SWI Forecast


Bullish Case: The judge's dismissal of most SEC claims reduces legal risks for SolarWinds, and the low price-to-book ratio indicates potential undervaluation.


Bearish Case: Recent vulnerabilities in Serv-U file transfer software might erode investor confidence, coupled with ongoing scrutiny from previous cyberattacks.


Potential Outcomes: 50% probability for moderate growth due to reduced legal risks; 30% chance of steep declines from new exploits; 20% chance of sideways trading led by mean reversion.


Trading Oracle: Given the high implied volatility, implement bullish debit spreads (Helium Long Volatility), targeting medium-term (3-6 months) expiration. This strategy benefits from legal relief while protecting against downside risks from security issues.


July 20, 2024


SolarWinds Forecast

SWI      SolarWinds











Correlated Assets

Assets that tend to move strongly with SWI



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.51)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.16)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.24)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.32)



Uncorrelated Assets

Assets with little price relationship to SWI



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.16)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.24)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.32)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.51)



Anticorrelated Assets

Assets that tend to move strongly against SWI



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.51)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.16)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.24)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.32)





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