How Are Options Traders Reacting to Berkshire's Latest Buy?

Core Viewpoint - Occidental Petroleum Corp is experiencing significant market volatility following Berkshire Hathaway's $9.7 billion acquisition of its chemical business, OxyChem, which has impacted its stock performance and investor sentiment [1]. Group 1: Stock Performance - OXY shares are currently trading down 6.2% at $44.77, reversing earlier gains and testing the 80-day moving average [2]. - The stock has declined 9.5% in 2025 and 16.4% year over year, with a risk of breaching a channel of higher highs established since its three-year low of $34.78 on April 9 [2]. - Short-term traders are exhibiting bearish sentiment, as indicated by a Schaeffer's put/call open interest ratio (SOIR) of 1.18, which is in the 96th percentile of the past 12 months [2]. Group 2: Options Activity - The current options market shows a preference for calls, with 118,000 options traded, of which 82,000 are calls, representing five times the average intraday volume [3]. - The most popular contract is the weekly 10/3 46-strike, where new positions are being opened [3]. Group 3: Volatility and Strategy - The premium for options is currently affordably priced, with a Schaeffer's Volatility Index (SVI) of 33% ranking in the 12th percentile of its annual range [4]. - A premium-selling strategy may be advantageous moving forward, as OXY's Schaeffer's Volatility Scorecard (SVS) is at 19 out of 100, indicating that the stock has consistently realized lower volatility than what its options have priced in [4].