Merck (MRK) Options Signal Bullish Setup at $113 as Analysts Hike Targets—Here’s How to Play It

• Merck (MRK) trades at $107.73, down 1.33% from its 52-week high of $112.35, but options data shows heavy call buying at the $113 strike.
• The put/call ratio for open interest is 0.57, favoring calls, with next Friday’s $113C (MRK20260130C113) holding 27,696 contracts—the largest OI in the chain.
• Institutional investors like Strs Ohio just boosted their MRK stake by 11.3%, while analysts raised price targets to $120–$130, creating a clear bull case.

Here’s the takeaway: Merck’s options market is quietly building a bullish case for a $113 breakout, backed by analyst upgrades and a strategic mRNA-driven growth story. But short-term volatility from the 30-day support zone at $110.82 could test near-term resolve.

What the Options Chain Reveals About Market Sentiment

The next Friday options chain tells a story of cautious optimism. The $113 call (MRK20260130C113) dominates with 27,696 open contracts—nearly 3x the next highest strike. This suggests institutional players are hedging for a mid-February rally, possibly tied to Merck’s mRNA cancer vaccine data or the Revolution Medicines acquisition.

But don’t ignore the puts: the $105P (MRK20260130P105) has 539 open contracts, hinting at a floor around $105. That’s just 2.5% below today’s price, so a sharp drop would need a catalyst like a dividend cut or patent expiration scare.

The block trade on the $108P (MRK20260123P108) with 1,481 contracts is also telling. Whoever placed it might be hedging a large stock position ahead of this Friday’s expiry. But with calls dominating the OI, the market’s net bias remains firmly bullish.

Why Analyst Upgrades and Institutional Buying Matter Now

Merck’s recent news isn’t just noise—it’s fuel for the options-driven bull case. Analysts raised price targets to $120–$130 after the company:

• Released 5-year melanoma trial data showing improved outcomes with Keytruda + mRNA vaccines
• Entered advanced talks to acquire Revolution Medicines, bolstering its oncology pipeline
• Raised its dividend to $3.40 annually (3.1% yield), attracting income-focused investors

Strs Ohio’s 11.3% stake increase in Q3 shows big money isn’t betting on a short-term dip—they’re positioning for long-term growth. Combine that with Goldman Sachs and UBS hiking targets, and you’ve got a perfect storm for a $113+ move.

Actionable Trade Ideas for MRK Today

For options traders: Buy the MRK20260130C113 call at $113. This strike sits just 5% above today’s price but aligns with the 30-day resistance zone (110.82–111.11). If Merck closes above $111.11 by next Friday, this call could see 20%+ gains.

For stock investors: Consider entry near $107.21 (intraday low) if the price holds above the 200-day MA at $86.98. A breakout above $111.11 resistance would target $113 (next Friday’s key call strike) and eventually the analyst consensus target of $114.20.

A safer play? Buy the MRK20260130P105 put to hedge a long stock position. It caps downside risk at $105 while letting you ride the $113 call’s upside.

Volatility on the Horizon: What to Watch

Merck’s options market is pricing in a 10–12% move by next Friday, driven by the $113 call’s heavy OI and institutional activity. The real question is whether the mRNA data or acquisition news will be the catalyst.

If the stock holds above $107.21 (Bollinger Band support) and closes above $110.82 (30-day support), the $113 call becomes a high-conviction trade. But if it dips below $105, the puts could see action.

Bottom line: This is a setup for a directional bet on Merck’s long-term story, with options offering leverage to capitalize on near-term volatility. The key is to align your strategy with the $113 strike—the market’s quiet consensus on where Merck’s next chapter begins.