Core Viewpoint - NET stock is anticipated to experience significant movement, with implied volatility indicating a potential price range between $152.89 and $215.45 based on current market conditions [1] Options Market Sentiment - The options flow shows a bullish sentiment, primarily driven by sold puts, although a preference for more debit-based directional trades was not observed last week [2] - The Barchart Technical Opinion indicator currently rates NET stock as a 56% Sell, reflecting broader market pessimism [3] Company Narrative and Market Context - Cloudflare's leadership highlighted a "technical glass ceiling" for enterprises that do not modernize their applications, emphasizing the risks of excessive spending on AI while innovation accelerates [4] - Concerns about the technology ecosystem have led to a decline in market value for Cloudflare, with a 54% increase in NET stock over the past year prompting some investors to exit [5] Statistical Analysis and Market Dynamics - The Black-Scholes model provides a first-order analysis of volatility, but the Markov property suggests that future market behavior is influenced by current states rather than being independent [6][7] - Under normal conditions, a long position in NET stock typically ranges between $170 and $230, but recent performance has shown only four up weeks in the last ten, indicating a downward trend [9] - The Markovian analysis indicates a broader range of outcomes between $160 and $240, with the highest probability density between $183 and $211 under current market conditions [10][11] Trading Strategy - A recommended trade is the 200/210 bull call spread expiring March 20, 2026, involving buying the $200 call and selling the $210 call for a net debit of $455, with a maximum profit potential of $545 [12][13] - This trade aligns with expected price movements and probability density, suggesting a high likelihood of reaching the $210 price point based on the 4-6-D sequence [14] - The high implied volatility for the March 20 options chain supports a directional wager rather than a more expensive straddle-type trade [15]

Core Viewpoint - New Gold Inc (NYSEAMERICAN: NGD) has experienced a significant stock increase of approximately 266% year-to-date, with a recent uptick of over 10% in the last five sessions, indicating strong buyer interest and potential for further gains [1][2]. Group 1: Stock Performance and Market Sentiment - The upcoming earnings report on February 18 is expected to influence NGD stock positively, as a favorable outcome could enhance the already bullish sentiment surrounding the stock [2]. - The recent rally in gold and silver prices is contributing to the positive market sentiment, which may continue into the new year [2]. Group 2: Acquisition Details - Coeur Mining, Inc. (NYSE:CDE) announced an all-stock acquisition of New Gold valued at approximately $7 billion, with an exchange ratio that values NGD at $8.51 per share, representing an 8% premium over the current stock price [3]. Group 3: Volatility and Price Movement - Expected move calculators predict a 19.1% price movement for NGD stock following the February earnings disclosure, indicating potential volatility [5]. - Implied volatility (IV) provides insights into expected price dispersion, although it does not directly indicate the likelihood of specific outcomes [6][7]. Group 4: Price Projections and Trading Strategies - The forward 10-week returns for NGD stock are projected to range between $8.80 and $10, with price clustering likely around $9.30 [11]. - A unique 4-6-U quant signal indicates that despite fewer up weeks, the stock price has trended upward, suggesting continued bullish potential [12]. - A trading strategy targeting a $10 strike price through a 9/10 bull call spread expiring February 20, 2026, is suggested, with a maximum payout of about 43% [14]. - An alternative strategy involving a 9/11 bull call spread is also proposed, requiring NGD stock to rise through $11 at expiration, with a potential maximum payout of roughly 111% [18].