LLY’s Options Signal $1120 Bullish Pressure: Here’s How to Play the Medicare-Driven Rally

• Eli Lilly’s (LLY) stock trades at $1,027.46, up 0.21% with a short-term bullish trend and overbought RSI of 89.65.
• Options data shows heavy call open interest at $1,120 and $1,180 strikes (expiring Friday), while puts at $700 and $790 hint at deep downside protection bets.
• A Medicare deal with the Trump administration—expanding access to GLP-1 drugs and slashing prices—has analysts projecting $200 billion market share for LLY by 2031.

Here’s the core insight: LLY’s options market is pricing in a high-probability rally above $1,100 by Friday, driven by a perfect storm of regulatory tailwinds, commercial momentum, and bullish technicals. While the stock isn’t screaming for a short-term crash, the data suggests a clear path for upside—provided support holds. Let’s break it down.

Bullish Pressure at $1,120: Decoding the Options Imbalance

The options chain tells a story of asymmetric optimism. For Friday expiration, calls at $1,120 (OI: 5,382) and $1,180 (OI: 5,120) dominate, while puts at $700 (OI: 2,135) and $790 (OI: 2,045) are deep out-of-the-money. This isn’t just noise—it’s a signal. Big money is hedging a rally, not a crash.

The put/call ratio of 0.84 (calls outweighing puts) reinforces this. Think of it like a crowd at a concert: more people are buying tickets to the balcony (calls) than the exits (puts). But don’t ignore the risk: RSI at 89.65 suggests overbought conditions, and a close below $1,000 (intraday low) could trigger short-term profit-taking.

Block trading? None reported. So no institutional whales are moving the needle here—just retail and institutional bulls stacking up for a Medicare-driven pop.

Medicare Deal: The Catalyst That Aligns With Options Sentiment

The Trump administration’s pricing deal isn’t just a headline—it’s a revenue multiplier. By slashing Zepbound and Wegovy to $50/month for Medicare, LLY is expanding access to 68 million beneficiaries. Analysts at Leerink Partners call this "pro-consumer pricing without sacrificing margins," and it’s already boosting Zepbound sales to $24.8 billion year-to-date.

Here’s the kicker: investor perception is amplifying the news. The market sees this as a win-win—lower prices attract more patients, which boosts volume, while Lilly’s most-favored nation status locks in pricing power. Combine that with leadership changes (new execs in neuroscience and immunology) and a $475M gene therapy deal, and you’ve got a stock that’s not just reacting to news—it’s being repositioned for long-term dominance.

Actionable Trade Ideas: Calls, Puts, and Price Levels to Watch

For options traders, the $1,120 call (expiring Friday) is the most liquid and strategically positioned. If LLY breaks above $1,032.14 (intraday high), this strike could see explosive gamma. For a longer-term play, the $1,200 call (next Friday) offers leverage if the stock holds above $1,000.

Stock traders: Consider entry near $1,025 (just below today’s open) with a target at $1,050 (upper Bollinger Band). A stop-loss below $1,000 would protect against a breakdown. If the stock pulls back to the 30D support zone ($817.63–$822.14), a bullish put spread (e.g., $825 puts) could hedge downside while capitalizing on a rebound.

Volatility on the Horizon: Positioning for LLY’s Next Move

The setup is clear: LLY is in a short-term bullish trend, with options and news both pointing higher. But don’t ignore the technical risks. RSI near 90 often precedes corrections, and volume at 2.3 million suggests retail participation—always a double-edged sword.

Here’s the takeaway: Position for a $1,100+ move by Friday, but keep a tight stop below $1,000. The Medicare deal gives LLY a tailwind, but the stock isn’t immune to overbought conditions. If you’re bullish, the $1,120 call is your best bet. If you’re cautious, a $825 put offers downside insurance. Either way, this is a stock where the options market and fundamentals are singing from the same hymnbook.