UnitedHealth Stock on Track for Worst Day Since April

UnitedHealth Group Inc (NYSE:UNH) stock is eyeing its worst single-day percentage loss since April, last seen down 19.8% to trade at $281.96. The company posted mixed fourth-quarter earnings results, with earnings of $2.11 beating estimates by one cent, while revenue of $113.2 billion came in below expectations. 

The Centers for Medicare & Medicaid Services proposal to raise Medicare Advantage rates by 0.09% -- far below expectations of a 4-6% increase -- is weighing on the shares, as well as UnitedHealth's soft revenue guidance. In response, Piper Sandler lowered its price target to $396 from $417. 

The equity has dropped more than 48% over the last 12 months, and last year was the worst stock on the Dow Jones Industrial Average (DJI). Shares earlier gapped to their lowest level since August, breaking below the supportive the 120-day moving average, which had been containing pullbacks since November.

The security is seeing unusual options activity today, with 480,000 calls and 342,000 puts exchanged so far, which is eight times the volume normally seen at this point. The most popular contract is the January 15, 2027 600-strike call, where new positions are being sold to open.

Short-term options traders have been much more bearish than usual coming into today. This is per UNH's Schaeffer's put/call open interest ratio (SOIR) that sits in the 97th percentile of its annual range.