Options Playbook Radio 461: Escape the UNH Trap
Summary
Host Brian Overby discusses a front spread strategy for UnitedHealth Group (UNH) following a 20% stock drop caused by flat Medicare Advantage payment rates. He explains how to execute a 1x2 call spread using March 2026 expirations, specifically buying one $300 call and selling two $315 calls for a net credit. This trade leverages high implied volatility and requires holding 100 shares of UNH to cover the short leg, effectively doubling upside exposure between the strike prices while capping risk.
Topics discussed
Show intro and welcome to Options Playbook
UnitedHealth stock drop due to Medicare policy news
Context on holdings and the need for a quick trade
Explaining the 1x2 Front Spread structure
Strategy rationale: acting fast on news-driven dips
Defining specific strikes and expiration dates
Net credit entry and importance of stock ownership
Profit mechanics and leverage from 300 to 315
Recap of trade details and recent earnings context
Exit conditions and downside protection
Outro and preview of next VIX trade
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