ODDITY Tech Plummets 21.67%: What's Behind the Sudden Sell-Off?

Summary
• ODDITY Tech (ODD) plunges 21.67% intraday to $57.99, erasing $16 billion in market cap
• Q2 earnings and sales beat estimates, with DTC growth up 29.6% and full-year guidance raised
• Options chain shows extreme volatility: 71.57% implied volatility on 8/15 $55 put and 362.96% price change ratio

ODDITY Tech’s stock has imploded in late trading, dropping 21.67% to $57.99 as of 7:34 PM EDT. Despite a blockbuster Q2 report—$241M in sales, 25% YoY growth, and a $69.5M adjusted EBITDA—the stock’s collapse defies conventional logic. The move coincides with a broader selloff in the Personal Products sector, where Estee Lauder (EL) also fell 1.5%. With options volatility spiking and technical indicators flashing red, investors are scrambling to decode the catalyst.

Q2 Earnings Beat and DTC Growth Fail to Stem Sharp Sell-Off
ODDITY’s Q2 results were stellar: 25% YoY sales growth, 92c adjusted EPS (beating estimates by 4.55%), and a 29.6% DTC sales surge. The company raised full-year guidance to $799M–$804M and announced a third brand targeting medical-grade skincare. Yet the stock cratered post-earnings. The disconnect suggests market skepticism about sustainability—despite strong fundamentals, investors may be pricing in profit-taking after a 53.26% YTD rally. A JP Morgan note titled 'Oddity's 20% sell-off defies the numbers' hints at valuation concerns, while the options chain shows extreme put buying (e.g., ODD20250815P55 with 71.57% IV and 41.73% leverage ratio), signaling bearish positioning.

Personal Products Sector Mixed as ODDITY Tech Trails Peers
The Personal Products sector is split: Estee Lauder (EL) fell 1.5%, while L’Oréal (LRLCY) and Unilever (UL) posted modest gains. ODDITY’s 21.67% drop outpaces sector weakness, reflecting its speculative nature. The company’s DTC-heavy model (98% of sales) contrasts with traditional retailers like Ulta (ULTA), which saw stable performance. ODDITY’s expansion into medical-grade skincare and biotech labs differentiates it, but the sector’s focus on margin stability and recurring revenue may have left investors wary of its aggressive growth bets.

Bearish Options and ETFs to Capitalize on Volatility
• 200-day MA: $52.61 (below current price) • RSI: 53.16 (neutral) • MACD: -0.207 (bearish) • Bollinger Bands: $66.86–$75.46 (price at lower band)

Key levels to watch: $57.19 (intraday low), $66.86 (lower Bollinger Band), and $74.04 (previous close). The RSI at 53.16 suggests neutral momentum, but the MACD histogram (-0.207) and negative signal line (-0.394) confirm bearish bias. The 200-day MA at $52.61 is a critical support level; a break below $55 could trigger further selling.

Top Options:
• ODD20250815P55 (Put): Strike $55, Expiry 8/15, IV 71.57%, Leverage 41.73%, Delta -0.288, Theta -0.0426, Gamma 0.0470, Turnover $33,084
- IV (71.57%): High volatility suggests strong bearish sentiment
- Leverage (41.73%): Amplifies gains if price drops
- Delta (-0.288): Moderate sensitivity to price declines
- Theta (-0.0426): Time decay manageable for short-term play
- Gamma (0.0470): Positive gamma increases delta as price falls
- Turnover ($33,084): High liquidity ensures easy entry/exit
- Payoff (5% downside): $5.50 profit per contract (max(0, $55 - $55.50))
- Why it stands out: High leverage and IV make this put ideal for a sharp drop below $55.

• ODD20250919P50 (Put): Strike $50, Expiry 9/19, IV 62.32%, Leverage 36.06%, Delta -0.201, Theta -0.0272, Gamma 0.0217, Turnover $20,716
- IV (62.32%): Mid-range volatility with room for expansion
- Leverage (36.06%): Strong amplification for a $50 target
- Delta (-0.201): Lower sensitivity but stable gamma
- Theta (-0.0272): Minimal time decay for longer-term play
- Gamma (0.0217): Moderate sensitivity to price movement
- Turnover ($20,716): Sufficient liquidity for position sizing
- Payoff (5% downside): $10 profit per contract (max(0, $50 - $55.50))
- Why it stands out: Balances leverage and time decay for a mid-term bearish bet.

If $55 breaks, ODD20250815P55 offers immediate short-side potential. Aggressive bears may consider ODD20250919P50 into a test of $50.

Backtest ODDITY Tech Stock Performance
After a -22% intraday plunge, ODDITY Tech's stock would have experienced a significant drop, with a new price reflecting the sharp decline. Here's a backtest of its performance:1. Impact of the Plunge: ODDITY Tech's stock price decreased by 20.48% on the day of the plunge. This means that if an investor had a $100 investment in the stock, it would have been worth $80 after the drop.2. Post-Plunge Performance: While the stock price would have been lower, it's important to note that the company's fundamentals remained strong. ODDITY Tech reported a 25% sales growth and a $79 million net income in Q2. However, the market's skepticism about its expansion into medical-grade skincare and biotech R&D may have continued to affect the stock price.3. Technical Indicators: The stock's technical indicators showed a mixed picture. The Relative Strength Index (RSI) entered the oversold zone, suggesting that the stock may have been overextended to the downside and could see a bounce in the near term. However, the selling pressure continued, indicating a possible continuation pattern rather than a bullish turnaround.4. Options Chain Activity: The options chain activity showed a significant increase in the price of puts, signaling bearish bets. This could indicate that investors were anticipating further declines in the stock price.5. Analyst Ratings: Analysts had a mixed outlook on ODDITY Tech. While some had a buy rating with a high upside potential, others had a hold rating with a significant downside risk. This divergence in analyst opinions could have contributed to the stock's volatility following the plunge.In conclusion, after a -22% intraday plunge, ODDITY Tech's stock would have faced continued uncertainty due to market skepticism about its expansion plans and mixed analyst ratings. While the potential for a bounce could exist due to oversold technical indicators, the overall sentiment remained bearish.

Act Now: ODDITY Tech's Volatility Presents High-Risk Opportunities
ODDITY’s 21.67% drop reflects a mix of profit-taking and valuation skepticism, but the fundamentals remain intact. The key is whether the stock can hold above $55 to avoid triggering a cascade of puts. Watch for a breakdown below $52.61 (200-day MA) or a rebound above $66.86 (lower Bollinger Band). Estee Lauder (EL)’s 1.5% decline underscores sector fragility, but ODDITY’s aggressive growth strategy could still attract buyers at a discount. For now, the ODD20250815P55 and ODD20250919P50 options offer the best risk/reward for bearish bets. If $55 holds, consider a short-term bounce trade; if not, the puts could deliver outsized gains.