UNH Analysis

UnitedHealth Group Inc. (UNH)

Update 5/31/2019I exited UNH 21 days prior to expiration, for a $1.64 debit, producing a $0.64 profit per share, with stock shares trading at $240.23, or $6.53 above the entry point. The exit came at 28% of maximum potential profit, below my 50% target. The implied volatility rank at exit was 37%.

Shares rose in two steps to a peak of $251.18 during my holding period, and then dropped off for a week as exit approached.

Shares rose by 2.8% over 30 days, or a 34% annualized rate. The options position produced a 39.0% return for a 475% annualized rate.


I have entered a short iron condor spread on UNH, using options that trade for the last time 51 days hence, on June 21. The premium is a $2.28 credit and the stock at the time of entry was priced at $233.70.

The profit zone for this position is between $260 on the upside and $210 on the downside.

The implied volatility rank (IVR) stands at 46.

Premium: $2.28 Expire OTM
UNH-iron condor Strike Odds Delta
Long 270.00 96.0% 4
Break-even 262.28 87.5% 13
Short 260.00 79.0% 22
Puts
Short 210.00 84.0% 14
Break-even 202.28 80.5% 10
Long 200.00 77.0% 6

The premium is 22.89% of the width of the position’s wings.

The risk/reward ratio is 3.4:1.

By Tim Bovee, Portland, Oregon, May 1, 2019

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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Based on a work at www.timbovee.com.

3 thoughts on “UNH Analysis

  1. […] Despite the Sturm und Drang of the markets as the U.S.-China tariff war heats up, my six positions remain within their profit ranges. The options positions are all short iron condors with the short calls and puts set as close to a 20 delta at entry as the grid would allow. The stock symbols corresponding to my options positions, with links to the analyses, are  CGC, IYR, UNH, XBI, XLB and XOP. […]

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