SO Forecast




Price Forecast:




80% Confidence

Bearish<->Bullish




Bullish Case: SO's volatility surface points to potential underpricing. Mean-reverting price history suggests possible upward momentum, supported by stable dividends and renewable energy investments.




Bearish Case: High short-term implied volatility and backwardation suggest risk. Rising interest rates and competition from renewables could pressure margins, possibly leading to a price decline.




Potential Outcomes:
  • Renewable investments drive growth: 45% chance.
  • Interest rates rise, hurting margins: 35% chance.
  • Geopolitical and market instability increases volatility: 20% chance.




Trading Oracle: Execute a bullish debit spread: buy $84 call, sell $86 call, ~30-day expiration. This plays on implied volatility edges and historical mean reversion potential. High 80% probability of profit with modest risk-reward ratio.



December 26, 2024


Southern Forecast

SO        Southern











Correlated Assets

Assets that tend to move strongly with SO



EIX Forecast + Options Trading Strategies   EIX  Edison International (0.97)


PNW Forecast + Options Trading Strategies   PNW  Pinnacle West (0.95)


FE Forecast + Options Trading Strategies   FE  Firstenergy (0.95)


NGD Forecast + Options Trading Strategies   NGD  New Gold (0.94)


RTX Forecast + Options Trading Strategies   RTX  Raytheon (0.94)



Uncorrelated Assets

Assets with little price relationship to SO



LUV Forecast + Options Trading Strategies   LUV  Southwest Airlines (0.0)


ARR Forecast + Options Trading Strategies   ARR  ARMOUR Residential REIT (-0.01)


GIII Forecast + Options Trading Strategies   GIII  G-III Apparel (0.01)


S Forecast + Options Trading Strategies   S  Sprint (-0.01)


PEP Forecast + Options Trading Strategies   PEP  Pepsico (0.01)



Anticorrelated Assets

Assets that tend to move strongly against SO



BEN Forecast + Options Trading Strategies   BEN  Franklin Resources (-0.88)


XRX Forecast + Options Trading Strategies   XRX  Xerox (-0.88)


AMR Forecast + Options Trading Strategies   AMR  Alta Mesa Resources (-0.9)


WBA Forecast + Options Trading Strategies   WBA  Walgreens Boots Alliance (-0.91)


DLTR Forecast + Options Trading Strategies   DLTR  Dollar Tree (-0.93)









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