Bullish Case: Estee Lauder's recent price increase and strong brand presence, coupled with a shift to sustainability, offer potential for a positive outlook. The flat implied volatility term structure suggests market anticipation of stability, supporting a bullish scenario.

Bearish Case: Global economic headwinds, supply chain disruptions, and shifts in consumer behavior toward budget options continue to pressure Estee Lauder. Elevated short-term volatility indicates ongoing uncertainty, suggesting challenges may persist.

Potential Outcomes:

• Recovery: 35% chance, driven by strategic initiatives and brand strength.
• Continued Decline: 45% chance, due to market challenges and economic pressures.
• Volatility Spike: 20% chance, with potential for trading opportunities on uncertainty.

Trading Oracle: Focus on bearish credit spreads selling $85/$90 call spreads short-term due to anticipated declines. Hedging with long $75 puts offers a buffer if there's a turnaround. Capitalize on high implied volatility short-term with defined risk and leverage Helium's volatility edge for a 1-3 month outlook.

January 30, 2025