Noteworthy Friday Option Activity: TWLO, ZS, POWL

Zscaler Inc. (ZS) and Powell Industries, Inc. (POWL) are experiencing significantly elevated options trading volume today, with each stock's options activity representing over 42% of its average daily share trading volume. Notably, ZS saw substantial volume in its July 2025 $307.50 strike put options, while POWL exhibited high activity in its July 2025 $220 strike call options, indicating potential directional conviction or hedging strategies focused on these long-dated contracts.

Analysis

Zscaler (ZS) and Powell Industries (POWL) are exhibiting highly unusual options market activity, with today's contract volumes equating to 43.2% and 42.6% of their respective average daily share trading volumes. This elevated activity is not broad-based but rather concentrated in specific, long-dated contracts, suggesting strategic, and potentially high-conviction, directional positioning. For Zscaler, a significant volume of 1,829 contracts was observed for the July 18, 2025, $307.50 strike put option. Such a large, focused trade could represent a substantial bearish bet against the company's valuation or a significant hedging operation by a major institutional holder. In contrast, Powell Industries saw a spike in activity for the July 18, 2025, $220 strike call option, with 306 contracts traded. This concentrated call buying points towards a bullish thesis, with participants positioning for considerable share price appreciation over the next year.

Key Decisions for Investors

• Investors should monitor the open interest for these specific ZS and POWL contracts to determine if this volume represents new positions, which would signal fresh conviction.
• The significant put volume in Zscaler at the $307.50 strike for July 2025 should be considered a key risk indicator, potentially signaling a price level that large investors are protecting against or targeting for a downturn.
• For Powell Industries, the concentrated bullish activity in the $220 strike call options for July 2025 could warrant a review of the company's catalysts and fundamental outlook to see what might justify such an optimistic price target.