Johnson & Johnson (JNJ) and the $1 Million Bearish Bet

Johnson & Johnson's January 2015 102-strike put is in focus today

Dec 23, 2014 at 1:35 PM
facebook X logo linkedin


Johnson & Johnson (NYSE:JNJ) is lower today, as uncertainty surrounding Express Scripts Holding Company's (NASDAQ:ESRX) exclusive pact with AbbVie Inc (NYSE:ABBV) continues to create headwinds throughout the pharmaceutical sector. In the equity's options pits, put volume has popped to seven times what's typically seen at this point in the day, with one speculator betting big on an extended decline for JNJ over the next several weeks.

Specifically, the January 2015 102-strike put is JNJ's most active option by a mile. The majority of the activity here occurred when a massive block of 16,994 contracts was bought to open for roughly $1.1 million (number of contracts * $0.65 premium paid * 100 shares per contract).

This is the most the speculator stands to lose, should JNJ finish north of $102 at the close on Friday, Jan. 16, when front-month options expire. Profit, meanwhile, will accrue on a move south of the at-expiration breakeven price of $101.35 (strike less premium paid).

Unfortunately, today's option bear has two important technical levels to contend with. Specifically, the equity's 200-day moving average showed its might as support during last week's quick retreat, while JNJ's 160-day moving average is helping to contain today's pullback. Longer term, Johnson & Johnson (NYSE:JNJ) has surged roughly 62% since mid-June 2012 to trade at $104.20, thanks to a lift from these two trendlines.

Daily Chart of JNJ Since June 2012 With 160-Day and 200-Day Moving Averages
 

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