Options traders are targeting CVS after news of its CEO replacement
CVS Health Corp (NYSE:CVS) stock is down 7.3% at $59.04 at last glance, after news that the company has replaced CEO Karen Lynch with pharmacy benefits executive David Joyner. The healthcare name previously addressed higher medical costs, and it had been reported that several options were being weighed with strategic advisors. In its release today, CVS announced it expects adjusted earnings of $1.05-$1.10 per share for its third quarter, which is scheduled for release Nov. 6.
Now trading at its lowest levels since late September, CVS Health stock is back under familiar pressure at the $60 level. Headed for its largest single-day percentage drop since its early-May bear gap, the equity is down 25.2% year to date.
Options traders are targeting CVS amid today's volatility. So far, 44,000 calls and 33,000 puts have crossed the tape, which is five times the options volume the stock has typically seen by this point in the day. The November 70 call is the most popular, with new positions opening at the weekly 11/29 50-strike put.
The bullish-leaning sentiment amongst traders isn't unusual, however. CVS' 10-day call/put volume ratio of 5.14 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 98% of readings from the past year.