Bullish Case: The acquisition of Olive & June signals strategic growth in the beauty sector, potentially leading to revenue increases. High recent implied volatility suggests upcoming price movements, creating opportunities for bullish trades if market sentiment shifts positively.

Bearish Case: Continued market uncertainty and the historical price decline raise concerns about operational challenges. If sales underperform, the stock may drop further, compounded by bearish sentiment and increased put option demand.

Potential Outcomes:

• 60% chance of volatility spike before earnings, leading to price increase.
• 40% chance of missing earnings expectations, causing 10% drop.
• 30% chance of stabilizing around $75 from product growth.

Trading Oracle: Consider a bearish credit spread by selling $75.00 call options (delta: 0.44) and buying $80.00 calls (delta: 0.18), capturing high implied volatility and positioning for a potential drop. This leverages the current market dynamics effectively and minimizes risk.

December 01, 2024