US Tactical Derivatives Strategy: VST: The Contracts Are Coming

Research evidence excerpt

US Tactical Derivatives Strategy: VST: The Contracts Are Coming

J P M O R G A N Global Markets Strategy

07 July 2026

US Tactical Derivatives Strategy

VST: The Contracts Are Coming

Buy Oct Call Spreads to Capture Improving Sentiment, Global Equity Derivatives Strategy

Continued AI Capex Strength and Potential Power Deals Bram Kaplan, CFA AC

(1-212) 272-1215

bram.kaplan@jpmorgan.com

• Strategy: We recommend buying Vistra (VST) October call spreads to J.P. Morgan Securities LLC

position for potential upside from incremental power deals, improving AC Arda Sebuktekin

regulatory sentiment, and continued AI capex tailwinds, while taking (1-212) 270-4397

advantage of a valuation disconnect caused by regulatory overhang and arda.sebuktekin@jpmchase.com

negative investor sentiment. J.P. Morgan Securities LLC

• Rationale: Despite AI being the leading investment theme this year, with Daniel(1-212) 622-0105Motoc, CFA

second derivative beneficiaries such as memory, semi cap equipment, and tech daniel.motoc@jpmchase.com

hardware performing strongly, independent power producers have remained J.P. Morgan Securities LLC

big underperformers year to date (VST -15% vs. the S&P 500, Figure 1VSThasbenamarketlagardduetoregulatoryoverhang) amid Tony SK Lee

a regulatory overhang. Our Power analysts (Jeremy Tonet and team) continue (852) 2800-8857

to view VST as their top pick with a $231 price target (48% upside) for Dec’26. tony.sk.lee@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

• They see the regulatory backdrop improving after weighing on the power Morgan Broking (Hong Kong) Limited

sector earlier this year, which should help reduce bearish tail scenarios and Davide Silvestrini

improve investor sentiment. In particular, they highlight FERC’s June order (44-20) 7134-4082