To The Moon

Heavy Oracle Put Buying Flags Downside Risk Amid Software Selloff, Lawsuit Risk

On Wednesday, U.S. software stocks broadly weakened, with $Oracle(ORCL)$   shares falling more than 5% intraday. Beyond news that the company has been sued by a creditor, an unusual options trade suggests institutional investors are proactively pricing in downside risk for Oracle over the coming weeks.

Heavy Put Buying Signals Institutional Short-Term Bearish Positioning

Options data show significant activity in ORCL's February 13, 2026 $160 put, where nearly 10,000 contracts traded in a single session while open interest previously stood at only single digits. The volume-to-open-interest ratio (V/OI) exceeded 100, strongly indicating the position was newly established. The trade executed at the ask, reflecting active participation by buyers even as the stock sold off.

From a structural perspective, the put remains meaningfully out of the money relative to Oracle's current share price, suggesting institutions are not betting on an immediate sharp decline. Instead, the positioning points to heightened concern over uncertainty in the coming weeks. Option Greeks also show limited directional sensitivity, with the trade more focused on volatility and event risk pricing rather than a purely directional bet, consistent with a short-term risk hedging strategy rather than an emotional reaction.

Software Sector Weakness and Lawsuit News Amplify Near-Term Pressure

Oracle's decline unfolded alongside broad losses across the software sector. $AppLovin Corporation(APP)$   shares fell more than 10%, $Shopify(SHOP)$   dropped around 8%, and $Palantir Technologies Inc.(PLTR)$   declined over 2%, underscoring a sector-wide risk-off move rather than an isolated, company-specific selloff. Recently, investor sentiment toward software stocks has weakened as markets reassess the potential impact of AI on traditional subscription-based business models and long-term growth visibility. At the same time, capital has been rotating toward semiconductors, computing power, and other AI infrastructure plays.

Against this backdrop, news that Oracle is facing a creditor lawsuit further amplified market caution, heightening concerns over legal risk and near-term uncertainty. While such developments may not materially alter Oracle's long-term fundamentals, they tend to accelerate short-term risk repricing when sector sentiment is already fragile.

Summary

Overall, the options activity indicates that institutions are positioning for short-term downside risk in Oracle amid a broader pullback in the software sector. With sector pressure persisting and company-specific uncertainty yet to be fully digested, near-term market expectations for Oracle remain cautious, and the stock is more likely to trade with a bearish bias. For investors, the signal points to limited upside in the near term, suggesting a focus on risk management rather than directional exposure until sector sentiment shows clearer signs of stabilization.

@TigerStars  @CaptainTiger  @TigerWire  @Daily_Discussion  @Tiger_chat  @Tiger_comments  @MillionaireTiger