Bullish Case: With substantial share buybacks and robust demand for tankers, STNG is poised for price appreciation. The term structure is flat, indicating stability, while implied volatility trends suggest potential upside as market conditions favor pricing strength.

Bearish Case: Concerns over overvaluation persist, with STNG trading significantly below historical highs. The historical volatility suggests a potential price correction, and bearish put activities indicate market uncertainty and caution ahead.

Potential Outcomes:

• 70% chance of sustained demand driving prices up to $54.
• 20% chance of a price correction towards $46 driven by overvaluation.
• 10% chance of geopolitical disruptions pushing prices down further.

Trading Oracle: Engage in a bullish strategy by purchasing $50-$55 call spreads to leverage potential upward movement, supported by a 70% probability of achieving the target price. Simultaneously, consider selling $45 puts for downside protection while maximizing upside exposure, capitalizing on the strong demand for tankers and stability in the term structure.

December 15, 2024