USB Forecast + Trading Strategies


Bullish Case: USB's strong reserve coverage for CRE loans and successful Union Bank integration suggest robust underlying fundamentals. Historical price data and positive outlook in sector suggest stability.


Bearish Case: Persistent macroeconomic challenges and increasing operational costs could lead to compressed margins, heightened by declining financial sector sentiment and rising provisions.


Potential Outcomes:

1. Financial sector recovery boosts USB (40%).

2. Continued sector instability pressures USB (45%).

3. Mean reversion drives slight upswing (10%).

4. External shocks cause sharp declines (5%).


Trading Oracle: Adopt a bullish long call debit spread strategy. Buy Aug 2024 45.00 C, sell Aug 2024 50.00 C. Current low vol favors long spreads. High reward:risk with favorable probability-of-profit. Expiration in 1-2 months leverages recent volatility trends.


July 14, 2024


U.S. Bancorp. Forecast

USB      U.S. Bancorp.











Correlated Assets

Assets that tend to move strongly with USB



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.61)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.1)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.23)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.33)



Uncorrelated Assets

Assets with little price relationship to USB



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.1)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.23)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.33)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.61)



Anticorrelated Assets

Assets that tend to move strongly against USB



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.61)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.1)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.23)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.33)





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