Notable Monday Option Activity: PINC, ZS, STNG

Zscaler (ZS) saw 6,220 option contracts trade (~622,000 underlying shares), equal to about 47.9% of its one‑month average daily trading volume (1.3M shares), with notable activity in the $275 put expiring Nov. 28, 2025 (435 contracts, ~43,500 shares). Scorpio Tankers (STNG) recorded 3,395 option contracts (~339,500 shares), roughly 46% of its one‑month average daily volume (738,035 shares), concentrated in the $55 put expiring Jan. 16, 2026 (3,021 contracts, ~302,100 shares). These concentrated put flows indicate sizeable hedging or bearish/speculative positioning that could influence near‑term price and volatility for both tickers.

Analysis

Market structure: Concentrated put demand raises implied volatility and creates asymmetric short-gamma risk for market makers; that benefits volatility sellers who can collect elevated premia but hurts long-equity holders if delta-hedging amplifies downside over the next 1–6 weeks. For STNG the flow signals elevated probability of weaker freight rates into Jan 2026, which mechanically pressures spot tanker names and related freight derivative markets and could rerate peer multiples by 10–20% if sustained.

Risk profile: Tail risks include a regulatory/security event for ZS that could wipe out >30% of market cap or an oil/disruption shock that lifts tanker spot rates >50% reversing bearish bets. Immediate (days) risk is gamma-driven price moves; short-term (weeks–months) risk is position unwind and IV compression; long-term (quarters) fundamentals (earnings, charter rates) reassert. Hidden dependency: dealers’ delta hedges can create feedback loops; concentrated institutional hedges may be closed/rolled en masse at quarter-ends.

Trade implications: For ZS, elevated long-dated put interest creates opportunity to sell defined-risk put spreads or short near-term volatility if IV rank >70 and you have a 6–12 week view; for STNG, prefer long put spreads to limit premium paid while targeting >20% downside to breakeven by Jan 2026. Pair trades: short STNG / long a cleaner balance-sheet tanker (e.g., DHT or FRO) to isolate idiosyncratic weakness; size 1–3% portfolio and use 15–25% stop-loss thresholds.

Contrarian angles: The market may be misreading hedges as directional bets — positioning could reverse quickly if macro (oil inventories/OPEC) or ZS enterprise win metrics beat. Historical parallels: crowded put positioning has produced both forced rallies and sharp selloffs depending on dealer net gamma; therefore cap exposure, use defined-risk option structures, and exit if IV compresses >30% or underlying moves 15% against you within 10 trading days.

Key Decisions for Investors

• Zscaler (ZS): Establish a 1.5% portfolio position by selling a defined-risk put spread (sell Nov 2025/Jan 2026 near-$275 put, buy a lower strike 6–8% wide) if ZS IV rank >70 and collect premium; unwind if IV compresses >30% or stock rallies >15% from entry within 6–12 weeks.
• Scorpio Tankers (STNG): Allocate 1–2% portfolio to a long Jan 16, 2026 $55/$45 put spread (limit premium) to express bearish view; take profits if STNG falls >20% or close if spot VL widens >40% without price follow-through within 8–12 weeks.
• Pair trade: Short STNG notional 1% and go long DHT or FRO notional 1% (equal dollar) to capture relative weakness; target a 10–15% relative move within 3–6 months and cut if correlation breaks down for 4 consecutive weekly closes.