Exxon Mobil (XOM) Options Signal $118–$120 Bullish Contingency Amid $109 Put Defense – Here’s How to Position for Q3 Volatility

• Exxon Mobil (XOM) surges 1.93% to $117.82, trading above 30D, 100D, and 200D moving averages, signaling a short- and long-term bullish trend.
• Options data reveals a 0.69 put/call open interest ratio, with heavy call OI at $118–$120 and defensive put OI at $109, suggesting a potential breakout or consolidation.
• Recent news includes $7.1B Q2 2025 earnings, Guyana’s Yellowtail production ramp, and a $30B LNG investment in Qatar, reinforcing XOM’s growth narrative.

The combination of XOM’s technical strength, options positioning, and earnings-driven news flow points to upside potential in the near term, with key risks emerging if the stock fails to hold above $112.13 (30D support). Traders should focus on the $118–$120 call-heavy zone and $109 put defense level as pivotal inflection points.

OTM Call Clustering at $118–$120 vs. Put Defense at $109: A Battle for XOM’s Direction

The options chain for XOM reveals a striking imbalance in open interest (OI) between out-of-the-money (OTM) calls and puts. For Friday expiration, the top call strikes are concentrated at $118 (OI: 4,704), $119 (OI: 2,415), and $120 (OI: 1,417), while the largest put OI is at $108 (OI: 4,664) and $90 (OI: 4,013). This pattern intensifies for next Friday’s expiration, with $120 (OI: 6,808) and $119 (OI: 2,850) calls dominating, and $109 (OI: 5,558) and $112 (OI: 3,713) puts forming a defensive wall below $115.59 (previous close).

The 0.69 put/call OI ratio (422,283 puts vs. 609,673 calls) underscores a bullish bias in the options market. However, the heavy put OI at $109 and $108 suggests institutional hedging or speculative bearish positioning. This duality creates a high-probability scenario: if XOM breaks above $118.36 (intraday high), the call-heavy zone could drive a rapid move toward $120–$123. Conversely, a pullback below $112.13 (30D support) might trigger a test of the $109.43 lower Bollinger Band, where the $109 put OI could act as a floor.

Earnings Momentum and Guyana Expansion Fuel Bullish Sentiment – But Risks Lurk in Rosneft Negotiations

XOM’s recent news flow is overwhelmingly positive. The Q2 2025 earnings of $7.1B ($1.64/share) and $5.4B free cash flow, coupled with $9.2B in shareholder returns, reinforce its status as a cash-generative energy giant. The Yellowtail project in Guyana, now producing 250,000 barrels per day, and the $30B Qatar LNG investment further cement its growth trajectory. Additionally, the $18.4B in H1 2025 shareholder returns and $140B 2030 growth plan highlight its commitment to value creation.

However, the $4.6B write-down on the Sakhalin-1 project and ongoing negotiations with Rosneft introduce uncertainty. While the options market appears to price in continued earnings momentum, a resolution to the Rosneft dispute—whether through compensation or sanctions relief—could introduce volatility. Investors should monitor news flow for updates on this front, as it could either validate or disrupt the current bullish narrative.

XOM Trade Setup: Call Spreads at $118–$120 for Q3 Volatility, or Short Puts at $109 to Hedge Downside

For options traders, the most compelling setup lies in the $118–$120 call-heavy zone. A call spread using the $118 strike (next Friday expiration) and the $120 strike (same expiration) offers a defined-risk, high-reward structure. With XOM currently at $117.82, the $118 call (OI: 1,485) has a 58% probability of expiring in the money, while the $120 call (OI: 6,808) serves as a cap on potential gains. This strategy capitalizes on the call OI clustering and aligns with the technical target of $118.36 (intraday high) and beyond.

For stock traders, a buy-the-dip opportunity exists near $112.13–$112.31 (30D support). If XOM holds this level, a retest of the $115.92–$118.36 range is likely, with a potential target at $118.36 (intraday high) or higher. A stop-loss below $112.13 would signal a breakdown in the bullish trend.

For risk-averse investors, shorting the $109 put (next Friday expiration) could hedge downside risk. With 5,558 OI at this strike, the put is likely to expire worthless unless XOM collapses below $109.43 (lower Bollinger Band). This strategy is suitable for those holding XOM shares or bullish call positions.

Volatility on the Horizon: XOM’s $118–$120 Bullish Contingency and $109 Put Defense in Focus

The convergence of XOM’s technical strength, options positioning, and earnings-driven news flow creates a high-conviction trade. The $118–$120 call-heavy zone represents a critical inflection point for a potential breakout, while the $109 put defense level offers a safety net for downside risk. Traders should monitor the RSI (73.35) and MACD (1.10) for overbought signals that could trigger a pullback, but the overall bias remains bullish.

In the coming weeks, XOM’s ability to hold above $112.13 and break through $118.36 will determine whether the current rally evolves into a sustained uptrend. With Q3 earnings and Guyana production milestones on the horizon, the stock is well-positioned to capitalize on energy sector momentum. However, the Rosneft negotiations and broader macroeconomic risks remain watchpoints. For now, the options market and technicals align to favor a bullish stance, with structured strategies offering the best risk-reward profile.