$UNH Options Intelligence

🎯 SELL UNH DEC 05 320/330 CALL SPREAD

I recommend a bear call spread because the current term structure and volatility environment strongly favor selling premium. UNH options show elevated implied volatility (IV) around 40.9%, well above the 29.4% baseline historical volatility, signaling overpriced options and a premium selling opportunity. The stock price at $320.52 is below its 20-day ($341.32), 50-day ($347.66), and 200-day ($375.13) moving averages, indicating bearish technical pressure. The recent volume decline and mixed trading signals suggest weakening momentum. Additionally, the put/call volume ratio of 0.06 is very bullish, but the stock is near strong resistance at $341.46, making upside beyond 330 less likely in the near term. The next earnings date is Jan 15, 2026, so selling premium in near-term expirations before earnings is appropriate to capture time decay without earnings risk.

Sell UNH Dec 05 320/330 Call Spread
Stock Price: $320.52 | Entry: Sell Dec 05 320 Call at ~$10.00 bid, Buy Dec 05 330 Call at ~$6.00 ask
Net Credit: Approximately $4.00 (Sell 320 Call bid $10.00 - Buy 330 Call ask $6.00)

📊 Trade Metrics

• Max Profit: $400 per spread (net credit received) if UNH ≤ $320 at expiration
• Max Loss: $600 per spread (difference between strikes $10 minus $4 credit) if UNH ≥ $330 at expiration
• Breakeven: $324 (320 strike + $4 credit)
• Probability of Profit: Moderate to High (stock below resistance, bearish technicals)
• Days to Expiration: 18 days

📈 Term Structure & Volatility Analysis

• Baseline 90-day Vol: 29.4%
• 18-day Clean IV: ~41.8% (overpriced, sell premium signal)
• Market IV Rank: 100% (very high, favors premium selling)
• Earnings Multiplier: 2.86x (high expected earnings volatility, but trade expires before earnings)
• Calendar Opportunity: No (IV compressed in near-term expirations)

📈 Greeks & Volatility

• Delta (320 Call): ~0.50 (ATM)
• Theta: Positive for seller (time decay benefits)
• Vega: Negative for seller (benefits if IV contracts)
• Current IV: 40.9% (elevated vs historical)
• Put/Call Volume Ratio: 0.06 (very bullish sentiment, but price near resistance)

🎯 Why This Trade

The term structure shows UNH options are trading with elevated IV well above baseline, indicating overpriced premium ideal for selling. The stock's price at $320.52 is below key moving averages and near technical resistance at $341.46, limiting upside risk. Recent market intelligence notes volume divergence and weakening momentum, supporting a neutral-to-bearish near-term view. The high IV Rank (100%) and expected earnings volatility multiplier of 2.86x heighten premium levels, but since earnings is after Jan 15, this Dec 05 expiration avoids earnings risk while capturing time decay. The put/call volume ratio is very bullish, but the technical resistance and volume decline suggest limited immediate upside, making a bear call spread an efficient defined-risk strategy.

📊 Pro Analysis

• Current IV (40.9%) vs Historical (29.4%) indicates selling premium
• RSI near 37 (neutral, slightly oversold) suggests no strong immediate bounce
• Stock below 20, 50, 200-day MAs indicates bearish trend
• Support near $314.66, resistance near $341.46
• Institutional buying mixed but recent volume decline signals caution

🔍 Earnings Date Check

• Earnings on 2026-01-15
• Recommended expiration Dec 05 is BEFORE earnings, thus no earnings risk exposure

💡 Trade Management

• Entry: Place limit order to sell Dec 05 320 Call at $10.00 and buy Dec 05 330 Call at $6.00 for $4.00 net credit
• Target: Close at $1.00 - $1.50 debit for ~60-75% profit as time decay accelerates
• Stop: Close if UNH breaks above $330 with strong momentum
• Time Stop: Close 2 days before expiration if no profit target hit

📅 Economic Events

• Non-Farm Payrolls on Dec 05 (same day as expiration, monitor volatility)
• Fed Rate Decision and CPI on Dec 10 (post-expiration, no direct impact)

🔒 Pricing Validation

• 320 Call intrinsic value: $0.52 (stock $320.52 - strike $320)
• 330 Call intrinsic value: $0 (OTM)
• Spread intrinsic max loss $10 - credit $4 = $6 max risk confirmed
• Put-call parity and bid/ask spreads respected

🔍 Market Overview

The market is currently in a phase of elevated volatility and narrowing leadership, with risk-on sentiment fading and rotation toward defensive sectors like healthcare. UNH, a healthcare giant, is trading below key moving averages with weakening volume, signaling short-term pressure. The Fed's cautious stance and stable 10-year yields around 4.1% contribute to a cautious environment. UNH's fundamentals remain solid with raised EPS guidance, but recent price weakness and technical resistance near $341 limit near-term upside. This makes defined-risk premium selling strategies like bear call spreads attractive to capitalize on high IV and time decay while limiting risk.

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Confidence Level: Moderate to High
The trade aligns with elevated IV, technical resistance, and market sentiment. Risk is defined with a max loss of $600 per spread, and upside breach above $330 is the main risk. The trade avoids earnings risk and uses high premium to the seller's advantage.