SWN Forecast + Trading Strategies


Bullish Case: EQT, SWN, AR, and CNX are expected to benefit significantly if natural gas prices rise, given the high correlation to natural gas prices. Their market position and operational efficiency post-merger, along with a resurgence in demand for natural gas predicted by 2030, creates potential upside.


Bearish Case: High implied volatility and historical underperformance increase downside risk for SWN, evidenced by investor anxiety over ongoing FTC scrutiny. Poor trading volume and Volatility spikes reflect concern over post-merger execution and market uncertainty.


Potential Outcomes:

1. Successful market merger with cost savings (60%),

2. Extended regulatory delays (20%) or deal falling through (15%),

3. Higher-than-expectation natural gas demand surge (5%). Projections calibrated with current high volatility and Helium AIs forecasts.


Trading Oracle: Given Helium's forecast for spiked volatility, implement a bearish back-spread strategy (short 3 $7 call, long 1 $9 call), ending 3 months out to leverage market overpricing. Market odds: 80%; expected edge: $15.


July 10, 2024


Southwestern Energy Forecast

SWN      Southwestern Energy











Correlated Assets

Assets that tend to move strongly with SWN



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.65)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.58)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.42)


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



Uncorrelated Assets

Assets with little price relationship to SWN



LI Forecast + Options Trading Strategies   LI  Li Auto (-0.42)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.58)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.65)


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



Anticorrelated Assets

Assets that tend to move strongly against SWN



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.65)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.58)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.42)


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





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