New Options Activity for e.l.f. Beauty Inc: Analyzing Potential Strategies

Investors in e.l.f. Beauty Inc (Symbol: ELF) saw the trading of new options begin today, set to expire on June 13th. The Options Channel has analyzed ELF’s options chain for the June 13th contracts and identified key put and call contracts that might interest traders.

Put Options Insight

The notable put contract at the $61.00 strike price currently has a bid of $6.30. If an investor opts to sell-to-open this put contract, they commit to buying the stock at $61.00 while also collecting the premium. This would set the cost basis at $54.70 (excluding broker commissions). For those already interested in acquiring shares of ELF, this alternative could be more attractive than purchasing at the current price of $61.86/share.

Importantly, the $61.00 strike is about 1% below the current trading price, making it out-of-the-money by that margin. Current analytical data suggests there’s a 58% chance the put contract may expire worthless. The Options Channel will continue to monitor these odds, displaying a chart under the contract detail page. If the contract does expire worthless, the premium would yield a 10.33% return on the cash commitment, translating to an annualized rate of 87.67%—a metric we refer to as YieldBoost.

Call Options Analysis

On the call side, the contract at the $63.00 strike price currently bids at $6.30. Investors considering buying ELF shares at the current level of $61.86/share might look at selling a covered call. By doing so, they commit to selling the stock at $63.00 while also collecting the premium. This strategy could yield a total return of 12.03% if the stock is called away at the June 13th expiration (excluding dividends and broker commissions). However, significant upside may be missed if ELF shares rise sharply, making it crucial to examine the twelve-month trading history and the company’s fundamentals.

Below is a chart illustrating the trailing twelve-month trading history for e.l.f. Beauty Inc, highlighting the $63.00 strike in red:

As the $63.00 strike price is about 2% above the current trading price, there’s also a chance this covered call might expire worthless, allowing the investor to keep both the shares and the premium collected. Current analytical data suggests a 46% probability of this occurring. Options Channel will track these odds over time, offering chart outputs on both the current option’s trading history and likelihood of expiry. Should the call contract become worthless, the premium would yield a 10.18% additional return, or 86.45% annualized, which we also classify as YieldBoost.

Volatility Insights

The implied volatility for both the put and call contract examples stands at approximately 85%. On the other hand, the actual trailing twelve-month volatility, calculated using the last 250 trading days along with today’s price of $61.86, is about 70%.

For more options contract opportunities, explore StockOptionsChannel.com.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.