Gilead Sciences Plummets 3.3% Amid Biotech Sector Turmoil: What’s Fueling the Selloff?

Summary
• Gilead Sciences (GILD) trades at $120.24, down 3.3% from its previous close of $124.35
• Sector leader Amgen (AMGN) declines 3.76%, amplifying biotech sector jitters
• Options chain shows heightened volatility, with GILD20260116C115 and GILD20260116P115 attracting heavy turnover

Gilead Sciences is under intense pressure as the biotech sector grapples with a broad selloff. With the stock trading near its 52-week low of $89.02, the decline raises questions about catalysts. While no direct company-specific news triggered the move, sector-wide regulatory scrutiny and macroeconomic headwinds are amplifying the sell-off. The stock’s intraday range of $119.94–$125.11 highlights the volatility, with technical indicators and options activity pointing to a critical juncture.

Biotech Sector Volatility Drives Gilead’s Sharp Decline
The selloff in Gilead Sciences is part of a broader biotech sector correction, driven by regulatory uncertainty and macroeconomic pressures. While the company has no recent earnings or product news, the sector’s reaction to Amgen’s 3.76% decline and broader market jitters over interest rates has spilled over. The lack of positive catalysts in GILD’s fundamentals—such as its dynamic P/E of 17.68—combined with sector-wide profit-taking, has intensified the downward spiral. Options data further underscores the bearish sentiment, with put options on $115 and $110 strikes seeing sharp volume spikes.

Biotech Sector Under Pressure as AMGN Leads the Slide
The biotech sector is in freefall, with Amgen (AMGN) leading the charge lower. Gilead’s 3.3% drop mirrors the sector’s broader weakness, though its 52-week low proximity adds urgency. While AMGN’s decline is tied to its own pipeline risks, the synchronized sell-off suggests systemic factors—such as rising borrowing costs for R&D-heavy firms—are amplifying the move. GILD’s lower leverage ratio compared to AMGN (17.68 vs. AMGN’s higher P/E) may make it more vulnerable to margin compression in a high-rate environment.

Options Playbook: Capitalizing on Gilead’s Volatility with Strategic Put/Call Pairs
• 200-day MA: $113.98 (below current price), RSI: 63.27 (neutral), MACD: -0.093 (bearish divergence)
• Bollinger Bands: Price near lower band ($117.80), signaling oversold conditions

Gilead’s technicals suggest a short-term bounce from oversold levels but a bearish medium-term outlook. The 200-day MA at $113.98 is a critical support level to watch. Options traders should focus on high-leverage, high-IV contracts with strong gamma and theta characteristics. Two top picks from the chain are:

• GILD20260116C115 (Call, $115 strike, 1/16/2026):
- IV: 32.46% (moderate)
- LVR: 19.42% (high)
- Delta: 0.8329 (high)
- Theta: -0.2393 (high decay)
- Gamma: 0.0406 (high sensitivity)
- Turnover: 134,506 (liquid)
- Payoff at 5% downside ($114.23): $0.23 per contract. This call offers aggressive upside if the stock rebounds above $115, leveraging high gamma to capitalize on price swings.

• GILD20260116P115 (Put, $115 strike, 1/16/2026):
- IV: 30.79% (moderate)
- LVR: 251.27% (extreme)
- Delta: -0.1544 (moderate)
- Theta: -0.0409 (low decay)
- Gamma: 0.0407 (high sensitivity)
- Turnover: 539 (liquid)
- Payoff at 5% downside ($114.23): $0.77 per contract. This put offers outsized leverage for a bearish move, with high LVR amplifying returns if the stock breaks below $115.

Trading Insight: Aggressive bulls should consider GILD20260116C115 into a bounce above $115, while bears may target GILD20260116P115 if support at $113.98 fails. The key is to act swiftly as the 200-day MA and Bollinger Bands converge.

Backtest Gilead Sciences Stock Performance
The backtest of GILD's performance after a -3% intraday plunge from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 48.43%, the 10-Day win rate is 54.93%, and the 30-Day win rate is 58.49%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 4.42%, which occurred on day 59, suggesting that while gains were possible, they were not consistently high.

Act Now: Gilead’s Volatility Presents High-Reward Opportunities
Gilead Sciences’ 3.3% drop is a high-conviction setup for both bulls and bears, with technicals and options data aligning on a pivotal juncture. The stock’s proximity to its 52-week low and the sector’s regulatory headwinds suggest further volatility. Traders should prioritize GILD20260116C115 for a rebound above $115 or GILD20260116P115 if the breakdown below $113.98 accelerates. Watch Amgen’s 3.76% decline as a sector barometer—any reversal in AMGN could signal a broader biotech rebound. Action now: Position for a directional move or volatility trade before the 1/16 expiration.