Zen Options Essentials: July 9, 2026

Dear WallStreetZen Member,

This week, our Smart Leverage Alert centers on Bristol Myers Squibb (BMY). 

One of the largest drugmakers in the world has returned nearly 25% over the past year. 

Yet despite this fact, investors still aren't paying attention because of the coming patent expiration for Eliquis, its blockbuster blood thinner. 

That overhang has kept investors cautious, even as the business keeps delivering. Bristol Myers Squibb has now beaten Wall Street's earnings estimates for 11 straight quarters, topping forecasts by 11% in its most recent report. Gross margins run north of 70%, and the business generated roughly $13 billion in operating cash flow last year.    

But here’s why it represents an opportunity moving forward. Its newer generation of drugs, spanning immunology, cancer, and neurology, is on track to make up nearly 60% of revenue, replacing the very legacy drugs the market is worried about. 

There's also a potential upside catalyst ahead: An FDA approval decision on the company’s multiple myeloma treatment is expected in August, one of several late-stage decisions due in the back half of this year that could open new revenue streams. 

Our Zen Ratings model confirms the strength. BMY earns an A rating, which amounts to a Strong Buy recommendation, landing in the top 2% of more than 4,600 stocks based on stellar fundamentals. It’s also the #1-ranked stock in the A-rated General Drug Manufacturer industry.

Looking at the Component Grades that shape the overall grade, BMY ranks in the top 7% for Financials, top 6% for Safety, and the top 2% for Value. That mix suggests this a high-quality, financially sound business at a discount, with durability the market keeps underrating. 

Our Logic

With Zen Options Essentials, we use "Smart Leverage" — Deep-In-The-Money options that let you control shares for a fraction of the cost, with your maximum risk strictly defined from day one.

The "Smart Leverage" Setup: BMY Long Call

Given the strong fundamental case and the pipeline catalysts building into the back half of the year, here's how we're structuring the trade using Smart Leverage — Deep-In-The-Money calls that move nearly dollar-for-dollar with the stock, but with strictly defined risk from day one. 

Instead of committing $5,797 to own 100 shares outright, a Deep-In-The-Money Call lets you control those same shares for $1,025. 

• The Play: $50 Strike Call (Expiring Jan 15, 2027)
• Delta: 0.8148 — Right in our sweet spot. This option moves nearly dollar-for-dollar with the stock. You get the upside with significantly less capital at risk.
• Intrinsic Value: ~78% — More than three-quarters of what you pay is real value, not time decay. This is what separates a Smart Leverage setup from the kind of speculative options trades that blow up amateur accounts.
• Leverage Multiple: 3.61x — Every dollar moves 3.6x harder than the stock, while the deep ITM strike still keeps meaningful downside protection versus a naked speculative call.
• The Target: For this position to double (+100%), BMY only needs to reach approximately $69.33 — a roughly 20% move in the stock that produces a 100% return on the option premium.

Why Options Over Shares?

A 20% move in BMY stock would be a solid return for shareholders. In this Deep-In-The-Money option, that same move has the potential to double your investment while putting only $1,025 at risk instead of $5,797.

That's the power of Smart Leverage: stock-like upside with a fraction of the capital and strictly defined risk from day one.

What To Do Next?

BMY is just one of the setups our Zen Options Essentials TradeFinder identified this week.

And the best part? You don't need to spend hours doing research to find these trades. The TradeFinder does the heavy lifting — scanning for Deep-In-The-Money options with the optimal Delta, the right Intrinsic Value, and the right Leverage Multiple — so you can evaluate a trade like this in minutes.

How is that possible?

Because the best options trades aren't about picking exotic strategies or timing the market perfectly. They're about finding great stocks…and using Smart Leverage to control your risk while amplifying your upside.

EXACTLY what the Zen Ratings model is built to find.

EXACTLY what this methodology has been delivering.

If you'd like to see how this entire methodology works, start by watching our presentation, "Options Trading with the Zen Ratings." It walks through the Smart Leverage framework, the TradeFinder, and how we identify these opportunities step by step.

Options Trading with the Zen Ratings >

Or, perhaps you are ready to start using Smart Leverage by becoming a Zen Options Essentials member. Click below to join: 

Zen Options Essentials >

Happy Investing,

Mijusko Sibalic

Senior Writer, Zen Options Essentials

Want to get in touch? Email us at news@wallstreetzen.com.