SPYD Forecast


Bullish Case: SPYD's high dividend yield at 4.4% offers appealing income during market volatility. The ETF's low expense ratio (0.07%) also enhances returns relative to its index. Given historical mean reversion and a diversified portfolio, upward price movements are likely over extended periods.


Bearish Case: SPYD's sector concentration in real estate, utilities, and financials exposes it to interest rate hikes, reducing returns and inducing volatility. Recent underperformance versus broader markets and higher put volume signal bearish sentiment.


Potential Outcomes:

1. SPYD rebounds due to investor demand for high yield (55%).

2. Continued underperformance from sector sensitivity to macroeconomic factors (45%).

3. Minimal price movement as mean reversion stabilizes ETF price (75%).


Trading Oracle: Enter a credit spread strategy based on anticipated low volatility and mean reversion. Sell the SPYD 12/20/2024 43.00 Call and buy the SPYD 12/20/2024 44.00 Call to capture premium. This trade benefits from limited upside movement, leveraging bearish sentiment and sector headwinds. 3-6 month horizon.


June 27, 2024


SPDR Series Trust - SPDR Portfolio S&P 500 High Dividend Forecast

SPYD      SPDR Series Trust - SPDR Portfolio S&P 500 High Dividend











Correlated Assets

Assets that tend to move strongly with SPYD



DVY Forecast + Options Trading Strategies   DVY  BlackRock Institutional Trust Company N.A. - iShares Select Dividend (0.98)


IWD Forecast + Options Trading Strategies   IWD  iShares Russell 1000 Value (0.96)


RY Forecast + Options Trading Strategies   RY  Royal Bank Of Canada (0.96)


VYM Forecast + Options Trading Strategies   VYM  Vanguard High Dividend Yield Indx (0.96)


CFG Forecast + Options Trading Strategies   CFG  Citizens Financial (0.96)



Uncorrelated Assets

Assets with little price relationship to SPYD



UAA Forecast + Options Trading Strategies   UAA  Under Armour (-0.0)


CTRA Forecast + Options Trading Strategies   CTRA  Coterra Energy (0.01)


REXR Forecast + Options Trading Strategies   REXR  Rexford Industrial Realty (0.01)


CME Forecast + Options Trading Strategies   CME  CME (0.01)


JBHT Forecast + Options Trading Strategies   JBHT  J.B. Hunt Transport Services (-0.01)



Anticorrelated Assets

Assets that tend to move strongly against SPYD



SPXS Forecast + Options Trading Strategies   SPXS  Direxion Daily S&P 500 Bear 3X Shares (-0.93)


SH Forecast + Options Trading Strategies   SH  ProShares Short S&P500 (-0.94)


TWM Forecast + Options Trading Strategies   TWM  ProShares UltraShort Russell2000 (-0.95)


SRTY Forecast + Options Trading Strategies   SRTY  ProShares UltraPro Short Russell2000 (-0.96)


TZA Forecast + Options Trading Strategies   TZA  Direxion Daily Small Cap Bear 3X Shares (-0.96)





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