🎯 NVO yielded a 145% gain 🔥 in 4 days: How we planned and executed

This brief explores our recent trade on Novo Nordisk AS, achieving significant gains in just 4 days. We will discuss our research approach, including technical chart analysis, fundamentals, instrument selection, and payoff profiles, which led to excellent profit outcomes. This is an informative read on butterfly spreads, highlighting their advantages over simply buying and holding calls, especially when theta is high. Let's dive in...

Date: September 08, 2025

Asset: Novo Nordisk AS ($NVO) Sponsored ADR Class B (NYSE)

Distribution: Post Closure

Last Traded Price: $54.65

Recommendation: Bullish

Strategy: Option Spreads (Put Vertical & Butterfly)

Moneyness: Out-of-the-money (OTM)

Investment Horizon: Short-term

Exit duration: Closed on demand for profit

Summary

Novo Nordisk, based in Bagsværd, Denmark, is a global healthcare leader in diabetes, hemophilia, growth hormone therapy, hormone replacement, and obesity. It has two segments: Diabetes and obesity care, covering insulins, GLP-1, protein-related products, and anti-diabetic drugs; and Biopharmaceuticals, including hemophilia, growth hormone, and hormone therapy. Its popular drugs include Levemir, NovoRapid, Victoza, Ozempic, NovoMix, NovoSeven, and others.

Novo Nordisk, being a healthcare sector giant, has been oversold on a myriad of issues: legal disputes, a series of poor quarterly earnings, and a potential class action lawsuit against HIMS in which they allegedly committed malpractices in advertising their products. HIMS and other telehealth providers appreciated during the production backdrop of NVO's Wegovy. The company's stock has been beaten down heavily since it's high in July 2024 of 145.9. The stock is positioned well for a recovery as of this writing, as multiple technicals point to an upside, which is in parallel to another health sector giant, UnitedHealth Group, UNH.

Let us look at the charts of NVO, which were sent before and after taking the trade.

Technical Analysis

The first trade alert was sent on Aug 15, 2025. Here's the chart analysis on that day:

NVO Weekly Chart. Shot taken on Aug 15, 25.

Examining the weekly chart, it is abundantly clear that the stock has been oversold, and a correction move upwards is expected, with a potential rise to 60+, based on:

• Oversold and is at a monthly 240 DMA support

• Bullish divergence between price, RSI & MACD

• Price bouncing from the monthly support zone indicated in yellow

• At the MA 240 support zone, it also coincides with the yellow zone

• Expecting overall recovery across the healthcare sector by Q4

The yellow zone bottom isn't carved on stone, but looking to the left, it is clear that the price spent reacting to that zone on several occasions back in time before an eventual breakout to the upside. This, coupled with a bullish divergence, means the price is going to come back to the MA cloud (shown in blue) naturally.

Think of the price and MACD as a stretched rubber band. Price always tries to come to its moving averages, while MACD tries to come to the mean value line at zero, as shown. MACD is hence called an oscillator, as it oscillates between the buy and sell zones around the mean value like a stretched rubber band.

To exploit this, we first sold a put vertical spread to receive a hefty credit upfront, unlike others who recommend selling out-of-the-money (OTM) credit spreads, which are theoretically safe if the price doesn't move much, as time decay accelerates the premium erosion in profit without much intrinsic value in the OTM options.

But, since we have a strong conviction that the stock moves in a certain direction, we went ahead and sold slightly aggressively at-the-money (ATM) options, which give a great credit upfront, with almost a 1:1 reward-to-risk profile.

Trade Overview

Trade 1

On August 15, 2025 (times are in CET), we sold September put verticals at 55/45 for a strike width of $10 to collect about 42% credit upfront ($420) for a 58% risk ($580 margin) to open the position.

Trade Alert in Pro-Guidance Channel

Trade 2

On August 18, we acquired long exposure in the stock by purchasing a long call butterfly spread as follows:

Trade Alert sent on NVO Butterfly Call

Here's the payoff profile of that position on August 18, 2025:

The position yields significant profit on time decay if the stock price is between the cones indicated in green, i.e., above our first long strike at $57.

Think of a call butterfly spread as a combination of bull call spread + bear call spread.

So, our short strike is located exactly in between where we sell two calls, which in this case is the $61 strike call.

How does this position behave:

• Ideally, the maximum profit occurs at expiry if the stock just ends at the short strike 61.

• But, in reality, we always close positions much earlier in profit on demand.

• So, the theoretical profit would be less, but still a great return on investment (debit paid to open the position).

• Time decay is helpful if the stock is in the green zone, especially around the short strike

• Implied Volatility is bad and works against it by pinning the profit potential around a short strike; however, a volatility crush helps significantly.

NVO butterfly call payoff profile

NOTE: The trades shown are to be considered for educational purposes only and/or may be hypothetical. Please consider this brief, which provides an idea of the trade perspective at a scale suitable for large accounts. The trades taken should be well under Max Risk, which is 2% of the account equity. To have a positive expectancy over a series of trades, there should be NO DEVIATION from the max risk mandate, which is strongly emphasized on every alert.

The stock appreciated as expected in the next days, and we closed the position around its next resistance at the 56 level, where it struggled a bit. One could hold this into expiry for even greater profit, but we closed the position on demand after a decent 145% gain combined on both the bull put spread and call butterfly position.

Pro Tip: If there's a strong bullish conviction, it is a good idea to finance the debit incurred buying options (call butterfly in this case) through selling credit spreads (e.g., bull puts, which we did) at or below the support level, where the options may expire out of the money as the stock moves up.

Conclusion

The trade doesn't require in-depth analysis, as the stock is clearly in the "margin of safety" after it has lost over half of its value this year, and is a sectoral giant with a lot of institutional activity happening lately. The stock is expected to recover sufficiently, eventually pushing our long exposure into profit. Alternatively, one could explore selling put credit spreads around the yellow bottom zone and wait for the stock to move up eventually in Q4 2025, after checking if the reward-to-risk is realistic for the perspective one is prepared to take.

Thank you for taking the time to read this brief. If you have any questions, please post them in the comments section, and one of our analysts will respond promptly.

Disclaimer: This trading brief is for educational purposes only and does not constitute financial advice. Options trading involves significant risks, including the potential loss of the entire investment. Investors should consult a financial advisor and conduct their due diligence before executing any trades. Please read the risk disclosure at OCC to understand the risk considerations required to trade options.

Notes on Assumptions: Premiums are based on direct market access tools available at our desks; actual order fills for you as a trader may vary depending upon the time of execution, broker data feed, market access, etc., among many other factors. Charts and technicals exclude fees.