Calls Popular Ahead of UnitedHealth Group Earnings

UnitedHealth Group Inc. (UNH) will report earnings on Thursday morning

Digital Content Group
Apr 13, 2015 at 11:21 AM
facebook X logo linkedin

UnitedHealth Group Inc. (NYSE:UNH) is moving higher today, thanks to a positive note from Jefferies. The brokerage firm raised its opinion on the Dow component to "buy" and upped its price target to $141. The equity was last seen 1.2% higher at $120.44, with options bulls rushing to the scene. Calls are crossing the tape at more than double the normal intraday pace, outnumbering puts by a nearly 5-to-1 margin.

The option seeing the most action is the weekly 4/24 121-strike call, where over three times as many contracts have crossed compared to the next closest option. Data hints at buy-to-open activity here, as traders bet on the equity to topple $121 by the close next Friday, when the series expires.

Speculators are grabbing these options ahead of the company's earnings release, before the open this Thursday. This may not be a bad idea, considering UNH's post-earnings price history. In the session following the company's last three reports, UNH has gained an average of 3%.

Looking back, bullish betting is nothing new among the stock's speculators. UNH's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.67 is higher than 74% of all such readings from the past year. Put simply, call buying has been more popular than normal in recent weeks.

UnitedHealth Group Inc. (NYSE:UNH) has been in a steady uptrend for over two years now, adding over 19% in 2015 alone and recently hitting a record high. It looks like short sellers are starting to get the picture. During the two most recent reporting periods, short interest has declined by over 15%.

Weekly Chart of UNH since January 2013

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.

Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!




Rainmaker Ads CGI