TWO Forecast + Trading Strategies


Bullish Case: The recent acquisition of RoundPoint may improve earnings significantly. With the Helium implied volatility suggesting stability, a favorable market sentiment could attract more investors, lifting TWO's price closer to its historical average.


Bearish Case: Ongoing volatility and weak financial management risks further declines. The market's bearish sentiment regarding interest spreads may prevent a price recovery, keeping TWO underperforming in the near term due to historical pressures.


Potential Outcomes:

1) Strong financial results post-RoundPoint acquisition (40%);

2) Continued volatility leading to flat price performance (30%);

3) Poor financial management causing significant price decline (30%).


Trading Oracle: Consider initiating a bearish credit spread targeting a $12.0 strike by selling puts while buying $11.0 puts for downside protection. With a high probability of profit based on current implied volatility and a stable market outlook, this strategy offers a favorable risk/reward profile.


July 24, 2024


Two Harbors Investment Forecast

TWO      Two Harbors Investment











Correlated Assets

Assets that tend to move strongly with TWO



VFC Forecast + Options Trading Strategies   VFC  VF (0.49)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.28)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.15)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.32)



Uncorrelated Assets

Assets with little price relationship to TWO



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.15)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.28)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.32)


VFC Forecast + Options Trading Strategies   VFC  VF (0.49)



Anticorrelated Assets

Assets that tend to move strongly against TWO



VFC Forecast + Options Trading Strategies   VFC  VF (0.49)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.28)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.15)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (-0.32)





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