Target Acquired: RTX Call Options Launch Quick Returns

On Feb. 25, our Unusual Activity Service identified significant bullish call buying, with 2,500 17April 220 calls bought for $1.80 below the existing open interest of 5,517 contracts, with RTX shares trading at $193.78. The trade added to unusual activity logged on February 24th.

Those 17April 220 calls traded as high as $7.25 today with the stock at $210.94, delivering impressive returns of approximately 302.78% from the entry price of $1.80. Meanwhile, RTX shares gained approximately 8.86% from the initial trading level of $193.78, demonstrating how options can deliver dramatically amplified returns compared to simply owning the underlying stock.

This performance illustrates the power of options leverage when the directional thesis proves correct, though it’s important to note that this same leverage can work against traders when market moves go in the opposite direction.

Weekend Iran Strikes Validate Defense Investment Thesis

The timing of the February 25th call buying proved remarkably prescient, as just three days later the United States and Israel launched Operation Epic Fury—a massive coordinated military campaign against Iran that began on Saturday, February 28th. The strikes, which killed Iranian Supreme Leader Ali Khamenei and at least 40 senior Iranian officials, represent the most significant escalation in the Middle East since the 1979 Islamic Revolution.

Israel’s air force dropped more than 1,200 munitions across 24 of Iran’s 31 provinces over the weekend, dismantling Iran’s aerial defense systems in western and central Iran. The scale of the operation has triggered unprecedented demand for the very missile systems RTX announced expanded production for on February 25th—the same day as the unusual call buying activity.

Iran responded by launching waves of retaliatory strikes on Israel and U.S. military facilities across the Middle East, targeting bases in Kuwait, Bahrain, Qatar, UAE, and Iraq. Four U.S. service members have been killed in action, with Iranian missiles striking the headquarters of the U.S. Navy’s 5th Fleet in Bahrain and multiple other coalition facilities. The IRGC claimed it struck 27 bases where U.S. troops are deployed, creating urgent demand for missile defense replenishment.

RTX Munitions at Center of Historic Operation

The weekend’s military operations showcase RTX’s critical role in U.S. defense capabilities. The company’s SM-3 and SM-6 missiles are providing ballistic missile defense for naval vessels operating in the Persian Gulf, while Patriot systems are defending ground facilities across the region. Tomahawk cruise missiles launched from ships and submarines struck high-value targets deep inside Iran from over 1,000 miles away.

The combat consumption of these systems validates the $115 million expansion RTX announced on February 25th for its Alabama facility where SM-3 and SM-6 missiles are assembled. With Iran’s retaliatory strikes ongoing and the conflict spreading to include Hezbollah attacks on Israel, the Pentagon faces urgent pressure to rapidly replenish depleted stockpiles—exactly the scenario RTX positioned for with its production capacity announcements.

RTX President Phil Jasper’s February 25th statement that the expansion “will help us meet the growing needs of our military customers and service members” now appears prophetic. The SM-6, which serves as the U.S. Navy’s only over-the-horizon offensive and defensive weapon, has proven critical in intercepting Iranian drone and missile attacks on coalition vessels in the confined waters of the Persian Gulf.

$2.6 Billion Capex Investment Addresses Urgent Capacity Constraints

The weekend’s events underscore the strategic foresight behind RTX’s $2.6 billion capital expenditure investment made in 2025 to expand munitions production capacity. The company secured a new U.S. source of rocket motors for the AMRAAM missile through a partnership with NAMMO’s Perry, Florida facility, which will become operational in 2027. Similarly, Raytheon is investing in Tomahawk cruise missile production facilities in Tucson, Arizona—missiles that have been used extensively in the opening days of Operation Epic Fury.

With major combat operations continuing into their third day and President Trump confirming that operations will persist “until the enemy is decisively defeated,” defense analysts expect massive supplemental appropriations from Congress to replenish munitions stockpiles. RTX’s expanded production capacity positions the company to capture the majority of this surge demand, as its munitions systems represent the backbone of U.S. air and missile defense architecture.

The Strait of Hormuz—through which 21% of global petroleum passes—remains closed for a third day due to Iranian threats, with German shipping giant Hapag-Lloyd suspending all vessel transit. This disruption has triggered calls for sustained U.S. military presence in the region, further increasing long-term demand for RTX’s naval defense systems.

The convergence of the February 25th munitions production announcement, the February 28th launch of Operation Epic Fury, ongoing Iranian retaliatory strikes, and urgent stockpile replenishment requirements created ideal conditions for the April 17th call options to capture extraordinary upside. The timing of the call buying on February 25th at 10:25 AM—just 72 hours before the largest U.S. military operation against Iran in history—demonstrates the exceptional nature of the unusual options activity that positioned traders ahead of one of the most significant defense industry catalysts in decades.

RTX was last up 3.68% at $210.00.