Noteworthy Friday Option Activity: AAL, OXY, ZM

Occidental Petroleum (OXY) saw unusually high options activity with 41,258 contracts traded (≈4.1M underlying shares), equal to about 46.8% of its one‑month average daily volume (8.8M); the February 20, 2026 $47.50 call accounted for 9,126 contracts (≈912,600 shares). Zoom Communications (ZM) printed 15,682 option contracts (≈1.6M underlying shares), roughly 45.7% of its one‑month average daily volume (3.4M), led by the March 20, 2026 $100 call with 3,685 contracts (≈368,500 shares). The concentration of large call volumes signals notable speculative/bullish positioning and elevated flow-driven risk that could influence short-term price moves and liquidity in both names.

Analysis

Market structure: Heavy one‑way flow into long‑dated OXY (Feb 20, 2026 $47.50 calls: 9,126 contracts ≈912.6k shares) and ZM (Mar 20, 2026 $100 calls: 3,685 contracts ≈368.5k shares) implies concentrated directional bets that will create dealer delta-hedging (dynamic buying of underlying on positive flow). That buys equity and, for OXY, increases tail exposure to crude moves; OXY flow equals ~46.8% of its ADV and ZM flow ~45.7% of its ADV, large enough to move prices short‑term and compress IV skew if sustained.

Risk assessment: Key tail risks are an oil demand shock (OXY downside) or a negative guidance/earnings surprise at Zoom (ZM) causing IV collapse; both have high gamma into the expiries (14–15 months out) so timing of catalysts matters — watch OXY quarterly results and WTI >$80 or <$55 levels, and ZM earnings/guide dates within 3–6 months. Hidden dependency: these blocks may be structured (synthetic longs, collars, or covered-call trades) so net directional exposure could be smaller than gross volume suggests; verify block trade prints and put/call ratio within 72 hours.

Trade implications: For OXY, prefer risk‑defined bullish exposure: buy Mar 2026 45/60 call spread (debit) size 1–2% NAV, hedge with 1% hedge short CVX to isolate idiosyncratic upside; trim on OXY >$47.50 or WTI >$85. For ZM, use calendar or diagonal call spreads into Mar 2026 to capture long‑term upside while limiting IV decay — e.g., buy Mar 2026 95/105 call spread funded by selling Mar 2026 60–70 short puts-sized to net ~0.5–1% NAV.

Contrarian angles: Consensus bullish reading may be overstated — large blocks often originate from structured sellers (income desks) so upside may be transient once dealers unwind; a 10–20% IV collapse after a non‑catalyst quarter is plausible. Historical parallel: concentrated long‑dated call flow preceded short squeezes then sharp reversals in 2020–21; set stop losses (10–20%) and profit targets (15–30%) and monitor block trade disclosures within 48–72 hours to reassess direction.

Key Decisions for Investors

• Establish a 1–2% NAV bullish skew in OXY via Mar 2026 45/60 call debit spread (buy 45, sell 60) to limit premium, initiate within 7 trading days; trim half at OXY >$47.50 or WTI> $85, full exit on OXY drop below $30.
• Create a 0.5–1% NAV directional ZM position via Mar 2026 95/105 call spread funded by selling Mar 2026 60–70 cash‑secured puts (size puts = ~50% notional of calls) to monetize elevated IV while capping downside; unwind if ZM misses guidance or IV falls >25% post‑print.