UnitedHealth Stock Hits 52-Week Lows on Company Warnings

Options traders are targeting UNH at six times the intraday average volume

Deputy Editor
Jun 14, 2023 at 10:54 AM
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UnitedHealth Group Inc (NYSE:UNH) is dragging health insurer's lower today, after the company warned of greater medical costs in the second quarter and noted a higher-than-expected number of surgeries among adults aged 65 and older over the last couple months. At last glance, UNH was down 7.4% at $454.93. Earlier dropping as low as $445.68 -- its lowest level since November 2021 -- UnitedHealth Group stock is down 14.2% year-to-date. 

Options traders are chiming in at six times what's typically seen at this point, ahead of tomorrow's ex-dividend day. So far, 20,000 calls and 16,000 puts have been exchanged. Expiring at the end of this week, the June 450 put and 460 call are seeing the most activity, with new positions being opened at the latter. 

Over the past 10 weeks, calls have been much more popular than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), UNH's 50-day call/put volume ratio of 1.89 ranks higher than 96% of readings from the past year. 

Now looks like a good time to weigh in on UNH with options, too, per its Schaeffer's Volatility Index (SVI) of 19%, which ranks in the low 6th percentile of its 12-month range. This means options traders are pricing in low volatility expectations at the moment. 

Analysts are of similarly bullish sentiment. Of the 19 in coverage, 17 carry a "buy" or better rating. 

 

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