VEL Forecast


Bullish Case: VEL could see positive momentum, supported by a potential breakout from the current flat trading and an overall bullish HeliumTrades AI forecast of +0.63%. Stable financials and increasing call options volume suggest a potential upward movement.


Bearish Case: VEL is experiencing backwardation in its volatility term structure, which often signals a potential decline. High implied volatilities for puts and historical likelihoods of negative returns suggest downside risk.


Potential Outcomes:

1. Positive earnings report: 25% chance of driving share price above $20.

2. Continued backwardation: 50% chance leading to price stagnation or drop.

3. Increased option trading volume shifts: 25% chance for higher volatility and mixed impact.


Trading Oracle: Implement a bearish credit spread, leveraging the VEL 17.50 P 08/16/2024. Short volatility given the backwardation and high IVs for puts. Targeting a negative outcome with a short time horizon of less than 1 month. High risk-reward with large downside edge.


July 19, 2024


Velocity Financial Forecast

VEL      Velocity Financial











Correlated Assets

Assets that tend to move strongly with VEL



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.88)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.36)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.67)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.72)



Uncorrelated Assets

Assets with little price relationship to VEL



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.36)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.67)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.72)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.88)



Anticorrelated Assets

Assets that tend to move strongly against VEL



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.88)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.36)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.67)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.72)





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