UNH Options Signal Bullish Bias Amid Earnings Volatility: Key Strikes to Watch for Breakouts

• UnitedHealth Group (UNH) shares fell 4.4% after a Q3 earnings beat, but call open interest at $420 suggests bullish bets.
• Options data shows a 0.495 put/call OI ratio, favoring calls, with heavy positioning at $420 (calls) and $330 (puts).
• Technical indicators hint at short-term bearish momentum, but long-term support at $344.66 could spark a rebound.

Here’s the thing: UNH’s options market is screaming direction. Call open interest at $420 (11,178 contracts) dwarfs put activity at $330 (7,120 contracts), and the 0.495 put/call ratio tells us traders are leaning bullish. But the stock’s 4.4% drop post-earnings and a bearish RSI of 41.2 mean we need to tread carefully. This isn’t just noise—it’s a setup. Let’s break it down.

The Options Imbalance: Bullish Bets vs. Downside Insurance

The options chain is a goldmine of sentiment. For Friday’s expirations, calls at $420 ($400, $390) dominate, while puts at $330 ($325, $315) act as a safety net. Think of it like this: bulls are betting on a $420+ rebound, while bears are hedging at $330. The key? Volume. That $420 call OI is 11,178 contracts—over 60% more than the next strike. That’s not random; it’s a vote of confidence in a breakout.

But don’t ignore the puts. $330 puts have 7,120 OI, which means some traders expect a test of the 30D support at $344.66. If the stock dips below $337.12 (today’s low), those puts could ignite a short-term rally. The danger? If $330 breaks, the 200D support at $302.88 looms. This isn’t a one-way bet—it’s a tightrope walk between optimism and caution.

Earnings, Margins, and the Valuation Debate

UNH’s Q3 report was a mixed bag. Earnings of $2.59/share beat estimates, and revenue hit $113.2B (up 12% YoY). But analysts are split: Morgan Stanley praises disciplined repricing, while others downgrade the stock, citing overvaluation. Here’s the kicker—net margins rose to 4%, and the 2025 guidance hike to $14.90/share should buoy long-term bulls. Yet, the Medicare repricing shift? That’s a wildcard. If premiums keep shrinking, even strong margins might not offset revenue pressure.

Institutional investors are buying, though. The top 0.1% have boosted UNH holdings, betting on its healthcare dominance. But retail traders? They’re skittish. The 4.4% post-earnings drop shows the market isn’t fully convinced. This tug-of-war between fundamentals and sentiment is why options activity matters—it’s the canary in the coal mine.

Actionable Trades: Calls, Puts, and Price Levels

Let’s get practical. For options, the $390 call (next Friday’s expiration) is a sweet spot. Why? It’s 4.4% out of the money but sits just above the 30D support ($344.66–$345.33). If the stock rebounds from here, this strike could see explosive volume. Entry: $390 call at $1.50–$2.00. Target: $400+ for a 50%+ gain.

For downside protection, the $330 put (Friday’s expiration) is your best bet. It’s 5.6% OTM but aligns with the 30D support. If UNH dips below $337.12, this put could rally. Entry: $330 put at $2.00–$2.50. Stop-loss: $325 if the stock breaks below $330.

Stock traders: Consider entry near $344.66 (30D support) if the price holds. Target zones are $360 (middle Bollinger Band) and $372.27 (upper band). A break below $337.12 invalidates the setup—exit or hedge with a $330 put.

Volatility on the Horizon

The next 72 hours will be critical. If UNH holds $344.66 and rallies toward $360, the $420 call OI could trigger a short-term parabolic move. But if the stock tests $330, the 200D support at $302.88 becomes a hard stop. This isn’t a binary bet—it’s a dance between earnings optimism and valuation skepticism. The options market is already pricing in both outcomes. Your job? Pick your side and manage risk. After all, in trading, it’s not about being right—it’s about being ready.