EL Unusual Options: $2.7M Beauty Earnings (Aug 18)
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🌋 EL Volcanic Alert: $4.7M Whale Bets on Beauty Bounce!
📅 August 18, 2025 | 🔥 Unusual Score: 10/10 VOLCANIC
🎯 The Quick Take
Holy moly! Someone just dropped a MASSIVE $4.7 MILLION on EL call options just 4 days before earnings! 🚨 This isn't your neighbor Bob trading - this is institutional money making the biggest EL bet we've EVER seen (2,456x larger than average). With the stock already up 23% YTD and sitting at $91, this whale is betting on explosive upside through earnings on August 20. Buckle up! 🎢
📈 YTD Performance Check
EL has been on a recovery mission in 2025, up +23.01% year-to-date to $91.00. After bottoming near $50 in April, the stock has staged an impressive comeback, gaining over 80% from its lows! The chart shows strong momentum heading into earnings, with the stock breaking above key resistance at $85 just last week.
💰 The Options Tape Breakdown
📊 What Just Happened
| Time | Symbol | Side | Buy/Sell | Type | Expiration | Premium | Strike | Volume | OI | Size | Spot | Option Price |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 12:39:10 | EL | ASK | BUY | CALL | 2025-08-22 | $4.7M | $85 | 5,478 | 35 | 5,478 | $90.94 | $8.60 |
🤓 What This Actually Means
Translation for us regular folks: A massive institutional player just went ALL IN on EL calls! Here's the breakdown:
- 🐋 Premium Paid: $4.7 MILLION (that's not a typo!)
- 📍 Strike Price: $85 (already $5.94 in-the-money)
- ⏰ Expiration: August 22, 2025 (just 4 days away!)
- 📊 Volume: 5,478 contracts (156x the existing open interest!)
- 💵 Break-even: $93.60 (needs just 2.9% more upside)
Real talk: This trader needs EL above $93.60 by Friday to make money. That's a bold bet with earnings on Tuesday!
🔥 The Unusual Score Meter
UNUSUAL SCORE: 10/10
[🟩🟩🟩🟨🟨🟨🔴🔴🔴🔴]
└─ VOLCANIC ACTIVITY ─┘
The Numbers That Matter: - 📊 2,456x larger than average EL option trade - 🎯 100th percentile - literally the biggest we've seen - 🚀 Z-score: 165 (anything above 3 is extreme!) - ⏱️ Days between similar trades: INFINITY (this has NEVER happened before!)
🎪 Catalyst Calendar
🔔 Immediate Catalyst: Q4 2025 Earnings (August 20, 2025)
Mark your calendars! EL reports in just 2 days with consensus expectations of $0.08 EPS (down 87.5% YoY) and $3.4B revenue (down 12.2%). But here's the kicker - recent EPS revisions are UP 3.5% in the past 30 days, and the company has an earnings ESP of +53.86%, suggesting a likely beat!
🚀 Near-Term Catalysts
- Beauty Reimagined Progress: New CEO Stéphane de La Faverie's $1.5B restructuring plan targeting $800M-$1B annual savings by 2027
- China Recovery Signals: Watch for any signs of consumer sentiment improvement in mainland China (30% of revenues)
- Travel Retail Stabilization: Asia travel retail was down 28% organically in Q3 - any improvement is bullish
📅 Long-Term Catalysts
- Workforce Optimization: 5,800-7,000 job cuts (10% of workforce) to drive efficiency
- AI Integration: Enhanced digital capabilities and consumer targeting
- Premium Brand Power: Strong portfolio including La Mer, Tom Ford, MAC positioning for luxury recovery
🎲 Price Targets & Probabilities
🚀 Bull Case: $98+ (30% chance)
If EL beats earnings and shows China stabilization, we could see a gap up to Deutsche Bank's $98 price target. The whale's calls would print 50%+ returns!
⚖️ Base Case: $88-$93 (50% chance)
Modest earnings beat with mixed guidance keeps us range-bound. The whale breaks even or sees small gains/losses.
😰 Bear Case: Below $85 (20% chance)
Earnings disaster or China deterioration sends us back to support. The whale's $4.7M goes up in smoke! 💸
💡 Trading Ideas
🛡️ Conservative: "Beauty on Sale"
- Buy shares at $91 with stop at $85
- Target: $98 (Deutsche Bank target)
- Risk/Reward: 1:1.2
- Why it works: Limited downside with dividend support at $0.35/share
⚖️ Balanced: "Poor Man's Whale"
- Buy Sept $90 calls around $6.50
- Sell Sept $100 calls at $2.50 (creating a spread)
- Net cost: ~$4.00 per spread
- Max profit: $6.00 if above $100
🚀 Aggressive: "YOLO with Training Wheels"
- Buy Aug 23 $92 calls (weekly after earnings)
- Cost: ~$2.50 per contract
- Stop: 50% loss
- Why it works: Cheaper lottery ticket on earnings momentum
⚠️ Risk Factors
Let's keep it real - here's what could go wrong:
- 🇨🇳 China Dependency: 30% of revenues from a shaky market
- 💸 Dividend Cut Pain: Already slashed dividend 50% from $0.66 to $0.35
- 📉 Recent Loss: Posted surprising $580M operating loss in Q2
- 🏃 Competition: L'Oréal and Shiseido eating market share
- ⏰ Timing Risk: 4-day expiration is basically gambling!
🧠 The Trader's Corner
This $4.7M bet is telling us something BIG. Here's my take:
The Smart Money Knows Something: Nobody risks $4.7M on 4-day options without conviction. This whale either: 1. Has high confidence in an earnings beat 2. Knows about positive pre-announcement vibes 3. Is hedging a massive short position (less likely given the premium)
Historical Context: EL has been decimated by China weakness, but at $91, we're still 40% below 2023 highs. The new CEO's "Beauty Reimagined" strategy is a massive transformation that could unlock value.
Technical Setup: Breaking above $85 resistance with volume is bullish. Next resistance at $95, then psychological $100.
🎯 The Bottom Line
Real talk: This is the BIGGEST options bet we've EVER seen on EL - someone just wagered $4.7M that this beauty giant is about to surprise the market. With earnings in 2 days and the stock already on a tear, this looks like an institutional player positioning for a major catalyst.
Your Action Plan: - 📈 If you're bullish: Consider September calls for more time, or shares for safety - 👀 If you're watching: Set alerts at $85 (support) and $95 (resistance) - 🛡️ If you're cautious: Wait for post-earnings dust to settle
Remember: When whales make moves THIS BIG, it pays to pay attention. But never bet more than you can afford to lose - even whales sometimes beach themselves! 🐋
⚠️ Options trading involves significant risk and can result in 100% loss. This analysis is for educational purposes only and not financial advice. Always do your own research and consider your risk tolerance.
🔍 Data accuracy note: All trade data and calculations verified as of August 18, 2025