Billion-Dollar Acquisition Sends UnitedHealth Stock Lower

Option traders have rarely been more bearish on UNH

Digital Content Manager
Jan 6, 2021 at 10:13 AM
facebook X logo linkedin


UnitedHealth Group Inc (NYSE:UNH) this morning said it will acquire Change Healthcare (CHNG) for $7.84 billion in cash, or $27.75 per share -- a 41.2% premium to Change stock's closing price on Tuesday. The company hopes to strengthen its healthcare technology services unit under the Optum division. UNH is down 2.2% at $337.31, while CHNG is surging, up 33.3% to trade at a fresh high of $24.31. 

While UNH is falling back today, the security did hit a peak of $367.95 in early November. The security has since traded just south of this area, stalling out at the $358 level and later the $351 mark. Though the shares are taking a breather, the 60-day moving average has provided solid support at the charts since this pullback, and the equity still sports a year-over-year lead of 18.3%. 

Meanwhile, sentiment in the options pits has been quite bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) UNH sports a 10-day put/call volume ratio of 1.42, which stands higher than all but 6% of readings from the past year. This is echoed in the security's Schaeffer's put/call open interest ratio (SOIR) of 1.19, which sits in the 89th percentile of its annual range, suggesting short-term option traders have rarely been more put-biased. 

What's more, options are relatively affordable right now. This is per the equity's Schaeffer's Volatility Index (SVI) of 33% which stands higher than just 18% of readings from the past 12 months, indicating option players are pricing in relatively low volatility expectations at the moment. 

 

 

 

 

 

 

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