$UNH Options Intelligence

## Trade Recommendation for UnitedHealth Group (UNH)

Given the current market conditions and the upcoming earnings report on October 28, 2025, I recommend a Bull Call Spread for UnitedHealth Group (UNH). This strategy is chosen because the stock has shown resilience in recent days, and there is a bullish sentiment indicated by the heavy call buying (Put/Call Volume Ratio: 0.19) and the stock's position above its 20-day moving average.

### Trade Details

• Stock Price: $361.27
• Strategy: Bull Call Spread
• Entry: Buy the November 7, 2025, $360 call and sell the November 7, 2025, $370 call.
• Entry Price: Estimate a debit of approximately $4.50 to $5.00 based on current market conditions.
• Risk: The maximum risk is the debit paid for the spread.
• Reward: The maximum reward is the difference between the strikes minus the debit paid ($10 - $4.50 = $5.50).
• Breakeven: $364.50 (long strike + debit).
• Max Profit: $5.50 if UNH closes above $370 at expiration.
• Max Loss: $4.50 to $5.00 if UNH closes below $360 at expiration.

### Term Structure & Volatility Analysis

• Baseline 90-day Historical Vol: 42.8%
• Clean IV for November 7 Expiration: 43.5% (fair value)
• Market IV for November 7 Expiration: 51.7% (slightly overpriced but fair for a bull call spread)
• Earnings Multiplier: Moderate, but the focus is on capturing potential upside rather than pure volatility.
• Calendar Opportunity: Not applicable for this strategy, as we are focusing on a single expiration date.

### Why This Trade

The term structure analysis indicates that the Clean IV for the November 7 expiration is relatively fair, making it a good time to execute a directional trade. The stock's recent performance and the upcoming earnings report create a bullish narrative, especially if UnitedHealth can demonstrate improved cost control and meet earnings expectations. The RSI at 58.74 is neutral, and the stock is above its 20-day MA, suggesting potential for further upside. The heavy call buying and low put-call ratio support a bullish strategy.

### Pro Analysis

• Current IV: 54.4% vs Historical: 10.4% (high IV rank, but we're focusing on a directional play rather than pure volatility)
• IV Rank: 100% (high, but we're buying premium)
• Expected Daily Move: ±12.37 (3.42%)
• Put/Call Ratio: 0.19 (very bullish)
• Market Maker Max Pain: Not directly relevant for this strategy

### Pricing Validation

• Put-Call Parity Check: Not directly applicable for this call spread, but ensure that the spread pricing respects the intrinsic value and put-call parity principles.
• Spread Pricing Verified: The estimated debit for the spread should be verified against actual market prices to ensure it aligns with the expected risk-reward profile.

### Confidence Level and Risk Assessment

• Confidence Level: 60% (based on the bullish sentiment and the potential for a positive earnings report)
• Risk Assessment: Moderate. The risk is limited to the debit paid for the spread, and the potential reward is capped at the difference between the strike prices minus the debit.

### Market Overview

The current market regime is influenced by expectations of a potential Fed rate cut and ongoing geopolitical factors. However, the focus on earnings and the company's ability to manage costs will be key drivers for UNH's stock price. The healthcare sector has shown resilience, and UNH's recent stock performance reflects investor optimism about its turnaround strategy.

### Trade Management

• Entry: Place a limit order at the estimated debit.
• Target: Close the spread at a profit of $2.75 to $3.25.
• Stop: Consider exiting if UNH breaks below $355.
• Time Stop: Close the position 2 days before expiration if not already exited.

This strategy is designed to capture potential upside while managing risk, given the current market conditions and upcoming earnings event.