UNH Options Signal Aggressive Bullish Bets at $400 Strike – Here’s How to Play the Rebound or Hedge Downside Risk

• UnitedHealth Group (UNH) trades at $312.97, up 1.25% intraday, but sits below all major moving averages.
• Options market shows call dominance (put/call OI ratio: 0.47) with heavy open interest at $400 and $350 call strikes.
• RSI at 26.5 suggests oversold conditions, but bearish technicals (negative MACD, lower Bollinger Band proximity) warn of lingering risks.

Here’s the core insight: Options activity hints at a high-stakes bet on a sharp rebound, but technicals and price action suggest caution. Traders must balance the allure of a breakout with the risk of a prolonged consolidation. Let’s break it down.

OTM Call Dominance at $400 and $350 Suggests High Conviction in a Rally – But Puts at $300 Offer a Safety Net

The options chain tells a story of extremes. For Friday expiration, the $400 call (OI: 9,327) and $350 call (OI: 8,476) are the most watched. These strikes are far above the current price, implying some investors expect a dramatic move—maybe driven by earnings, regulatory news, or sector rotation. But here’s the catch: the $300 put (OI: 7,955) is the most liquid OTM put, suggesting others are hedging against a drop below key support levels.

This split signals polarized sentiment. Bulls are all-in on a breakout, while bears are quietly preparing for a pullback. The risk? If UNH fails to break above $322 (30D support/resistance) or dips below $310 (next Friday’s top put at $310), the rally could stall. No block trades complicate the picture, so retail and institutional bets are likely driving this setup.

No Major News to Lean On – But Options Sentiment Fills the Void

The lack of headline news means options data is the main narrative driver. Without earnings or guidance updates to anchor expectations, traders are reacting to technical levels and macro themes. For example, the healthcare sector’s resilience in a rising-rate environment could justify the bullish bets. But without a catalyst, the rally might lack legs.

Here’s the twist: investor perception matters. If the $400 call buyers are hedge funds or algo-driven funds, their activity could create a self-fulfilling prophecy. A sudden surge in call buying might push the price higher simply to balance the order flow. But if the move is retail-driven, it could fizzle quickly.

Actionable Trades: Call Plays for the Bold, Puts for the Pragmatic

For those willing to chase the bullish narrative, the $370 call expiring this Friday (OI: 7,216) is a high-conviction play. Why? It’s closer to the current price than the $400 strike, giving it more extrinsic value, and sits just above the 30D support level of $322. A break above $322 could trigger a short-term rally toward $340 (middle Bollinger Band at $336.11).

For downside protection, consider a bear put spread using the $310 put (OI: 2,934 for next Friday) and the $300 put (OI: 1,293). If UNH dips below $310, the $310 strike could cap losses while the $300 put amplifies gains if the drop accelerates.

Stock traders should look to enter near $310 (intraday low) if the price holds above the 200D support of $302.88. A successful rebound could push the stock toward $322–$324, where the 30D support/resistance zone lies. A breakdown below $310, however, would target the lower Bollinger Band at $300.25.

Volatility on the Horizon – Position for a Rebound or Hedge with Puts at Key Levels

The data paints a mixed picture. On one hand, the RSI’s oversold reading and Bollinger Band positioning hint at a potential bounce. On the other, the bearish MACD and long-term moving averages warn of a larger downtrend.

Traders must decide: Do they want to ride the short-term optimism (calls at $370–$400) or hedge against a deeper correction (puts at $310–$300)? The answer depends on risk tolerance and time horizon. For those with a medium-term view, the $370 call expiring next Friday offers more time for the trade to play out, while the $310 put provides a buffer if the market turns.

One final thought: this is a high-conviction setup. The options market isn’t whispering—it’s shouting. But shouting doesn’t always mean the message is right. Stay close to the price action, and be ready to adjust if the stock fails to hold key levels. After all, even the best-laid plans need a Plan B.