Centene Options Volume Peaks on Buyout Buzz

Calls and puts are flying off the shelves today

Mar 27, 2019 at 10:37 AM
facebook X logo linkedin

The shares of Centene Corp (NYSE:CNC) are spiraling, after the U.S. health insurer said it was buying rival WellCare Health Plans (WCG) in a cash-and-stock deal valued at $17.3 billion, including debt. The purchase is expected to boost CNC's Medicaid division, as well as its exposure to the Medicare Advantage market, and comes amid a renewed effort from the Trump administration to repeal Obamacare.

At last check, CNC shares were down 7.4% at $50.80, on track for their fourth straight loss. The stock is down 12.1% year-to-date, but the round $50 level appears to be emerging as support, though, a region that marks Centene's early 2018 lows.

Options traders have been quick to react, with roughly 18,000 calls and 3,507 puts on the tape -- 20 times what's typically seen at this point, and total options volume already at a new 52-week peak.

Most active is the April 55 call, where it looks like speculators could be selling to open the options. If this is the case, they're setting a short-term ceiling for CNC stock. Traders could also be anticipating a volatility crush. Short-term volatility expectations have spiked today, per Centene's 30-day at-the-money implied volatility of 37.1% -- in the 96th percentile of its annual range.


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