Trade Alert: GLP-1 Aftershocks
Taking advantage of today's drop to bet on a beneficiary of the explosion in weight loss drug use.
The GLP-1 Aftershocks Trade
One macro theme in our Market Watchers X list has been the second-order effects of GLP-1 drugs. When people lose a meaningful amount of weight, many of them look for “last-mile” fixes—tightening skin, smoothing contours, finishing touches that diet and exercise (or injections) don’t deliver. That follow-on demand shows up in cash-pay aesthetics and minimally invasive body-contouring, where procedure volumes and clinic utilization can drive operating leverage quickly. Some of these businesses also carry razor/razor-blade dynamics (devices + consumables), which helps margins once the installed base expands.
Today, one of the pure-plays in that lane sold off hard on a heavy-volume downdraft. We don’t see a change to the thesis; we do see better pricing on optionality. So we’re putting on a cheap, uncapped-upside structure that leans into elevated implied volatility on the dip.
Why this setup
Tailwind: GLP-1 adoption begets aesthetic “finish” procedures; this is a multi-year demand story, not a one-print trade.
Catalyst path: Two earnings windows on our timeline if the company sticks to its recent cadence.
Asymmetry: Use rich put IV to subsidize calls, keeping upside open while keeping out-of-pocket small.
How we’re expressing it (high level)
A risk-reversal: long calls / short puts on a longer-dated expiry.
Net debit is small by design; upside remains uncapped; we’re comfortable owning shares near our short-put level if the thesis is wrong in the short run.
Risk notes
Cash-pay demand can be cyclical; if macro wobbles, appointments slip.
If the stock trades below our short-put strike, we may be assigned; that’s acceptable sizing for us and part of the plan.
Paid section (below the fold) includes: exact strikes & expiration, the limit prices we used (and what we’d still bid), our simple exit triggers for both legs.
