LLY's Bullish Options Setup: Calls at $1200 Signal High Conviction, RSI Dips Suggest Entry Opportunities

• LLY surges 2.2% to $1,064.71, breaking above 30D SMA of $1,023.47
• Call open interest dominates at $1,200 and $1,180 strikes, with 4,124 contracts at $1,200
• RSI at 35.94 hints at oversold conditions, while Bollinger Bands show price near upper bound

Here’s the takeaway: LLY’s options market is screaming upside conviction, with heavy call buying at strikes 10–15% above current price. Combine that with technicals pointing to a potential rebound, and this stock is setting up for a breakout trade. Let’s break it down.

Bullish Calls at $1,200 and $1,180: What’s the Play?

LLY’s options chain is skewed hard to the upside. This Friday’s $1,200 call (LLY20251219C1200) has 4,124 open contracts—the highest of any strike. That’s not just retail noise; it’s institutional money betting on a sharp move. The next big call is at $1,180 (LLY20251219C1180) with 2,800 contracts.

But here’s the twist: the put/call ratio for open interest is 0.858, meaning calls outweigh puts. That suggests market participants are either bullish or hedging against a rally. The puts at $1,000 (LLY20251219P1000) with 2,014 contracts might be there for downside protection, but they’re dwarfed by the call volume.

News Flow: Why This Isn’t Just a Options Play

Eli Lilly’s recent Phase 3 trial results for orforglipron and retatrutide are fueling this move. The data shows orforglipron maintaining weight loss after switching from injectables, while retatrutide’s 28.2% weight loss outpaces competitors. Analysts are calling these “blockbuster” candidates, and the FDA’s priority review adds urgency.

The market’s reaction? Investors are pricing in a shift from injectables to oral therapies, with Lilly’s drugs positioned to capture market share. That’s why the $1,200 calls feel justified—this isn’t just a short-term pop. It’s a structural play on obesity drug adoption.

Actionable Trades: Calls, Stock, and Exit Targets

For options traders: The LLY20251226C1100 (next Friday’s $1,100 call) is a safer bet if you want to play the rally without overpaying. With 2,422 contracts in open interest, it’s a liquid strike that could benefit from a 5–7% pop. If you’re all-in, the LLY20251219C1200 offers higher reward but needs a strong close above $1,180 to justify the premium.

For stock buyers: Consider entry near $1,040–$1,050 if the price holds above the 30D SMA. A break above $1,079 (today’s high) would target the Bollinger upper band at $1,111.16. A stop-loss below $1,024.58 (30D support) would protect against a reversal.

Volatility on the Horizon: Balancing Optimism with Caution

Yes, the data is bullish—but don’t ignore the risks. The RSI at 35.94 suggests a rebound is likely, but the MACD histogram (-5.56) shows momentum is waning. That means the move could stall if the stock fails to break $1,100. Also, Novo Nordisk’s oral Wegovy could compete with Lilly’s orforglipron, adding near-term uncertainty.

Bottom line: LLY is a high-conviction trade for those who can stomach the volatility. The options market is pricing in a $1,200+ close by year-end, and the fundamentals are strong enough to justify it. But keep a tight stop and watch that 30D support like a hawk. This one’s for the bold.