Exxon Mobil (XOM) Options Signal Bullish Momentum: Call OI Surpasses Puts, $120-$109 Straddles Emerge as Strategic Plays

• XOM’s intraday surge to $118.36 (+2.34%) reflects a short-term bullish Kline pattern and a 73.35 RSI nearing overbought territory.
• Options data reveals a 0.69 put/call OI ratio, with heavy call OI at $120 (6,808 OI next Friday) and puts at $109 ($5,558 OI next Friday), signaling a straddle-like positioning.
• Q2 2025 earnings of $7.1B and Guyana’s 11B-barrel reserves underpin long-term optimism, while a $1.09B antitrust fine introduces near-term volatility.

The confluence of explosive options positioning at key strikes and technical indicators pointing to a potential breakout suggests XOM is primed for a directional move. Traders must weigh the bullish call skew against regulatory risks and the stock’s proximity to its 30D moving average ($111.71).

Bullish OI Imbalance and Strategic Strike Levels

The options market’s current setup is defined by a stark call/put OI imbalance. For Friday expiration, the $120 call (2,850 OI) and $123 call (605 OI) show aggressive bullish positioning, while the $108 put (4,664 OI) dominates bearish bets. This suggests a straddle-like strategy, where traders are hedging both upside and downside risks ahead of potential catalysts like the Saipem-Subsea 7 merger ruling or Q3 earnings.

The next Friday options chain amplifies this dynamic. The $120 call (6,808 OI) and $109 put (5,558 OI) form a tight corridor of maximum pain, indicating a high probability of the stock consolidating between these levels. However, the RSI at 73.35 and MACD histogram (0.16) suggest momentum is still trending higher, favoring a bullish bias unless the stock closes below its 200D MA ($109.40).

Block trading inactivity means the OI distribution is driven by retail and institutional speculation rather than large-scale hedging. This increases the likelihood of gamma-driven volatility as the stock approaches key strikes, particularly $120 (call-heavy) and $109 (put-heavy).News-Driven Narrative: Growth vs. Regulatory Headwinds

Exxon’s recent news flow is a mixed bag for sentiment. The $7.1B Q2 earnings and $6.8B Guyana expansion reinforce its role as a cash-flow engine, while the $1.09B antitrust fine and European regulatory scrutiny introduce near-term uncertainty. The Yellowtail project’s early production and low-carbon ammonia deals align with long-term decarbonization trends, but the $4.6B Rosneft exit negotiations highlight geopolitical risks.

Investor perception is likely split: institutional buyers are betting on XOM’s capital return strategy (dividends and buybacks) and Guyana’s 11B-barrel reserves, while retail traders may be hedging against the antitrust fine’s impact. The options data reflects this duality, with heavy call OI (bullish conviction) and even heavier put OI (risk mitigation).

Actionable Trading OpportunitiesOptions Plays:

• Bullish Call Spread: Buy the $119 call (2,850 OI) expiring next Friday and sell the $123 call (605 OI) to cap risk. The $119 strike is just below the intraday high ($118.36), offering a high-probability entry if the stock breaks above $118.36.
• Bearish Put Spread: Buy the $109 put (5,558 OI) and sell the $108 put (822 OI) next Friday. This protects against a drop below the 200D MA ($109.40) while limiting downside exposure.

Stock Positioning:

• Entry at $115.92 (intraday low) with a target of $118.36 (intraday high). A close above $118.36 could trigger a breakout to $120, where heavy call OI may push the stock higher. A stop-loss below $112.13 (30D support) would protect against a reversal.
• Alternative bearish play: Short at $118.36 with a target of $115.92, but only if the RSI dips below 50 and the stock closes below $116.41 (Bollinger Band upper). This is riskier due to the bullish technicals.

Volatility on the Horizon

The options market is pricing in a 10-15% move by next Friday, given the straddle-like OI at $120 and $109. While the technicals and news lean bullish, the antitrust fine and European regulatory risks could trigger a pullback. Traders should monitor the MACD crossover (currently above the signal line) and RSI divergence for early signs of exhaustion.

Final Takeaway

Exxon Mobil’s options activity and fundamentals paint a bullish but cautious picture. The stock’s surge to $118.36, combined with heavy call OI at $120 and strong earnings, supports a buy-the-dip strategy near $115.92. However, the regulatory risks and put-heavy positioning at $109 mean hedging is essential. For those with a longer-term view, the $120 call next Friday offers a high-reward play if the stock breaks above its 30D MA and holds the $118.36 level.