Cigna Plunges 8.38%: Is This the Start of a New Bearish Phase?

Summary
• Cigna’s Q2 2025 earnings report showed a 11% revenue surge to $67.2 billion, but net income dipped slightly to $1.5 billion.
• The stock opened at $295.83 and plunged to an intraday low of $269.05, trading at $272.905 by 7:23 PM ET.
• Turnover spiked to 3.67 million shares, with a 52-week low of $262.03 now within striking distance.

Today’s sharp selloff in Cigna (CI) has left investors scrambling for answers. Despite a robust earnings report, the stock’s 8.38% decline has outpaced the broader market and exposed vulnerabilities in its stop-loss medical cost structure. This article unpacks the drivers behind the move, sector dynamics, and actionable options strategies for navigating the volatility.

Q2 Earnings Outperform, But Stop-Loss Costs Trigger Sell-Off
Cigna’s Q2 results highlighted strong performance in its Evernorth Health Services division, with 17% revenue growth and 5% operating income gains. However, the stock collapsed after the company warned of elevated stop-loss medical costs in its Cigna Healthcare segment. These costs, tied to employer-sponsored self-funded plans, pushed the medical care ratio to 83.2% from 82.3% year-over-year. While the company reaffirmed its $29.60/share adjusted income outlook, investors reacted to the near-term margin pressures and uncertainty around 2026 pricing, sparking a wave of profit-taking and short-term bearish positioning.

Health Care Sector Under Pressure as UNH Drags
The health care sector (IXJ) remains mixed, with UnitedHealth Group (UNH), Cigna’s sector leader, down 5.65% intraday. While Cigna’s drop is sharper, both stocks face similar challenges: rising medical costs and regulatory scrutiny. However, Cigna’s unique exposure to stop-loss policies—distinct from rivals’ Medicaid/Medicare struggles—has amplified its volatility. The sector’s broader trend reflects investor caution over margin resilience in a high-cost environment.

Options and ETFs to Hedge, Short, or Ride the Volatility
• 200-day average: 312.30 (above current price)
• RSI: 39.70 (oversold)
• MACD: -5.68 (bearish divergence)
• Bollinger Bands: 286.08–320.40 (price near lower band)
• Kline pattern: Short-term bullish, long-term ranging

Cigna’s technicals suggest a potential rebound from oversold RSI levels but bearish momentum from the MACD and Bollinger Band proximity. The 200-day average at $312.30 remains a critical resistance. For options, two contracts stand out:

• CI20250808P262.5 (Put Option)
- Strike: $262.50 | Expiration: 2025-08-08 | IV: 30.16% | Delta: -0.2027 | Theta: -0.0482 | Gamma: 0.0219 | Turnover: 2,090
- IV (Implied Volatility): Suggests moderate near-term risk.
- Delta: Moderate sensitivity to price drops.
- Gamma: Strong sensitivity to price movement, ideal for volatile scenarios.
- Turnover: High liquidity ensures easy entry/exit.
- Why it stands out: This put option offers leverage (181.72% ratio) and is positioned just below the 52-week low, with a 375% price change ratio, making it a high-conviction bearish play.

• CI20250808C280 (Call Option)
- Strike: $280.00 | Expiration: 2025-08-08 | IV: 32.02% | Delta: 0.3093 | Theta: -0.4795 | Gamma: 0.0257 | Turnover: 25,223
- IV: Reflects market uncertainty.
- Delta: Moderate directional exposure.
- Gamma: Strong sensitivity to price swings.
- Turnover: Exceptionally high liquidity.
- Why it stands out: A 102.86% leverage ratio and -86.55% price change ratio position this call as a potential short-term rebound trade if support holds at $269.05.

Payoff Calculation:
- Put Payoff (5% downside): $286.00 → $23.50 gain.
- Call Payoff (5% upside): $286.00 → $6.00 gain.

Hook: Aggressive bears target CI20250808P262.5 for $262.50 breakeven; bulls consider CI20250808C280 into a bounce above $280.

Backtest The Cigna Stock Performance
The backtest of an intraday percentage change of less than -8% shows a positive impact on the entire market, with the maximum return during the backtest period being 0.76% on the maximum return day, which is July 31, 2025. This indicates that such a significant intraday plunge can often lead to favorable market movements in the short term.

Act Now: Cigna’s Volatility Offers High-Return Opportunities
Cigna’s sharp selloff reflects short-term margin concerns but not long-term operational damage. The stock’s oversold RSI and proximity to its 52-week low suggest a potential rebound, though stop-loss pressures linger. Investors should monitor the $269.05 intraday low and the 200-day average at $312.30 as key levels. Meanwhile, UnitedHealth Group’s 5.65% decline underscores sector-wide fragility. For those seeking leverage, the CI20250808P262.5 put and CI20250808C280 call offer high-reward setups. Watch for a $269.05 breakdown or a rebound above $280 to dictate next steps.