HUM calls are popular after the payment increases were higher than initially expected
Healthcare stock Humana Inc (NYSE:HUM) is leading its sector today, up 10.7% to trade at $202.41, after the Center for Medicare & Medicaid Services completed its proposed payment increase to privately run Medicare Advantage plans for 2027. The raise of 2.48% was significantly higher than the initial 0.9% proposal on Jan. 27, news that sent HUM 21.1% lower.
Now, the stock is trading at its highest level since that bear gap. Despite today's gains, the shares are 23.8% lower in 2026, and fell to a 10-year low of $163.11 on March 20. Sector peers UnitedHealthcare (UNH) and CVS Health (CVS) are up 8.2% and 5.7% this morning, respectively.
Despite Humana calls ruling puts on an absolute basis, the rate of put buying has picked up. HUM's 10-day put/call volume ratio of 0.96 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 79% of readings from the past year.
Today though, calls are flying off the shelves. In just the first hour of trading, 4,953 calls are changing hands, volume that's six times the average intraday amount. The weekly 5/1 235-strike call is the most popular, with new positions being bought to open.