Hims & Hers Health, Inc. (HIMS) is a company that sells curated prescription & non-prescription health products. They use telehealth doctors to support these services. HIMS stock price rocketed 27% higher yesterday when the company announced it would begin offering Ozempic class injection weight loss drugs.

From an options trader’s perspective, the news caused the stock price to increase, volatility expectations to spike, and options prices to increase substantially. The company is trending in news headlines and social media mentions are up 4,650% in the last 24 hours. The sudden explosion in attention feels manic.

This MDM Graph compares the modeled expectations of current options prices (the orange line) to the actual distribution of stock prices over the last year (the blue histogram). You can see in the chart that HIMS did not make moves anywhere close to the modeled expectations of current options prices. This is what FOMO (Fear Of Missing Out) looks like on this graph. This tells us these options are extremely expensive relative to the past movement of the stock.

The Volatility Term Structure shows that options expiring Friday have the highest volatility expectations and the most expensive options relatively speaking.To learn more about Volatility Term Structure, click here. Because we want use an option selling strategy, we will focus on Friday’s expiration.

HIMS stock price, volatility expectations, and options prices exploded higher yesterday after the company announced it would begin selling a very popular class of injectable weight loss drugs.

We can use a limited-risk, high-probability option strategy to take advantage of the current situation.

Be sure to read the ODDS Online Daily Trade Idea report to get the details of our trade ideas for HIMS.

To access Odds Online Daily and be able to see any stock you are tracking in this software, click here.

Thank you,

Don Fishback