ConocoPhillips Put Option Premiums Soar Amid Elevated Oil Prices

ConocoPhillips (COP) stock has surged due to elevated oil and gas prices, caused by the ongoing U.S.-Iran conflict. As a result, put option premiums have increased, making them attractive to short-sellers.

COP closed at $120.26 per share on July 24, up from its recent low of $103.22 on July 1. However, it's still down from its April 29 peak of $128.25. The company is expected to benefit from higher oil and gas prices, despite guiding for slightly lower production in Q2.

The implied volatility (IV) has risen to 36.58%, with put option prices increasing accordingly. Short-sellers can earn attractive yields by selling out-of-the-money (OTM) puts expiring on August 28. For example, the $111.00 strike price put provides a 1.8468% one-month yield.

The breakeven point for this trade is significantly below analysts' price targets. If COP falls to its strike price of $111.00, the potential upside is +26.8%, according to Yahoo! Finance's average price target of $140.84.