by Ian Harvey
November 08, 2018
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
UnitedHealth Group Inc. (NYSE:UNH)
UnitedHealth Group should continue to climb higher after receiving a boost from the mid-term elections, which is likely to safeguard the Affordable Care Act. An option call trade was recommended to “Armchair Trader” Members on Tuesday, October 23, 2018, based on a key transition that has helped it avoid some of the headwinds that its peers have had to deal with, and smart strategic moves that have put the health insurer in a position to take maximum advantage of favorable trends in certain areas of the market.
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
UnitedHealth Group Inc. (NYSE:UNH), a leader in health insurance for years, has made a key transition that has helped it avoid some of the headwinds that its peers have had to deal with, and smart strategic moves have put the health insurer in position to take maximum advantage of favorable trends in certain areas of the market.
Last Tuesday's third-quarter financial report saw UnitedHealth produce strong numbers; and with strong momentum, has high expectations that 2019 could be an even better year operationally than 2018 was, and that's making this options trade look positive.
UnitedHealth's third-quarter results were just the latest in a series of encouraging performance from the health insurer. Revenue of $56.6 billion was up 12% from year-ago levels, outpacing what those following the stock had expected to see on the top line by a narrow margin. Net income jumped 28% to $3.28 billion, and after allowing for some extraordinary items, adjusted earnings of $3.41 per share topped the consensus forecast among investors by $0.12 per share.
** OPTION TRADE: Buy UNH JAN18 2019 270.000 CALL at approximately $6.00.
Place a pre-determined sell at $12.00.
Also include a protective stop loss of $2.40.
The Result So Far………
Shares of insurer UnitedHealth surged 4.2% higher on Wednesday to eclipse the highs seen in September and October — marking a rise of nearly 8% from the lows seen in late October. Not only did the Democrat’s gain of the House bolstering sentiment — on their focus on expanding coverage — but solid earnings from competitor Humana (NYSE:HUM) helped as well.
This increase of the stock price was sufficient to bolster the recommended call trade on UNH to surpass the 100% sell price at $12.00 – reaching a high price of $14.05 yesterday.
So, for “Armchair Trader” members, who managed to execute this trade recommended by Stock Options Made Easy; and had an exit price already established, profits of 100% were made.
Entering the option trade at a cost of $6.00 or less; and the sell price on the option was set at $12.00; a profit of 100% was made in a couple of weeks. The option trade price went as high as $14.05 during yesterday’s trading, passing our sell-price of $12.00. Therefore, one options contract would provide a profit of $600.00; or 100% Profit.
If the trader had bought at $6.00 and sold at $14.05, then one options contract would provide a potential profit of $805.00; or $134% Profit.
A NICE FINISH TO THE WEEK!
The company will next report results on Jan. 15 before the bell. Analysts are looking for earnings of $3.22 per share on revenues of $58.1 billion. When the company last reported on October 16, earnings of $3.41 per share beat estimates by 11 cents on a 12.4% rise in revenues.
UnitedHealth Group has seen an increase in hedge fund interest in recent months. UNH was in 68 hedge funds' portfolios at the end of June.
As you would have by now realized, some of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, as obvious in this case where the trade was based on varying factors; but during earnings season this strategy of predicting earnings has been very profitable.
Sometimes it is our approach to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use – such as found with the “Earnings Predictions Program”. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.
Strategies to Consider……
It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?” .....READ MORE.....
"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.……continue reading this article……
Our proven track record says it all!!
Members of Stock Options Made Easy are provided with an extensive reason as to which direction a stock will move after earnings, followed up by a recommended options trade.
If you not a member and interested in being part of this profitable action just CLICK HERE.
Other Membership Options…….
If you interested in "Earnings Predictions" just click here……
or "Mentorship Program".....click here....