Price Forecast:

Bullish Case: With the current high institutional interest and potential economic reforms from the newly elected government, a bullish outlook is plausible. The recent election results indicate a shift toward stability, potentially boosting SRI prices as investor confidence recovers.

Bearish Case: Despite the potential for recovery, the looming threat of austerity measures and high implied volatility suggest significant downside risks. Political instability post-election could lead to further market sell-offs, keeping pressure on SRI prices.

Potential Outcomes:

1. Positive sentiment around reforms increasing (30%)
2. Continued political instability leading to market decline (40%)
3. Unexpected economic indicators driving volatility (20%)
4. Stable or improving market conditions allowing gradual price recovery (10%)

Trading Oracle: Adopt a bullish debit spread strategy using the SRI 5.00C and 7.50C for expiring in two months, capitalizing on potential price recovery while managing risk from high implied volatility. Monitor upcoming government policy announcements closely for adjusted positions.

November 20, 2024