Price Forecast:

Bullish Case: Strong potential arises from upcoming financial reporting and market optimism around continued 3D printing demand, combined with relatively high implied volatility suggesting robust options market activity.

Bearish Case: Concerns over merger negotiations stalling, coupled with high implied volatility, may indicate market skepticism about SSYS's near-term recovery prospects, possibly leading to further price weakness.

Potential Outcomes:

1. Merger with Desktop Metal succeeds (60% chance) bolstering stock price.

2. Prolonged merger negotiations lead to market skepticism (30% chance).

3. Solid quarterly performance boosts investor confidence (10% chance), lifting price in the short term.

Trading Oracle: Initiate a long volatility strategy via a debit spread using SSYS $10 calls and $12.50 calls expiring in January 2025. Leverage high implied volatility for upsides from merger news. The strategy carries a favorable risk/reward ratio with potential for a decent profit while limiting downside risk.

November 12, 2024