Investors in e.l.f. Beauty Inc. (Symbol: ELF) gained access to new options with an expiration date of October 16th, presenting potential trading opportunities. The put contract at a $50.00 strike price has a current bid of $6.45, offering a cost basis of $43.55 per share if exercised, compared to the current trading price of $53.29 per share. This represents a roughly 6% discount and offers a 12.90% return on cash commitment if the option expires worthless, with current odds of that happening at 65%.
On the calls side, the $55.00 strike call has a bid of $7.25. An investor buying ELF shares at $53.29 and selling this call could achieve a total return of 16.81% if the stock is called away by expiration. This call has a 43% chance of expiring worthless, allowing the investor to keep both the shares and the premium, which equates to a 13.60% yield boost. The implied volatility for the put is 79%, while it’s 75% for the call. The actual trailing twelve-month volatility stands at 71%.
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