Take bullish positions on Michelin, via turbo calls

Among the biggest declines since the beginning of the year within the Cac 40, Michelin lost more than 20%. It is almost as much as Renault and Societe Generale, yet more directly exposed to Russia, via their studies Avtovaz and Rosbank. A poor performance that includes the 8% rebound in the action on Wednesday, the automotive sector being one of the quickest to recover in the wake of the markets.

If the rise in raw material prices remains a subject of concern for the tire manufacturer (but in the same way as many industrial companies) and if the group is also sensitive to Russia, due for example to the supply of carbon black and certain types of oil and resin, we consider the penalty to be severe. We are therefore implementing a bullish strategy on Michelin via turbo calls, taking care to select a low-risk product, in the event of another firedamp on the market.

We select turbo calls ZX3FB, with no expiry date and a knock-out barrier at 85.57 euros, nearly 24% away from the current level of the action. The leverage is close to 4 times. Quotation range: 3.01-3.02 euros.