Potential Walmart Deal Sends Humana Stock Soaring

HUM options traders have been growing bearish

Managing Editor
Apr 2, 2018 at 9:40 AM
facebook X logo linkedin

Humana Inc (NYSE:HUM) stock is up 6.1% to trade at $285.25, thanks to a Wall Street Journal report last week saying retail giant Walmart (WMT) was in talks to potentially buy the health insurer. A number of analysts believe the move could be in response to Amazon's (AMZN) push into healthcare. Meanwhile, Jefferies thinks such a deal would make sense for both parties, while Piper Jaffray does not see the fit given Walmart's lack of healthcare footprint. 

Nevertheless, Humana stock has broken through the $280 level that stifled its February breakout attempt. The shares rocketed to a record of $293.35 on Jan. 29, but pulled back to their supportive 50-day moving average, and since then have consolidated between the $260-$275 level. The equity was up 30% year-over-year even before today's jump.

In the options pits, puts have become more popular in recent weeks, despite low absolute volumes. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows HUM with a 10-day put/call volume ratio of 2.30, which indicates long puts have more than doubled calls in the past two weeks. Should Humana stock continue to break out, it could lead to an unwinding of these bearish bets. 

Echoing this, Humana stock's Schaeffer's put/call open interest ratio (SOIR) of 1.71 ranks in the 79th annual percentile. This elevated ranking shows put open interest in contracts expiring within three months is much higher than normal compared to call open interest.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI