New Options for e.l.f. Beauty Offer Yield Opportunities
Investors in e.l.f. Beauty Inc (Symbol: ELF) can now explore new options expiring in March 2026, which present intriguing opportunities. With 382 days until expiration, these options might enable sellers of puts or calls to command higher premiums as compared to contracts that expire sooner. Our YieldBoost formula at Stock Options Channel has identified one put and one call contract that are particularly noteworthy.
Put Contract Insights
The put contract at the $65.00 strike price currently has a bid of $13.60. If an investor chooses to sell-to-open this put contract, they agree to buy the shares at $65.00 while also collecting the premium. This arrangement effectively lowers the cost basis of the shares to $51.40 (excluding broker commissions). For investors looking to purchase shares of ELF, this strategy could be more appealing than the current market price of $68.70 per share.
Since the $65.00 strike represents about a 5% discount to the current trading price (making it out-of-the-money by that percentage), there is a chance that the put contract could expire worthless. Current analytical data, including greeks and implied greeks, indicate a 69% probability of this happening. Stock Options Channel will monitor these odds over time and publish updates on our website under the contract detail page, including a chart on these statistics. If the contract does expire worthless, the premium would yield a 20.92% return on the cash commitment, or 19.99% annualized—what we call a YieldBoost.
Below is a chart showing the trailing twelve-month trading history for e.l.f. Beauty Inc, with the $65.00 strike highlighted in green:
Call Contract Opportunities
Turning to the call side, the call contract at a $75.00 strike price has a bid of $16.10. Should an investor decide to buy shares of ELF at the current price of $68.70 and subsequently sell-to-open that call as a “covered call,” they would commit to selling the shares at $75.00. With the premium included, this could generate a total return (excluding any dividends) of 32.61% if the stock is called away by the March 2026 expiration (prior to broker commissions). However, substantial upside could remain unclaimed if ELF’s stock appreciates significantly, emphasizing the importance of analyzing both historical performance and business fundamentals.
Here’s the chart that displays ELF’s trailing twelve-month trading history, with the $75.00 strike highlighted in red:
The $75.00 strike represents an approximate 9% premium over the current trading price, making it out-of-the-money by that percentage as well. Thus, there is also a possibility that this covered call contract could expire worthless, allowing the investor to keep both their shares and the premium collected. Current analytical data suggest a 38% likelihood of this occurring. Stock Options Channel will track this probability over time, providing charts and updates on our website. If the covered call contract expires worthless, the premium would equate to a 23.44% boost of additional return for the investor, or 22.39% annualized—another example of a YieldBoost.
The implied volatility for the put contract stands at 68%, while the call contract’s implied volatility is 69%. In comparison, the actual trailing twelve-month volatility, calculated based on the last 249 trading day closing values and today’s price of $68.70, is 66%. For more options contract ideas worth considering, please visit StockOptionsChannel.com.
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Additional Insights:
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
