UNH Options Signal High Conviction Bullish Play: Target $400 Calls as Earnings Loom

• UNH plunges 2.01% to $333.65, breaking below its 30D moving average of $333.31.
• Options market shows 0.545 put/call open interest ratio, with $400 calls (OI: 30,097) as the most watched strike this Friday.
• Earnings on Jan 27 could clarify whether UNH’s 90% Medical Care Ratio stabilizes or triggers further sell-offs.

Here’s the thing: UNH’s options market isn’t just reacting to today’s price drop—it’s betting on a sharp rebound. The $400 call wall (UNH20260116C400) and $900 call frenzy (UNH20260116C900) scream that big money expects a post-earnings pop… or a pre-earnings short-covering rally. But the $200 put pile (UNH20260116P200) adds a twist—some are hedging for a deeper selloff. Let’s break it down.

Bullish Bets vs. Bearish Safeguards: What the Options Say

The options chain is a chessboard of expectations. For this Friday’s expiry (Jan 16), the $400 call (OI: 30,097) is the most watched strike. That’s not just noise—it’s a price level where traders are staking their belief that UNH will claw back above its 200D MA of $343.48 before earnings. The $900 call (OI: 25,311) is a longshot, but its size hints at speculative frenzy. Meanwhile, the $200 put (OI: 20,294) acts as a floor—some are betting UNH could drop 37% to $200 if regulatory risks blow up.

But here’s the catch: the next Friday expiry (Jan 23) shows a shift. The $350 call (UNH20260123C350) and $320 put (UNH20260123P320) dominate, suggesting a narrower trading range after earnings. If UNH misses guidance, the $320 put could become a lifeline. No major block trades today, so no whale moves to flag—yet.

News Flow: Regulatory Headaches vs. Analyst Optimism

UnitedHealth’s Q4 preview was a mixed bag. The company reaffirmed its $16.25 EPS target but admitted to a "recalibration year" due to 90% MCR costs. The Senate report on risk-adjustment coding adds regulatory drama, but Bernstein’s $444 price target (up from $430 pre-earnings) shows analysts aren’t panicking. The key question: Will the January 27 earnings report stabilize the MCR or confirm it’s a drag?

Retail investors are split. The 2.6% dividend and $385.75 average target price suggest long-term confidence, but the 109 Medicare Advantage exits and GLP-1 drug costs could keep volatility high. If the market prices in a 10% medical cost trend for 2026, UNH’s shares might rebound—especially if Optum’s margin expansion offsets insurance arm pressures.

Actionable Trade Ideas: Calls for the Bold, Puts for the Pragmatic

For options traders:

• Bullish Play: Buy UNH20260116C400 calls. If UNH closes above $343.48 (its 200D MA) by Friday, these could surge. Target a 50%+ gain if the stock hits $380.
• Bearish Hedge: Buy UNH20260116P200 puts. This is a deep out-of-the-money bet, but if the Senate report triggers a panic, these could pay off.
• Next-Week Setup: For a safer play, consider UNH20260123C350 calls. If earnings beat expectations, these could capitalize on a post-report rally.

For stock traders:

• Entry Near Support: If UNH holds above $323.21 (30D support), consider buying dips. Target a rebound to $343.48 (200D MA) or $350 (Bollinger Upper Band).
• Stop-Loss Alert: Below $320.21 (lower Bollinger Band), the stock could spiral into a bearish phase.

Volatility on the Horizon

The next two weeks will test UNH’s resilience. Earnings could either validate its $444 price targets or expose cracks in its MCR strategy. The options market is pricing in a 30% chance of a $400+ pop (via those $400 calls) and a 20% chance of a $200 crash (via the put wall). For now, the stock is stuck between its 30D support and 200D resistance—a tightrope walk that could end in a breakout… or a breakdown.

Bottom line: This is a high-conviction trade. If you’re bullish on UnitedHealth’s long-term margins and regulatory resilience, the $400 calls are your play. If you’re hedging for a worst-case scenario, the $200 puts are your insurance. But either way, keep an eye on Jan 27. That’s when the real story unfolds.