LLY Options Signal Bullish Momentum: Calls at $1100 Dominate as Puts at $1000 Hedge Volatility

• LLY’s price dropped 0.46% to $1066.52, trading below its 30-day moving average of $1032.30 but above key support at $1054.27.
• Options data shows heavy call open interest at $1100 and $1110 (expiring this Friday), while puts at $1000 and $980 dominate bearish positioning.
• FDA approvals and $3.5B Alzheimer’s collaboration position LLY for 2026 growth, but short-term volatility remains elevated.

Here’s the takeaway: LLY’s options market is pricing in a bullish bias with downside hedges, suggesting traders expect a rebound off current support levels while hedging against a potential pullback. The stock’s technicals and fundamentals align for a breakout scenario—if it holds above $1054.

Options Imbalance Points to Bullish Bias with Caution at $1000 Support

LLY’s options chain tells a story of cautious optimism. This Friday’s expiring calls show 2,756 contracts at $1100 and 1,122 at $1110, reflecting bets on a rebound to test Bollinger Upper Band resistance at $1114.37. Meanwhile, puts at $1000 (1,013 OI) and $980 (572 OI) indicate hedging activity, with the put/call ratio at 0.917 (calls slightly dominant).

The MACD histogram (-2.25) hints at waning bullish momentum, but the RSI at 53.3 suggests oversold conditions. Key risk: If LLY breaks below $1054.27 support, the 200-day MA at $818.02 could accelerate the slide. No block trades complicate the picture, so focus stays on retail and institutional options positioning.

Fundamental Catalysts Fueling Long-Term Optimism

LLY’s recent news is a triple threat: Q3 revenue up 12%, FDA approval for Lirazep (projected $2.1B/year by 2026), and a $3.5B Alzheimer’s partnership. These events validate Lilly’s R&D pipeline and market expansion. However, the 8% drop on Dec 18 (linked to broader market jitters) shows macro risks still linger.

Investor sentiment is split: bulls see the FDA approvals as a catalyst for a $1100+ move, while bears worry about profit-taking in a high-P/E sector. The $500M R&D investment and new CFO appointment add credibility to Lilly’s long-term growth story, but short-term traders need to watch the $1054 support level.

Strategic Entry Points: Calls at $1100 and Puts at $1000 for Divergent Scenarios

For options traders, consider these setups:

• Bullish play: Buy LLY20251226C1100 (this Friday’s $1100 call) if LLY rebounds above $1070. Target: $1114 (Bollinger Upper Band). Stop-loss: below $1063 intraday low.
• Bearish hedge: Buy LLY20251226P1000 to protect against a drop below $1054. Target: $980 (next support). Stop-loss: above $1063.

For stock traders, consider:

• Entry near $1054–$1058 if LLY holds above 30-day MA ($1032.30). Target: $1083 (intraday high) or $1114.37 (Bollinger Band).
• Stop-loss at $1043.95 (middle Bollinger Band) to limit downside risk.

Volatility on the Horizon: Positioning for LLY’s 2026 Launch

LLY’s options and fundamentals point to a mid-term bullish setup, with the FDA-approved Alzheimer’s drug and diabetes treatments driving 2026 revenue. However, near-term volatility—driven by macroeconomic fears and sector rotation—means traders should balance aggression with caution.

The key takeaway: LLY is a stock with strong fundamentals but short-term technical fragility. If you’re bullish, use the $1054 support as a buying opportunity. If you’re bearish, the $1000 put is a solid hedge. Either way, the options market is pricing in a decisive move—up or down—before year-end.