Eli Lilly (LLY) Options Signal Bullish Bias: Key Strike Levels at $737.5 and $710 Highlight Strategic Entry Points for Traders

• Eli Lilly’s stock (LLY) surges 1.47% to $725.09, trading above 30D support at $730.99 but below 200D resistance at $753.36.
• Options data reveals heavy call open interest at $737.5 and $750, while puts cluster at $710 and $715, signaling a potential breakout or pullback.
• Positive news on $5B Virginia facility, obesity drug trials, and Alzheimer’s approvals could drive momentum, but technical indicators hint at near-term volatility.

The confluence of bullish options positioning and recent corporate milestones suggests LLY is poised for a directional move. With call open interest outpacing puts by a 0.86 ratio and key resistance levels in play, traders should prepare for a potential breakout above $732.59 or a defensive pullback to $719.43. The stock’s short-term bearish trend clashes with long-term fundamentals, creating a high-conviction trade setup.

OTM Options Distribution and Market Sentiment: Calls at $737.5 and Puts at $710 Signal Mixed but Bullish Bias

The options chain for LLY reveals a clear concentration of open interest at critical strike levels. For Friday expiration, the $737.5 call (OI: 2,067) and $750 call (OI: 1,546) dominate the call side, while the $710 put (OI: 791) and $715 put (OI: 767) anchor the put side. This distribution suggests institutional positioning for a moderate rally or a defensive hedge against a pullback. The put/call ratio of 0.86 (put OI: 198,756 vs. call OI: 229,283) further reinforces a net bullish bias, as traders are betting more aggressively on upside potential.

The absence of block trades in the data implies no major institutional overhangs, but the heavy call OI at $737.5 and $750 could act as a self-fulfilling prophecy. If the stock breaks above $732.59 (30D support), the $737.5 call becomes a liquidity magnet, potentially accelerating the move toward $745.48 (Bollinger Middle Band). Conversely, the $710 put could see increased demand if the stock tests the lower Bollinger Band at $719.43, offering a safety net for longs.

Corporate News and Market Narrative: Capital Expansion and Drug Approvals Fuel Optimism

LLY’s recent news flow is overwhelmingly positive, with $5B in Virginia manufacturing, $6.5B Texas obesity plant, and multiple drug approvals (Inluriyo, Kisunla, Jaypirca) reinforcing its growth trajectory. The 10.5% weight loss results for orforglipron and cardiovascular benefits of Mounjaro have already driven momentum, while the acquisition of Verve Therapeutics and SiteOne Therapeutics diversifies its pipeline into gene editing and pain management.

These developments align with the options market’s bullish tilt. The $5B Virginia facility announcement, in particular, signals a long-term commitment to domestic supply chains, which could attract capital inflows. However, the termination of the bimagrumab trial for Zepbound combination highlights the risks of overextending in its obesity portfolio. Traders should monitor whether the market discounts these risks or if the positive news flow dominates.

Actionable Trading Opportunities: Calls at $737.5 and Puts at $710 for Strategic Entries

For options traders, the most compelling setups are:

• Friday Expiration: Buy the $737.5 call (OI: 2,067) at $725.09. If LLY breaks above $732.59, this strike could see rapid extrinsic value decay, offering a leveraged play on the $745.48 target. Alternatively, the $710 put (OI: 791) provides downside protection if the stock dips to $719.43.
• Next Friday Expiration: The $755 call (OI: 724) and $720 put (OI: 717) offer extended exposure. A breakout above $732.59 could justify the $755 call, while the $720 put acts as a buffer against a potential 1.47% reversal.

For stock traders, consider:

• Entry near $730.99 (30D support) if the stock holds above $719.43. Target zones are $745.48 (Bollinger Middle Band) and $753.36 (200D resistance). A breakdown below $719.43 would invalidate the bullish case, with $710 as a hard stop.
• Short-term scalping: Buy on dips to $719.43 with tight stops above $717.13 (intraday low). The RSI at 44.53 suggests oversold conditions, but the MACD histogram (-2.92) warns of bearish momentum.

Volatility on the Horizon: Balancing Bullish Fundamentals and Technical Risks

LLY’s trajectory hinges on its ability to sustain momentum above $732.59. A close above $745.48 would validate the long-term bullish case, while a retest of $719.43 could trigger a short-term correction. The options market’s heavy call positioning at $737.5 and $750 suggests a 7-10% move is priced in, but traders must remain cautious of the 200D MA at $784.38 acting as a psychological ceiling.

With multiple catalysts—obesity drug approvals, manufacturing expansions, and gene therapy acquisitions—LLY is well-positioned for growth. However, the technical indicators (short-term bearish trend, bearish MACD) caution against complacency. Traders should balance bullish conviction with disciplined risk management, using the $710 put as a hedge or the $737.5 call as a leveraged bet. The coming weeks will test whether LLY can convert its fundamentals into sustained price action.