Price Forecast:

Bullish Case: Workday is leveraging AI and strong demand in ERP, projected to boost revenue significantly. Upcoming product innovations may elevate stock beyond $270, supporting bullish sentiment in WDAY options.

Bearish Case: Challenges from legal issues and declining market confidence could suppress Workday's growth. If revenues falter, the stock may drop below $240, significantly impacting options. Strong bearish sentiment is evident.

Potential Outcomes:

1. Continued growth via AI advancements (60% probability).

2. Slower growth due to legal and economic pressures (30%).

3. Significant decline stemming from major market corrections (10%)

Trading Oracle: Consider initiating a bullish short volatility position by selling WDAY $250 puts and buying $240 puts, targeting expiration soon with about 65% odds of profit. This setup capitalizes on currently high implied volatility and mean-reverting price action for a potential return of 14%.

November 08, 2024