Bullish Case: A potential market downturn could trigger substantial mean reversion for SPXS, supported by high implied volatility and recent strong call volume. This indicates anticipation for upward movements due to market stress.

Bearish Case: Persistent market stability and low trading volumes suggest continued resistance for SPXS, limiting upward potential. The prevailing downtrend further supports bearish sentiment in the near term.

Potential Outcomes:

1) 60% chance SPXS stabilizes near $6.00 as volatility stabilizes;

2) 25% chance rebounds to $7.00 from market stress;

3) 15% possibility of further decline to $5.00 if bullish trends persist.

Trading Oracle: Given the high implied volatility and near-term volatility structure, consider trading debit spreads by buying 4 $6.50 call options while selling 3 $8.00 call options. This leverages possible upward movements post-market corrections, with a favorable risk-reward setup. Focus on near-term catalysts for execution.

November 17, 2024