New Options Available for CAVA Group Inc Investors

Investors in CAVA Group Inc (Symbol: CAVA) witnessed the initiation of new options trading today, focusing on the May 16th expiration. With 73 days remaining until expiration, these new options present potential opportunities for sellers of puts or calls to earn higher premiums compared to contracts with shorter maturities. According to the YieldBoost formula from Stock Options Channel, one put and one call contract stand out within the new May 16th options chain.

### Put Contract Analysis

The put contract at the $80.00 strike price currently has a bid of $7.55. If an investor sells-to-open this put, they agree to purchase the stock at $80.00, while also collecting the premium, effectively lowering the cost basis of the shares to $72.45, excluding brokerage fees. For those already interested in acquiring shares of CAVA, this offers an appealing alternative to buying at the current market price of $82.48 per share.

Despite the attractiveness of this deal, it’s important to note that the $80.00 strike represents an approximate 3% discount to the current trading price, indicating it is out-of-the-money by that amount. Analytical data suggests there is a 62% chance the put contract could expire worthless. Stock Options Channel will monitor these odds over time and publish updates on their website, including a detailed chart for this contract. If the contract does indeed expire worthless, the premium would yield a 9.44% return on the cash commitment, translating to an annualized rate of 47.21%, a metric we term the YieldBoost.

Below is a chart displaying the trailing twelve-month trading history for CAVA Group Inc, with the $80.00 strike highlighted:

### Call Contract Analysis

Shifting our focus to the call options, the $85.00 strike price call contract currently offers a bid of $8.20. If an investor buys shares of CAVA at the present price of $82.48 and subsequently sells-to-open that call as a “covered call,” they commit to sell the stock at $85.00. Including the premium collected, this strategy yields a total return of 13.00%, assuming the stock is called away at the May 16th expiration, not accounting for broker commissions. However, in a scenario where CAVA shares appreciate significantly, investors may miss out on potential upside.

Below is CAVA’s trailing twelve-month trading history, with the $85.00 strike highlighted in red:

The $85.00 strike price represents a modest 3% premium over the current trading price, rendering it slightly out-of-the-money. Thus, there remains a significant possibility that this covered call contract would expire worthless. The analytical data currently estimates a 47% chance of that outcome. As with the put contract, Stock Options Channel will track these odds over time and provide updates. Should the covered call expire worthless, the premium would deliver an extra return of 9.94%, or 49.74% annualized, which we also refer to as the YieldBoost.

### Volatility Metrics

Implied volatility for the put contract is recorded at 68%, while the call contract has an implied volatility of 63%. In contrast, we calculate the actual trailing twelve-month volatility—based on the last 250 trading day closing values and today’s price of $82.48—to be 54%. For additional put and call options opportunities, please visit StockOptionsChannel.com.

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