XOM Options Signal $120 Call Contingency: How Traders Can Hedge or Capitalize on Earnings Volatility

• Exxon Mobil’s Q3 earnings ($7.5B) and Guyana production expansion are bullish, but short-term technicals show a bearish engulfing pattern.
• Options data reveals heavy call open interest at $120 (Nov 28 expiry) and put OI at $111, with a 0.7 put/call ratio favoring bulls.
• Climate litigation risks and Lukoil acquisition hurdles could delay momentum, but December 9’s corporate plan might unlock clarity.

Here’s the core insight: XOM’s price is caught in a tug-of-war between short-term bearish momentum and long-term bullish fundamentals. The options market is pricing in a $120 ceiling for near-term rallies, but traders need to watch support at $112.66 to avoid a breakdown.The Options Playbook: Calls at $120, Puts at $111, and What It Means

Let’s start with the numbers that scream: 5,810 open interest at XOM251128C00120000 (Nov 28 $120 calls) and 4,181 at XOM251128P00111000 (Nov 28 $111 puts). That’s not random—it’s a playbook. Bulls are betting on a post-earnings pop (Q3 results hit Nov 12) or a Guyana production-driven rally. Bears, meanwhile, are hedging with puts just below the 200D MA at $108.66. The 0.699 put/call ratio (call OI dominates) suggests a net bullish bias, but don’t ignore the bearish engulfing candle on the daily chart. If XOM breaks below $114.19 (intraday low), those $111 puts could get a sudden surge in demand.

News vs. Options: A Clash of Optimism and Caution

Exxon’s Q3 earnings ($1.76/share) and $9.4B in shareholder returns are textbook bullish. The Bahia Pipeline deal and Lukoil acquisition talks add growth narrative fuel. But here’s the catch: climate lawsuits and regulatory hurdles for Lukoil assets are real headwinds. The options market isn’t pricing in these risks yet—those $120 calls assume smooth sailing. If the December 9 corporate plan downplays energy transition costs or accelerates Guyana production, bulls could win. But if legal costs or sanctions delays are highlighted, the $111 puts might become a lifeline. Retail traders should ask: Are we buying optimism or hedging against a storm?

Actionable Trades: Calls, Puts, and Precision Entries

For options players, the most compelling setup is the XOM251128C00120000 ($120 call, expiring Nov 28). Why? It’s the highest open interest strike and sits just 4.8% above the current price. If XOM breaks the intraday high of $115.90 (which it did earlier today), this call could see explosive gamma. For a conservative play, pair it with a $111 put (XOM251128P00111000) to create a collar. The cost? Around $5.50/share in premiums, but it caps downside while letting you ride a $120+ rally.

Stock traders, look at $114.47 as a key entry point. If XOM holds above $114.19 (intraday low), target $116.61 (middle Bollinger Band) as a short-term ceiling. A breakdown below $112.66 (lower BB) would validate the bearish engulfing pattern, making $110.66 (200D MA) the next critical level. For a swing trade, consider buying on a pullback to $112.83 (30D support) with a stop just below $112.66.

Volatility on the Horizon: What’s Next for XOM

The next 10 days will test XOM’s resolve. The Nov 28 options expiry could see a forced cover if bulls push past $120, but a failed breakout might trigger a retest of $112.66. Meanwhile, the Dec 9 corporate plan is the wildcard—any shift in capital allocation toward low-carbon projects (like the Marubeni ammonia deal) could reignite long-term bullish sentiment. Traders should also watch the $115.55 (30D MA) level: a sustained close above it would signal a shift from bearish to neutral momentum.

Bottom line: XOM is a stock at a crossroads. The options market is pricing in a $120 ceiling for near-term optimism, but technicals and news flow suggest a bumpy path. Whether you’re buying calls, hedging with puts, or scalping support/resistance levels, the key is to stay nimble. After all, in energy stocks, the only constant is change—and Exxon’s next move could redefine its 2025 story.