ExxonMobil (NYSE: XOM) is catching the attention of investors and analysts, with many predicting strong gains for the oil giant. While experts see an upside in the stock’s price, another profitable opportunity is emerging in the options market—shorting puts, which offers high yields due to increased volatility.
Analysts Expect ExxonMobil to Climb Higher
As of March 10, 2025, ExxonMobil is trading at around $109.02 per share. According to market research firm MarketBeat, analysts are generally optimistic about the stock’s future. Out of 22 analysts, most have rated it as a “Moderate Buy,” with an average 12-month price target of $129.25—an 18.5% increase from its current price.
Some analysts are even more bullish, setting price targets as high as $147.00, while the lowest estimate remains at $105.00. This suggests that, even in a conservative scenario, ExxonMobil is likely to maintain stability.
Shorting Puts: A High-Yield Strategy in a Volatile Market
For investors looking beyond traditional stock buying, the options market presents an intriguing opportunity. ExxonMobil’s implied volatility currently stands at 28.6%, the highest in a year. This means that selling (or shorting) put options could generate significant income through premiums.
For instance, traders can sell an April 17 put option with a $100 strike price and an April 17 call option with a $115 strike price. This setup, known as a short strangle, could yield a total premium of $265. As long as ExxonMobil’s stock price remains between $97.35 and $117.65 by the expiration date, investors can pocket the premium.
However, this strategy comes with risks. If ExxonMobil’s stock moves beyond these limits, traders may face substantial losses. Unlike simply buying stock, shorting puts exposes investors to greater downside risks if the market moves unfavorably.
What Investors Should Consider
Before diving into ExxonMobil’s stock or its options market, investors should weigh the following factors:
- Market Volatility: While high implied volatility means better premiums for option sellers, it also signals greater potential price swings.
- Analyst Projections: Though analysts predict growth, their price targets vary, meaning ExxonMobil’s future isn’t entirely certain.
- Risk Tolerance: Shorting puts can be highly profitable, but it also requires a strong understanding of options trading and the ability to handle potential losses.
Bottom Line
ExxonMobil presents multiple opportunities for investors. If analyst predictions hold, the stock price could rise significantly over the next year. At the same time, high implied volatility in the options market creates potential for short-term traders to generate returns through shorting puts.
Whether you’re a long-term investor or an active trader, ExxonMobil remains a stock worth watching. As always, do your research and consider consulting a financial expert before making any major investment moves.
