UNH Options Signal Bullish Breakout Potential at $350 Strike—Here’s How to Play the Volatility

• UnitedHealth Group (UNH) trades at $337.43, up 1.05% with volume surging past 2.36 million shares.
• Options data shows heavy call open interest at the $350 strike (next Friday) and puts at $320, signaling a tug-of-war between bulls and bears.
• Regulatory risks clash with rural hospital payment reforms, creating a mixed but actionable setup for traders.

The stock’s 1.05% intraday gain masks a deeper story: options market participants are pricing in a potential breakout above $340 while hedging against a drop below $320. With the put/call ratio at 0.55 (calls dominate), the data leans cautiously bullish—but not without risks. Let’s break down what the numbers and news mean for your strategy.

Bullish Calls at $350 vs. Defensive Puts at $320: A Battle for UNH’s Direction

The options chain tells a tale of two camps. For next Friday’s expiration, the UNH20260123C350 call has 2,340 open contracts—the highest among OTM strikes. This suggests traders are betting on a sharp move above $340, possibly driven by positive earnings or news catalysts. Meanwhile, the UNH20260123P320 put (2,013 OI) acts as a floor, with investors hedging against a drop below the 30D support zone of $323.21.

The imbalance? Calls dominate the open interest (981k vs. 540k puts), but the long-term bearish Kline pattern and 200D MA at $342.57 mean a sustained break above $340 could trigger a re-rating. However, the Senate report on Medicare tactics adds a wildcard—any regulatory escalation could see the UNH20260123P320 put rally in value.

News Flow: Rural Hospital Aid vs. Regulatory Scrutiny

UnitedHealthcare’s pilot to accelerate Medicare payments is a lifeline for rural hospitals—and a PR win for the company. But the Senate’s allegations of aggressive Medicare billing practices (and the new nursing home probe) create a shadow. Traders are pricing in a “wait-and-see” narrative: the stock’s 8% EPS growth guidance for 2026 is promising, but near-term volatility is baked in.

Here’s the twist: the market may be discounting the worst-case regulatory outcomes already. The stock’s 38% 12-month decline has created a value play for long-term buyers, but short-term traders need to navigate the noise.

Actionable Trades: Calls for Breakouts, Puts for Protection

For options traders, the UNH20260123C350 call is a high-conviction play if UNH closes above $340 by Friday. Entry near $337.43 with a stop below $334.32 (intraday low) could capture a 3.7% move. For downside protection, the UNH20260123P320 put offers a hedge if the stock dips below its 30D support.

Stock traders: Consider a buy near $323.21 (support) with a target at $340.11 (intraday high). If the stock breaks below $320, short near $302.88 (200D support) with a tight stop at $310.11.

Volatility on the Horizon: Balancing Optimism and Caution

UNH’s story is a classic tug-of-war between operational resilience and regulatory headwinds. The options data and technicals suggest a path of least resistance above $340, but the Senate report and nursing home probe mean risks are skewed to the downside. For now, the market is pricing in a “storm before the calm”—with Q4 earnings and policy updates in February likely to decide the next chapter.

Bottom line: This is a stock with a strong long-term case but a bumpy near-term ride. Play it smart—use options to leverage directional bets, and keep stops tight. The $350 call and $320 put are your best tools to navigate the noise.