The P/C ratio of XLE has been rising continuously recently and has reached a relatively high range. There is a noticeable accumulation of open interest in Puts at lower strike prices below—smart money is systematically protecting long positions in energy, rather than establishing new short positions.
The IV Percentile of XOP is currently above 60%. The options chain shows that straddle pricing within two weeks implies a movement range of about ±7%, which is significantly higher than the average level over the past three months.
As an inverse crude oil ETF, SCO has seen increased trading volume recently, but there is no corresponding large-scale unusual options activity. It's more about retail investors chasing shorts rather than being institution-led.
The options chains for both BOIL and UNG show abnormal accumulation on the Call side. The smart money direction for natural gas is bullish, forming a divergence from the protective Puts for crude oil.
This divergence itself is a signal: the energy sector is splitting internally, with natural gas and crude oil moving in different directions. It's not advisable to simply take an overall long or short position.
