Bullish Case: A potential economic recovery spurred by increased infrastructure spending could drive TX prices sharply higher. The current low price relative to historical levels, coupled with bullish sentiment among options traders, supports this outlook.

Bearish Case: Continued economic pressures and high implied volatility suggest sustained market uncertainty, potentially leading to further price declines for TX. The significant volume of put options traded indicates a prevailing pessimism in the market.

Potential Outcomes:

1. Economic recovery boosts TX prices - 45% chance.

2. Continued downturn leads to price cuts - 30% chance.

3. Stabilization with minor fluctuations - 15% chance.

4. Severe geopolitical events impact steel demand - 10% chance.

Trading Oracle: Given the market's recent bearish tone and the high implied volatility in calls, consider initiating a bearish credit spread by selling the TX 12/20/2024 35.00 P and buying the 30.00 P. This aims to capitalize on potential declines and remains well-positioned for premium decay as expiration approaches, maximizing reward-to-risk under current market sentiment.

November 19, 2024