spreads by buying SDS 09/20/24 $23.00 calls and selling $26.00 calls. Optimal reward:risk ratio capitalizing on potential mean reversion and low implied volatility. Expiry within 60-90 days targets likely reversal.


July 18, 2024


ProShares UltraShort S&P500 Forecast

SDS      ProShares UltraShort S&P500











Correlated Assets

Assets that tend to move strongly with SDS



SH Forecast + Options Trading Strategies   SH  ProShares Short S&P500 (1.0)


SQQQ Forecast + Options Trading Strategies   SQQQ  ProShares UltraPro Short QQQ (0.99)


VIXY Forecast + Options Trading Strategies   VIXY  ProShares VIX Short-Term Futures (0.97)


DXD Forecast + Options Trading Strategies   DXD  ProShares UltraShort Dow30 (0.95)


TZA Forecast + Options Trading Strategies   TZA  Direxion Daily Small Cap Bear 3X Shares (0.93)



Uncorrelated Assets

Assets with little price relationship to SDS



CFLT Forecast + Options Trading Strategies   CFLT  Confluent (0.0)


SMPL Forecast + Options Trading Strategies   SMPL  Simply Good Foods (0.01)


NEP Forecast + Options Trading Strategies   NEP  NextEra Energy (-0.01)


HR Forecast + Options Trading Strategies   HR  Healthcare Realty Trust (-0.01)


LH Forecast + Options Trading Strategies   LH  Laboratory Corp. Of America (0.01)



Anticorrelated Assets

Assets that tend to move strongly against SDS



SPYG Forecast + Options Trading Strategies   SPYG  SPDR Portfolio S&P 500 Growth (-1.0)


VOO Forecast + Options Trading Strategies   VOO  Vanguard S&P 500 (-1.0)


UPRO Forecast + Options Trading Strategies   UPRO  ProShares UltraPro S&P 500 (-1.0)


SPLG Forecast + Options Trading Strategies   SPLG  SPDR Series Trust - SPDR Portfolio S&P 500 (-1.0)


SSO Forecast + Options Trading Strategies   SSO  ProShares Ultra S&P500 (-1.0)





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