Options Bulls Brush Off Johnson & Johnson's Lowered Outlook

A stronger U.S. dollar is weighing on international sales

Digital Content Manager
Jul 19, 2022 at 10:05 AM
facebook twitter linkedin

Johnson & Johnson (NYSE:JNJ) took over the earnings confessional earlier to report a second-quarter earnings and revenue beat, thanks in part to the double-digit sales growth of cancer drug Darzalex and Crohn's disease drug Stelara. However, the company slashed its full-year adjusted profit outlook, noting a stronger U.S. dollar is weighing on international sales. At last check, JNJ is up 0.4% at $174.96.

The equity took a step back after hitting an April 25, record high of $186.69, but bounced off the $167 region in mid-June -- its lowest level since March -- to reclaim support from its 180-day moving average. Over the past nine months, Johnson & Johnson stock has added 8.8%.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), JNJ's 50-day put/call volume ratio of 1.01 sits higher than 93% of readings from the past 12 months. This means long puts have been getting picked up at a much faster-than-usual pace in the last 10 weeks.

Today's options are more optimistic. So far, 5,969 calls and 2,991 puts have crossed the tape, or triple the intraday average. The most popular contracts are the 7/22 182.50- and 180-strike calls.




These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!


Common mistakes options traders make


Special Offers from Schaeffer's Trading Partners