Surging Oil Prices Push Occidental Petroleum Stock Higher

OXY already sports a 96% year-to-date lead

Digital Content Manager
Mar 7, 2022 at 10:27 AM
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Occidental Petroleum Corporation (NYSE:OXY) is up 3.5% at $58.42 at last check, after the Russia-Ukraine war earlier drove oil prices to 13-year highs. Today's massive  surge came as the U.S. and its allies considered banning Russian crude imports, which may lead to slower global economic growth, in addition to higher unemployment rates and inflation. Plus, two Carl Icahn representatives will step down from the company's board, after the activist investor exited his position. 

The equity has been climbing up the charts since late February, and is currently trading at its highest level since May 2019. Now boasting a 96% year-to-date lead, the 40-day moving average has acted as a solid area of support for the security since early 2022.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), OXY's 50-day put/call volume ratio of 0.52 ranks higher than 98% of readings from the past year. This means that while calls remain popular on an absolute basis, long puts have been getting picked up at a quicker-than-usual clip in the last 10 weeks.

Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) stands higher than all but 2% of annual readings. This indicates short-term options traders have rarely been more put-biased.

Today's options pits paint a different picture, however. So far, 29,000 calls and 16,000 puts have crossed the tape, which is five times the intraday average. Most popular is the March 47.50 put, followed by the 3/11 60-strike call, with positions being opened at both.

These traders are in luck. The equity's Schaeffer's Volatility Scorecard (SVS) sits at a 84 out of a possible 100, suggesting Occidental Petroleum stock has exceeded volatility expectations during the past calendar year -- a boon for premium buyers.

 




 
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