Zscaler (ZS) Plunges 3.38% Amid Insider Selling and Volatile Options Activity – What’s Next?

Summary
• Zscaler (ZS) trades at $320.095, down 3.38% intraday, with a range of $318.45 to $333.90
• Mitsubishi UFJ Asset Management boosts stake by 46.5%, but insiders sold 43,084 shares worth $12.45M
• Options chain shows high leverage ratios (up to 163.59%) and mixed implied volatility (33.95%–61.92%)
• RSI at 65.35 suggests moderate momentum, while Bollinger Bands indicate a 319.192 pivot point

Zscaler’s sharp intraday decline has ignited a frenzy in options activity and raised questions about insider sentiment. With the stock trading near its 52-week low of $164.78 and a dynamic PE of -1,221.64, the move reflects a mix of institutional confidence and short-term bearish pressure. The 3.38% drop has triggered a surge in call and put options trading, particularly around the $330 strike, as traders position for volatility.

Insider Selling and Earnings Optimism Clash
Zscaler’s 3.38% intraday drop is driven by a combination of insider selling and mixed institutional sentiment. Over the past three months, insiders sold 43,084 shares worth $12.45 million, including significant transactions by Adam Geller and Robert Schlossman. This contrasts with Mitsubishi UFJ Asset Management’s 46.5% stake increase to 157,342 shares, valued at $49.4 million. While Q3 earnings beat estimates (EPS $0.89 vs. $0.80 expected), analysts raised price targets but left the consensus at 'Moderate Buy.' The stock’s decline suggests short-term profit-taking after a 21.3% revenue growth, with options activity amplifying volatility as traders hedge against potential pullbacks.

Tech Sector Volatility: CrowdStrike (CRWD) Trails ZS Amid AI Hype
Zscaler’s 3.38% drop outpaces its sector leader, CrowdStrike (CRWD), which fell 1.40% intraday. Both stocks face pressure from AI-driven cybersecurity competition, but ZS’s insider selling and elevated options turnover highlight divergent short-term dynamics. While CRWD’s recent all-time high reflects strong AI adoption, ZS’s 52-week low of $164.78 and negative PE ratio (-1,221.64) underscore its vulnerability to profit-taking. The tech sector’s mixed performance underscores the fragility of growth narratives in a high-interest-rate environment.

Options Playbook: High-Leverage Calls and Gamma-Driven Puts
• 200-day MA: 260.48 (far below current price); RSI: 65.35 (moderate momentum); MACD: 7.03 (bullish divergence)
• Bollinger Bands: Upper $341.56, Middle $319.19, Lower $296.82 (key support at $319.19)
• Turnover rate: 0.389% (light volume, but options turnover spikes)

Zscaler’s technicals suggest a short-term bearish bias with potential for a rebound above $319.19. The 52-week low of $164.78 remains a distant floor, but near-term support at $300 (Bollinger Lower Band) and $296.82 (lower band) could trigger stop-loss activity. Options data reveals two high-conviction plays:

• ZS20251121C330 (Call, $330 strike, 11/21 expiry):
- IV: 35.23% (moderate)
- LVR: 82.21% (high leverage)
- Delta: 0.328 (moderate sensitivity)
- Theta: -0.756 (high time decay)
- Gamma: 0.0193 (strong price sensitivity)
- Turnover: 77,109 (liquid)
- Payoff (5% downside): $1.95 per contract (max(0, 304.09 - 330) = $0)
- This call thrives on a rebound above $330, leveraging high gamma to amplify gains if the stock breaks resistance.

• ZS20251121P300 (Put, $300 strike, 11/21 expiry):
- IV: 33.95% (moderate)
- LVR: 330.55% (extreme leverage)
- Delta: -0.109 (low sensitivity)
- Theta: -0.01995 (low time decay)
- Gamma: 0.01037 (modest sensitivity)
- Turnover: 3,700 (liquid)
- Payoff (5% downside): $20.09 per contract (max(0, 300 - 304.09) = $0)
- This put offers outsized leverage for a breakdown below $300, though its low delta requires a sharp move to unlock value.

Aggressive bulls should target ZS20251121C330 into a break above $330, while bears may short ZS20251121P300 if the stock fails to hold $319.19.

Backtest Zscaler Stock Performance
Below is the event-study report that evaluates how Zscaler (ZS.O) behaved after every daily drop of 3 percent or more from 1 January 2022 through 11 November 2025. Key take-aways • Sample size: 131 events (trading days when the stock’s closing price fell ≥ -3 %). • Average performance: the stock typically rebounded modestly; the median 5-day return following a ≥-3 % drop was +1.7 %, with a 57 % win rate. • No horizon up to 30 trading days produced returns that were statistically significant at the 95 % level versus the benchmark. • Mean re-accumulation is front-loaded: most of the upside (≈1 %) materialised within the first week; returns flattened thereafter. • Risk skew: by day 20 the distribution becomes negatively skewed, i.e., large losers drag down the average even as win-rate stays ~51-55 %. Assumptions & parameter choices 1. “-3 % intraday plunge” was interpreted as a close-to-previous-close decline of ≤-3 % because true intraday data were not requested or supplied in the original query. 2. Price series used: daily close (default) for both signal detection and performance calculation. 3. Event test window: 30 trading days post-signal (industry convention). 4. Benchmark: equal-length buy-and-hold in ZS for the same period, auto-generated by the back-tester. If you’d like any of these assumptions adjusted (e.g. use high-low intraday drawdown instead of daily close, change the post-event window, or compare against Nasdaq-100 rather than the stock itself), just let me know.You can explore the full interactive breakdown—including cumulative curves, distribution plots, and individual event drill-downs—via the module below.Please open the interactive panel to view the complete statistics and charts.

ZS at Crossroads: Break Below $300 or Rally to $330?
Zscaler’s 3.38% drop has created a pivotal juncture for traders. The stock’s technicals and options activity suggest a high-probability range between $300 and $330, with key support at $319.19 (Bollinger Middle Band) and resistance at $330 (psychological level). A breakdown below $300 would validate bearish sentiment, while a rebound above $330 could reignite growth optimism. Sector leader CrowdStrike (CRWD, -1.40%) offers a cautionary tale for ZS’s AI-driven peers. Investors should monitor insider activity and earnings guidance, with ZS20251121C330 and ZS20251121P300 as high-conviction plays. Act now: Short ZS20251121P300 if $319.19 breaks, or buy ZS20251121C330 on a $330 close.