Investors in CAVA Group Inc (CAVA) began trading new options today, set to expire on September 5th. Notably, a put contract at the $86.00 strike price has a current bid of $5.45, allowing sellers to commit to purchasing shares at $86.00 while receiving a premium that effectively reduces their cost basis to $80.55. The current price of CAVA shares is $86.71, offering an approximate 1% discount with a 58% chance the put expires worthless, potentially yielding a 6.34% return on cash commitment.
Additionally, a call contract at the $89.00 strike price has a current bid of $6.25. Purchasing shares at $86.71 and selling the call would commit the seller to a total return of 9.85% if the stock is called away. With the call being out-of-the-money by approximately 3%, there’s a 49% chance it might expire worthless, providing a potential additional return of 7.21% if it does.
The implied volatility for the put contract is 56%, while the call’s implied volatility is 60%, with both options reflecting CAVA’s actual trailing twelve-month volatility of 56%.
