LLY's Call-Heavy Options Setup Suggests $1,100+ Upside—Here's How to Play It

• LLY trades at $1,072.97, down 0.37% from its 52-week high of $1,081.39
• Options data shows 2,282 open contracts at the $1,100 call strike—nearly triple the next level
• Technical indicators confirm a bullish bias with RSI at 67.6 and 200D MA at $821.52

Here’s the bottom line: LLY’s options market is pricing in a strong upside bias, with call open interest concentrated above $1,100. While the stock faces near-term consolidation, the fundamentals and options positioning suggest a breakout above $1,080 could reignite the bullish trend.

Bullish Sentiment Locked in Call Options

The options chain tells a clear story. For this Friday’s expiration, the $1,100 call (LLY20251226C1100) dominates with 2,282 open contracts—over 3x the $1,110 strike. This suggests institutional players are hedging against a potential post-earnings pop or pre-bidding for a Medicare expansion-driven rally. Meanwhile, put open interest peaks at the $970 strike, but with only 697 contracts, it’s a faint bearish signal.

The put/call ratio for open interest (0.94) leans slightly bullish. No block trades complicate the picture, so we’re looking at organic positioning. The key risk? If LLY fails to hold above $1,068 (intraday low), the $1,010 support level could become a battleground.

News Flow: Price Cuts vs. Market Expansion

Eli Lilly’s recent price reductions for GLP-1 drugs initially seemed bearish, but the broader narrative is more nuanced. The Medicare expansion (effective mid-2026) and orforglipron’s potential launch by March 2026 create a clear growth path. The Zepbound vs. Wegovy study also strengthens Lilly’s competitive edge.

Investor perception is split: short-term margin concerns vs. long-term market dominance. The Q3 results—$7.02 EPS vs. $6.42 expected—show earnings resilience. With analysts averaging a $1,155 price target, the stock’s fundamentals still justify the bullish options positioning.

Actionable Trade Ideas for LLY

For options traders, the most compelling setup is a call debit spread using the $1,100 and $1,120 strikes. Buy LLY20260102C1100 (next Friday’s $1,100 call) and sell LLY20260102C1120 to cap risk while leveraging the heavy open interest. This costs ~$25/share and targets a 15%+ return if LLY closes above $1,115 by Jan 2.

Stock traders should consider entries near $1,070 (30D support) with a tight stop below $1,060. A breakout above $1,080 (Bollinger Middle Band) would validate the bullish case, with initial targets at $1,100 and then $1,120. For a safer play, buy the $1,015 put (LLY20260102P1015) to hedge against a potential pullback.

Volatility on the Horizon

The next 72 hours will test LLY’s resolve. A close above $1,080 could trigger a short-covering rally, while a drop below $1,060 might force options sellers to buy the stock to cover. Either way, the fundamentals—Medicare expansion, orforglipron’s timeline, and Zepbound’s efficacy—remain intact. This is a stock where the long-term story (2026-2030) is stronger than near-term volatility. Stay nimble, but don’t lose sight of the $1,155 price target analysts are betting on.