Option Witch | UNH's 13% Rally Is Only Just Starting? Long-Term Open Interests Signal Sustained Upside Bets

UnitedHealth stock surged past $300 after filings revealed major investments including Warren Buffett, David Tepper and Michael Burry are piling in. Open interests for UNH signal traders are betting on sustained upside despite recent volatility in the health insurer.

UnitedHealth Tops $300 as Warren Buffett, Michael Burry Pile Into Battered Stock

UnitedHealth Group soared over 13% in premarket trading to $307, following regulatory filings that showed Warren Buffett’s Berkshire Hathaway and Michael Burry’s Scion Asset Management each made large new investments in the health insurer during the second quarter.

Berkshire purchased more than 5 million shares at an eatimated average price of $411 as of June 30, as shown in the filing. 

Source: Whalewisdom

Meanwhile, Burry’s Scion Asset Management disclosed a combination of call options tied to 350,000 UnitedHealth shares and a direct holding of roughly 20,000 shares valued at around $6 million. 

Known as the “Big Short” investor for his prescient bet against the U.S. housing market before the 2008 crash, Burry has typically taken a bearish stance in recent years. 

His UnitedHealth position stands out for both its timing and structure, targeting upside in a stock that has declined nearly 46% so far this year. The move comes as Medicare Advantage rates for 2026 have exceeded expectations and the insurer’s competitive positioning remains intact despite recent turbulence.

Source: Whalewisdom

UnitedHealth’s rally was further underpinned by fresh disclosures of hedge fund buying. Dodge & Cox acquired 4.73 million shares, while David Tepper’s Appaloosa boosted its stake to 2.45 million shares from 180,000 in the first quarter, now worth approximately $764 million. Additionally, Renaissance Technologies purchased 1.35 million shares. 

Saudi Arabia’s Public Investment Fund also reported holding call options in the company.

UnitedHealth’s Long-Term OI Shows Bullish Bets

Open interest for UNH expiring after next year showed bullish bets as Call open interest totaled at 728,558, while Puts stand at 279,079.

Source: OptionCharts

The highest open interest was seen on $500 strike call expiring January 15, 2027, with 52,545 unclosed contracts as of Aug 15. However, $200 strike put option also showed heavy bet with 35,530 unclosed contracts.

Source: OptionCharts

Option Strategy

1. Long Call (Aggressive Upside)

Structure: Buy the $350 Call ( Jan 18, 2025 expiration)

• Cost: ~$16.86 per contract (estimate)

• Max Risk: $1,686 (limited to premium paid)

• Profit Potential: Unlimited

$UNH 20260116 350.0 CALL$

Source: Tiger Trade App

Key Metrics:

• Delta: 0.319 (≈31.9% probability of expiring ITM)

• Theta: -1.109 (significant time decay risk).

Rationale: High-risk, high-reward play if UNH surges sharply.

2. Bull Call Spread (Capped Risk/Reward)

Structure:

• Buy $300 Call

• Sell $350 Call

• Net Debit: $18.01 per spread (eatimate)

$UNH Vertical 260116 300.0C/350.0C$

Source: Tiger Trade App

Rationale: Reduces upfront cost vs. a long call but caps upside at $350. Suitable for a rally to at least $350