STIP Forecast


Bullish Case: If institutional interest in inflation-protected assets rises and global economic stability improves, STIP could see upward price movement driven by increased demand for TIPS, translating to price gains.


Bearish Case: Rising interest rates or economic downturns may pressure STIP, leading to further declines as risk-averse investors pivot to higher-yielding assets, thus exacerbating outflows from TIPS ETFs.


Potential Outcomes:

1. Continued stagnation around $99.50 (50%).

2. Upside to $102 (30%): Economic stability boosts TIPS appeal.

3. Decline to $95 (20%): Elevated volatility sparks investor exit. The probabilities are supported by historical trends and current market sentiment.


Trading Oracle: Implement a credit spread: sell STIP 08/16/2024 100P and buy STIP 08/16/2024 99P. This approach capitalizes on elevated volatility for short options while hedging against downside risk, providing a favorable risk/reward scenario.


July 25, 2024


BlackRock Institutional Forecast

STIP      BlackRock Institutional











Correlated Assets

Assets that tend to move strongly with STIP



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.87)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.45)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.69)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.7)



Uncorrelated Assets

Assets with little price relationship to STIP



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.45)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.69)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.7)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.87)



Anticorrelated Assets

Assets that tend to move strongly against STIP



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.87)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.45)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.69)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.7)





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