CAVA March 13th Options Begin Trading

CAVA options note: the $60 put is bid at $3.45 (sell-to-open would set an effective cost basis of $56.55 vs. the current $61.19 share price) and models a 59% probability of expiring worthless; that premium represents a 5.75% return (48.86% annualized) if unassigned. The $62 covered call is bid at $3.80 and, if sold against stock purchased at $61.19, would deliver a 7.53% total return if called at the March 13 expiration, with a 46% chance of expiring worthless and a 6.21% yield boost (52.77% annualized). Implied volatilities are 60% for the put and 68% for the call, versus a trailing 12‑month volatility of 58%.

Analysis

Market structure: Short-dated option sellers (retail and income-oriented funds) are the immediate winners — selling the Mar 13 $60 put for $3.45 or the $62 covered call for $3.80 generates 5.8–7.5% gross returns over ~2–6 weeks (48–53% annualized) if contracts expire worthless. CAVA shareholders who are forced into assignment or face capped upside (via widespread covered calls) are the losers; heavy sell-to-open activity can compress upside and create asymmetric downside risk near strikes. The 60–68% IV vs 58% realized implies risk premium is elevated but not extreme, signaling demand for income and hedging rather than fundamental repricing; delta-hedging flows may create short-term price pressure around $60–62, but cross-asset impact (bonds, FX, commodities) is negligible except small cap consumer discretionary flow effects.

Key Decisions for Investors

• Sell-to-open CAVA (ticker CAVA) Mar 13 $60 put for $3.45 only if you are willing to buy at $56.55: size exposure so the cash commitment equals 1% of portfolio NAV; set automatic buy-to-close at a 6% stock drop (~$57.50) or if IV jumps >15 pts to limit tail loss.
• Establish a covered-call buy-write: buy CAVA up to 2% NAV at market (~$61.19) and sell Mar 13 $62 call for $3.80; target 7.5% gross to expiry, roll out only if next-month call fetches >=$2.50 or close on a 10% drawdown from entry.
• Prefer defined-risk credit structure: sell CAVA Mar 13 $60 put and buy Mar 13 $55 put (bull-put spread), limit allocation to 0.5–1% NAV per spread and only if net credit >=$2.50 (implying >30% of $5 width).
• Portfolio risk control: trim other high-IV, consumer-discretionary single-name exposures by 1–3% NAV and buy SPY 30-delta 30–45 day puts equal to 1–2% NAV if broader market breadth deteriorates; monitor CAVA same-store sales/guidance and next 30-day catalysts to re-assess.