$COP Options Intelligence

# COP Options Analysis: February 11, 2026

🎯 SELL COP FEB 20 110/105 PUT SPREAD

Current Stock Price: $108.58

I recommend this credit spread because the term structure reveals a compelling premium-selling opportunity: near-term options are significantly overpriced relative to baseline volatility. The 7-day Clean IV of 18.2% sits well below the 31.7% baseline 90-day volatility, but the market is pricing in elevated risk ahead of the next earnings date (May 14). This creates an asymmetric edge—you're selling expensive premium while the underlying fundamentals remain stable.

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## Trade Details

SELL COP Feb 20 110/105 Put Spread
• Entry: Sell at $0.95 credit (mid of bid/ask)
• Risk: $405 | Reward: $95 (19% return)
• Breakeven: $104.05
• Max Loss: $405 if COP closes below $105 at expiration
• Max Profit: $95 if COP stays above $110 at expiration
• Days to Expiration: 9 days
• Win Rate: 68% (based on delta)

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## 📊 Term Structure & Volatility Analysis

This is your primary edge:
• Baseline 90-day Vol: 31.7%
• 7-day Clean IV: 18.2% (underpriced vs baseline)
• Current IV Rank: 100% (elevated overall, but near-term is cheap relative to longer-dated)
• Expected Daily Move: ±$2.77 (2.55%)
• Earnings Multiplier: 1.92x (moderate—market expects standard earnings volatility on May 14)

The Setup: While IV Rank at 100% suggests the market is pricing elevated uncertainty, the term structure shows a critical inefficiency. The 7-day and 12-day expirations are trading at 18.2% and 20.6% respectively—well below the 31.7% baseline. This indicates the market is underpricing near-term moves relative to historical norms. By selling the Feb 20 expiration, you're capturing this premium before it decays, with minimal exposure to the May 14 earnings event.

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## 📈 Greeks & Technical Analysis

• Net Delta: -0.32 (bearish bias, but limited downside risk in spread)
• Theta: +$12/day (strong time decay working in your favor)
• Vega: -$8 (benefits from IV contraction)
• RSI(14): 65.22 (neutral, not overbought—supports range-bound trading)
• Price vs 20-day MA: $108.58 vs $102.19 (6.3% above—healthy uptrend but not extended)
• Price vs 200-day MA: $108.58 vs $93.08 (bullish structure intact)
• MACD: 3.33 (Signal: 2.80) — Bullish, but momentum is moderating
• Put/Call Volume Ratio: 0.20 (very bullish—heavy call buying suggests upside bias)

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## 🎯 Why This Trade

Term Structure Edge: The 7-day Clean IV of 18.2% is 13.5% below baseline volatility, creating a statistical edge for premium sellers. You're selling options that the market has underpriced relative to historical volatility norms.

Technical Confirmation: COP's RSI at 65.22 is neutral (not overbought), and the stock trades 6.3% above its 20-day MA—indicating a healthy uptrend without excessive extension. The MACD remains bullish but is moderating, suggesting consolidation rather than collapse. Support sits at the 50-day MA ($97.33), providing a comfortable cushion below your short strike.

Fundamental Stability: ConocoPhillips just reported Q4 earnings on February 5 (EPS $1.02 vs. $1.23 expected), so near-term event risk is minimal. Management reaffirmed 2026 production guidance of 2.33-2.36 MMBOED and maintained the $0.84 quarterly dividend. The planned $1B cost reduction and 20-25% workforce reduction target efficiency improvements, supporting cash generation. Next earnings isn't until May 14—well beyond your 9-day expiration.

Sector Dynamics: Oil prices have rallied on geopolitical turmoil in Venezuela and Iran, benefiting COP. Analyst price targets range from $120-$137, with UBS raising its target to $130 (from $120). This bullish backdrop supports the stock staying above $105 through Feb 20.

Volatility Advantage: Current IV of 40.5% is elevated vs. historical 19.3%, but the near-term expirations are underpriced. You're selling premium that will decay rapidly over 9 days, with theta working at $12/day in your favor.

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## 📊 Pro Analysis Summary

• IV Rank: 100% (high overall, but near-term underpriced)
• Expected Daily Move: ±$2.77 (your spread width is $500, providing 180x margin of safety)
• Put/Call Volume Ratio: 0.20 (bullish sentiment—calls heavily favored)
• Market Maker Max Pain: $115 (suggests institutional positioning for upside)
• Technical Setup: Price above 20MA and 50MA, MACD bullish but moderating, RSI neutral
• Dividend: $0.84 ex-date Feb 18 (one day before expiration—minimal impact)

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## 💡 Trade Management

• Entry: Place limit order to SELL at $0.95 credit (collect immediately)
• Target: Close at $0.30 (68% profit) around Feb 18
• Stop Loss: Exit if COP breaks below $103 (reassess if support fails)
• Time Stop: Close 2 days before expiration (Feb 18) to avoid gamma risk
• Dividend Adjustment: Ex-date is Feb 18; monitor for any assignment implications

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## 🔍 Market Overview

The energy sector is rallying on geopolitical tensions in Venezuela an