Buy Call NVO

May 1, 2024
Novo Nordisk (NVO) Earnings

Ahead of the “big” Federal Reserve event this afternoon I wanted to highlight what the options market is pricing in for Novo Nordisk (NVO) earnings tomorrow morning.

Headed into the event, we are holding our full NVO call position. And while our trade has not worked yet, I am encouraged by the stock’s resilience in recent weeks even as the market has come under pressure. For that reason, and because option activity has been strong, as well as the positive reaction to peer Eli Lilly’s (LLY) earnings report earlier this week, I am going to hold my NVO position through the announcement.

That being said, there is risk in holding a call position through earnings, and should the stock fall, our calls will come under a ton of pressure. And if that risk is too great for you, you must Sell to Close a piece, or your entire position, today before the market close.

NVO - With the stock trading at 129, the options market is pricing in a move of $7 this week, or 122 to the downside and 136 to the upside.
Open interest is skewed bullish on a ratio of 1.5:1 call vs. put.
Skew is pricing in typical downside fear and upside interest.

March 12, 2024
Buy the Novo Nordisk (NVO) September 135 Calls (exp. 9/20) for $14.50 or less

Today we are going to freshen up the portfolio a bit by buying one of the best-looking stocks in the market while selling our two worst-performing holdings.

Let’s start with NVO which has been riding the “miracle” weight-loss trade the past year, and continues to see very strong call buying including these trades recently:

Today - Buyer of 1,500 Novo Nordisk (NVO) June 140 Calls for $8 – Stock at 134

Thursday - Buyer of 4,500 Novo Nordisk (NVO) April 140 Calls for $4.50 – Stock at 137

While we may not be “early” to the NVO stock move, I think the stock looks terrific, and option activity remains strong, so let’s add the stock to the portfolio today.

To execute this trade you need to:

Buy to Open the NVO September 135 Calls

The most you can lose on this trade is the premium paid, or $1,450 per call purchased.