Veteran Trader Suggests Selling Puts on UnitedHealth (UNH)

Using an idea proposed by Prosper Trading Academy CEO Scott Bauer, traders can profit from UnitedHealth (UNH) staying around its current levels, Bauer said on Schwab Network recently.

During the same segment, Rick Ducat, Schwab's Lead Market Technician, analyzed the technical status of UNH.

Bauer's Trading Idea

Traders should look into selling the $420 puts that expire on May 2 and selling the $430 puts that expire on the same day, Bauer said.

Bauer is carrying out the trade partly because he expects UNH to stay around the $430 level, he noted. Additionally, the trader reported that the deal nets traders about $4 of premiums. The breakeven mark on the trade is $426, he noted.

Bauer is looking to buy the shares around $425.

UNH Is Closing in on "Oversold" Levels, Ducat Reports

UNH recently reached new lows, but its Relative Strength Index, closing in on 30, is "shifting towards the oversold area," Ducat stated.

On the other hand, the shares are way below the moving averages tracked by Ducat, which are around $530. The technical analyst cited $490 and $530 as important upside areas to keep an eye on.

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Disclosure: None. This article is originally published at Insider Monkey.