LLY Options Signal Bullish Bet on $1,100 Resistance Amid Trump Drug Deal Volatility

• LLY’s price dropped 3.3% to $906.30 amid Trump’s 74% obesity drug price cuts, but call options at $1,100 (next Friday) show heavy open interest.
• Options data reveals a 0.78 put/call ratio (calls dominate), with top OTM calls clustered above $950 and puts below $870.
• News of tariff relief and GLP-1 sales growth offsets margin concerns, but short-term volatility remains high.

Here’s the thing: LLY’s options market is screaming bullish—but not without risk. The stock’s 3.3% drop today masks a deeper story: traders are piling into calls at $965 and $1,100, while puts at $865 and $895 hint at cautious downside hedging. Combine this with Trump’s drug pricing deal and Lilly’s GLP-1 dominance, and you’ve got a stock teetering between short-term pain and long-term promise. Let’s break it down.

Bullish Bets and Bearish Safeguards: Decoding the Options Imbalance

The options chain tells a clear story. For Friday’s expirations, $965 calls (OI: 5,035) and $1,000 calls (OI: 2,582) dominate, while next Friday’s $1,100 calls (OI: 10,053) are the most crowded. That’s not just noise—it’s a vote of confidence in LLY’s ability to rebound above $950. Meanwhile, puts at $865 (OI: 1,980) and $867.50 (OI: 1,847) suggest traders are bracing for a potential drop to the 818–822 support zone.

The 0.78 put/call ratio (calls outweigh puts) reinforces this: the market expects a rebound, but not without a fight. Think of it like a tug-of-war—bulls are pulling hard toward $1,100, but bears have dug in below $870. The danger? If LLY breaks below $865, the puts could trigger a cascade of selling.

News vs. Options: Tariff Relief or Margin Squeeze?

Trump’s drug pricing deal is the elephant in the room. On paper, 74% price cuts for Mounjaro and Zepbound should hurt margins. But here’s the twist: Lilly gets tariff exemptions, and its GLP-1 sales hit $1.2B last quarter. Analysts at RBC Capital argue this isn’t a death knell—it’s a reset.

The options market seems to agree. Heavy call buying at $965 and $1,100 implies traders believe Lilly’s R&D pipeline and first-mover advantage in GLP-1s will offset margin pressure. The news also explains why puts at $865 are popular—investors are hedging against a short-term selloff as the market digests the deal’s impact.

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

If you’re bullish but cautious, here’s how to play it:

• Option Play 1: Buy LLY $965 calls (Friday expiration). With the stock trading at $906, this is a high-risk, high-reward bet. If LLY rebounds to $950 by Friday, these calls could double.
• Option Play 2: Buy LLY $1,100 calls (next Friday). This is the big one. The $1,100 strike has 10,053 open interest—traders are pricing in a post-earnings pop or a rebound from support.
• Stock Play: Consider entry near $822 (30D support) if LLY holds above $818. Target zones: $931 (intraday high) or $965 (key resistance).
• Bearish Hedge: Buy LLY $865 puts (Friday). If the stock breaks below $865, these could pay off as volatility spikes.

Volatility on the Horizon: Bulls and Bears Collide

LLY’s future hinges on two forces: its ability to maintain GLP-1 sales growth and the market’s reaction to Trump’s pricing deal. The options data suggests a “wait and see” approach—calls at $1,100 imply long-term confidence, while puts at $865 signal short-term caution.

Here’s the takeaway: LLY isn’t a straight-up buy or sell. It’s a stock in transition. If you’re in, use the $822 support as your floor and $965 as your ceiling. If you’re out, the $865–$895 range could offer a second chance to re-enter. Either way, keep an eye on the $1,100 strike—it’s where the big money is moving.