LLY Options Signal $1,000 Call Wall as Bulls Target $1,200—Here’s How to Play the Rebound

• Eli Lilly (LLY) plunges 1.4% to $996, breaking below key support at $1,021 after a volatile session.
• Call open interest spikes at $1,000 and $1,200 strikes for Dec 19, while puts pile up at $800 and $650.
• Mounjaro’s inclusion in China’s insurance list and a $1 trillion market cap milestone hint at long-term optimism.

The stock’s short-term pain meets long-term promise. Options traders are betting on a rebound above $1,000, but the intraday drop raises questions about whether this is a buying opportunity or a warning sign. Let’s break it down.The Call-Put Imbalance: A Bullish Wall at $1,000

LLY’s options chain tells a story of divided sentiment. For the Dec 19 expiration, the LLY20251219C1000 call has 6,409 open contracts—nearly double the next highest strike. That’s a wall of liquidity for bulls eyeing a rebound. Meanwhile, the LLY20251219P800 put (1,350 OI) and LLY20251219P650 put (1,308 OI) suggest deep bearish positioning. The put/call ratio of 0.87 (favoring calls) reinforces the idea that options buyers are leaning on the stock’s long-term potential, even as it stumbles today. But here’s the catch: if LLY fails to hold above $990, those $1,000 calls could turn into a trap. The RSI at 46.3 and MACD histogram turning negative signal fading momentum—so don’t assume the rebound is guaranteed.

News That Could Tip the Scales

Eli Lilly’s recent headlines are a mixed bag. Mounjaro’s addition to China’s insurance list is a win for accessibility, but the price cuts that often follow could temper revenue growth. The $1 trillion market cap milestone, meanwhile, highlights the dominance of GLP-1 drugs like Mounjaro and Zepbound, which account for half of the company’s revenue. Yet, the stock’s absence from the Dow hints at lingering skepticism about its valuation. Carolyn Bertozzi’s return to the board adds credibility to Lilly’s R&D pipeline, especially in oncology—a sector where investor appetite is strong. The key question: Will the market prioritize short-term profit-taking (driving the current sell-off) or long-term innovation (fueling the call buying)?

Trade Ideas: Calls for the Bold, Puts for the Cautious

If you’re bullish on LLY’s long-term story but wary of near-term volatility, consider a bull call spread using the LLY20251219C1000 and LLY20251219C1100 strikes. Buy the $1,000 call and sell the $1,100 call to reduce cost. This setup profits if LLY rebounds to $1,050 by Dec 19. For a more aggressive play, buy the LLY20251219C1200 call if the stock breaks above $1,020—though this requires a strong rebound. On the stock side, look to enter near $990 if support holds, with a target at $1,020 (30D support level) and a stop below $970. If the sell-off accelerates, the LLY20251219P950 put (464 OI this week) could offer downside protection, but the low put/call ratio suggests limited demand for insurance.

Volatility on the Horizon

LLY’s technicals and options activity paint a picture of a stock at a crossroads. The long-term bullish trend (200D MA at $812) and Bollinger Bands suggest the stock could test $1,120 if the rebound holds. But today’s breakdown below $1,021 support raises the risk of a test of the $947 lower band. Traders need to watch the $990 level like a hawk—break below that, and the $950 put wall could dominate the narrative. For now, the call-heavy options activity implies a bias toward a rebound, but don’t ignore the short-term bearish signals. This is a stock where patience and precise execution could pay off big—if you’re on the right side of the trade.