Disclaimer: The trades discussed in this blog reflect the author’s personal strategies and decisions. These are not financial advice and should not be considered recommendations to buy, sell, or hold any financial instruments. The author is not a licensed financial advisor. Options trading carries significant risk, and readers should perform their own research or consult a qualified financial advisor before making any investment decisions. Past performance does not guarantee future results.
Today, during the final trading minutes, I focused on Regeneron Pharmaceuticals (REGN), which is currently trading at $696.02. Regeneron is a leading biotech company with an impressive track record in drug development and commercialization, particularly in ophthalmology, immunology, and oncology.
I like REGN for its strong fundamentals and recent positive catalysts. The company’s flagship eye treatment, Eylea, continues to generate solid revenue, especially with the introduction of its high-dose version, Eylea HD. The uptake of this new formulation has been strong despite increased competition. Meanwhile, Dupixent, another of REGN’s blockbuster drugs, is expanding into new indications, including COPD, making it a key driver of future growth.
Rather than buying shares outright or purchasing call options, I opted for a bull put spread to take advantage of REGN’s strength while maintaining defined risk. Here’s the trade:
REGN Bull Put Spread
- Sell 1 Put Contract: Strike Price $650, Expiration End of Next Month
- Buy 1 Put Contract: Strike Price $640, Expiration End of Next Month
Here is what the P&L profile of this trade looks like:
As you can see from the image above, I’m aiming for REGN to remain above $647.75. Over the past days, I noticed that $650 behaved like a nice price support. Also, I have measured a cycle equal to 331 business days, and REGN looks close to the bottom (in fact, it may have already hit it). I like the 331 business days prospect: if I realize I’ll be losing money by the end of the next month, I may always roll my position over to the month after (or even later).
For completeness, here is the price chart of the stock:
Why This Strategy Makes Sense
I did my homework and researched the company, so here are the reasons I found to buy REGN:
- Fundamental Strength – Regeneron has a diversified portfolio with multiple revenue drivers. Eylea HD is seeing strong adoption, Dupixent is expanding into new markets, and recent approvals for drugs like Libtayo (oncology) and Kevzara (rheumatoid arthritis) add to the company’s growth story.
- Pipeline Progress & New Drug Approvals – REGN’s pipeline is robust, with promising late-stage candidates such as fianlimab (melanoma) and linvoseltamab (multiple myeloma). The company is also advancing gene therapy projects following its Decibel Therapeutics acquisition.
- Shareholder-Friendly Moves – Regeneron recently initiated a quarterly dividend and announced a $3 billion stock buyback, signaling confidence in its long-term growth.
- Low Debt, Strong Cash Reserves – With a debt-to-capital ratio of just 8%, Regeneron is in a much stronger financial position than most biotech peers. The company also holds $17.9 billion in cash, giving it ample flexibility for further investments and acquisitions.
- Defined Risk, High Probability Trade – Selling the $650 put provides a reasonable margin of safety, considering REGN is trading near $696. Even if the stock dips slightly, the trade can still be profitable. The bull put spread structure also limits potential losses.
For transparency, you can find all my trades in the public trade log.
