February 2026 Options Now Available For Occidental Petroleum (OXY)

Analysis of Occidental Petroleum (OXY) options reveals potential strategies for investors. Selling the $42.50 put offers an 8% discount to the current price with a 69% chance of expiring worthless, yielding a potential 5.98% return (8.83% annualized). Alternatively, a covered call strategy at the $47.50 strike could generate an 11.59% total return if the stock is called away, but also carries a 45% chance of expiring worthless, resulting in an 8.47% return (12.51% annualized).

Analysis

Occidental Petroleum (OXY), trading at $46.06 per share, offers options-based strategies for investors. Selling the $42.50 strike put contract, which is approximately 8% out-of-the-money, provides a $2.54 premium. This could result in acquiring OXY shares at an effective cost basis of $39.96 if assigned, or generate a 5.98% return (8.83% annualized YieldBoost) if the put expires worthless, an event with a current estimated probability of 69%. Conversely, for current OXY shareholders, selling a covered call at the $47.50 strike, about 3% out-of-the-money, yields a $3.90 premium. This strategy could lead to a total return of 11.59% (excluding dividends) if the stock is called away at the February 2026 expiration. If this call expires worthless, which has an estimated 45% probability, it would provide an 8.47% premium return (12.51% annualized YieldBoost). The implied volatility for the put is 35% and for the call is 36%, both slightly above OXY's trailing twelve-month actual volatility of 34%, suggesting option premiums are moderately reflecting recent price fluctuations without indicating extreme fear or complacency.

Key Decisions for Investors

• Investors interested in acquiring Occidental Petroleum at a discount to its current price of $46.06 could consider selling the $42.50 put, aiming for an effective purchase price of $39.96 or an 8.83% annualized yield if the option expires worthless.
• Existing Occidental Petroleum shareholders seeking to generate income and who are willing to cap potential upside above $47.50 could evaluate selling the February 2026 covered call, which offers a potential 11.59% total return if called or a 12.51% annualized yield if it expires unexercised.
• Given that implied volatilities (35-36%) are marginally higher than recent historical volatility (34%), conditions may be moderately favorable for option selling strategies, though investors should monitor changes in these volatility spreads and OXY's fundamental outlook.