Trade Alert: Fading Oil
A bearish bet on oil, as we anticipate the Iran war coming to an end soon. Plus, three bullish biotech and space setups.
War-Resolution, Biotech, And Space Setups
In yesterday’s trade alert, we argued that this war is still more likely to end in weeks than months.
What happened after that alert only reinforced the point. President Trump appeared Monday with Defense Secretary Pete Hegseth, CIA Director John Ratcliffe, and Gen. Dan Caine, chairman of the Joint Chiefs of Staff, and later showed up at the White House Easter Egg Roll.
Neither Trump nor his team seemed nervous about Trump’s Tuesday 8:00 p.m. Eastern deadline for Iran to reopen the Strait of Hormuz or face major U.S. strikes.
One reason may be that they still expect a deal. Another may be that they expect another deadline extension. But if you listened to how they described the rescue of the downed F-15 Weapons Systems Officer in Iran, a third possibility is they expect to decisively defeat Iran.
Trump’s Truth Social post from this morning suggests that as well.
The market may not have priced in that scenario yet.
Today’s Macro Trade
In light of that, we are adding a trade today predicated on a relatively fast end to the war: a bearish options trade on the United States Oil Fund (USO 0.00%↑). If the war ends soon, the Strait reopens, and the current oil shock begins to normalize, crude could give back a meaningful chunk of its war premium by summer.
The Other Trades
Beyond that macro trade, today’s alert also includes two biotech names from our Top Names list and one space name from our Market Watchers X list.
The biotech trades reflect our usual interest in names with strong upside potential over the next several months, when we can structure the options intelligently and define the risk. The space trade gives us exposure to a group that could get an additional tailwind from the upcoming SpaceX IPO and the renewed market enthusiasm that could come with it.
Price Discipline Still Applies
The tape is still messy, and volatility is still elevated. So the same rule still applies: we do not get rewarded for chasing. We either get filled at prices that make sense, or we move on.
Today’s Macro Trade
Oil normalization / postwar de-escalation theme
The instrument is the United States Oil Fund (USO 0.00%↑), and our trade is a combo consisting of these four legs:
Buying the Jul 17, 2026 $110 put,
Selling the Jul 17, 2026 $100 put,
Selling the Jul 17, 2026 $145 call, and
Buying the Jul 17, 2026 $150 call,
For a max net debit of $1.05. The max gain on 1 contract is $895, and the max loss is $605. This trade filled at $0.85.
Today’s First Top Names Trade
Biotech / recovery theme
The stock is Moderna (MRNA 0.00%↑), and our trade is a hybrid combo consisting of these four legs:
Buying the Aug 21, 2026 $55 call,
Selling the Jul 17, 2026 $60 call,
Selling the Jul 17, 2026 $42 put, and
Buying the Jul 17, 2026 $37 put,
For a max net debit of $1.30. The max gain on 1 contract is $711 (if the short call expires in-the-money; if it expires out-of-the-money, or we buy-to-close it before then, our upside will be uncapped), and the max loss is $630. This trade filled at $1.15.
Today’s Second Top Names Trade
Biotech / immunotherapy theme
The stock is Corvus Pharmaceuticals (CRVS 0.00%↑), and our trade is a combo consisting of these three legs:
Buying the Oct 16, 2026 $16 call,
Selling the Oct 16, 2026 $13 put, and
Buying the Oct 16, 2026 $10 put,
For a max net debit of $1.90. The max gain on 1 contract is unlimited, and the max loss is $490. This trade filled at $1.70.
Today’s Market Watchers Trade
Earth observation / geospatial intelligence theme
The stock is Planet Labs (PL 0.00%↑), and our trade is a hybrid combo consisting of these four legs:
Buying the Oct 16, 2026 $45 call,
Selling the Jul 17, 2026 $50 call,
Selling the Jul 17, 2026 $30 put, and
Buying the Jul 17, 2026 $25 put,
For a max net debit of $1.95. The max gain on 1 contract is $1,044 (if the short call expires in-the-money; if it expires out-of-the-money, or we buy-to-close it before then, our upside will be uncapped), and the max loss is $693. This trade filled at $1.45.
Unless otherwise indicated, all trades are day orders and will be canceled at the end of the day if they don’t fill.
Exiting These Trades
My plan:
United States Oil Fund (USO)
Put spread (legs 1 & 2): Open a GTC limit order to exit the put spread at a net credit of $8, and lower that price, if necessary, as we approach expiration.
Call spread (legs 3 & 4): Open a GTC limit order to exit the call spread at a net debit of $0.20, and raise that price if necessary as we approach expiration.
Moderna (MRNA)
Calls / calendar (legs 1 & 2): Open a GTC limit order to buy-to-close the short Jul 17th, 2026 $60 call at $0.20, and raise that price if necessary as we approach the July expiration. If the short July $60 call is in-the-money at expiration, I’ll sell the long Aug 21st, 2026 $55 call and use part of the proceeds to buy-to-close the short July call. If I buy-to-close the short call before expiration or it expires out-of-the-money, I’ll share a GTC limit sell price for the long August $55 call in the comments here and via chat/email.
Put spread (legs 3 & 4): Open a GTC limit order to exit the put spread at a net debit of $0.20, and raise that if necessary as we approach expiration.
Corvus Pharmaceuticals (CRVS)
Call (leg 1): I’ll plan on posting a GTC limit sell target for the October 16th, 2026 $16 call in the comments here and via chat/email in mid-August, after we’ve had two earnings reports behind us. If the stock spikes before then, I may do so earlier.
Put spread (legs 2 & 3): Open a GTC limit order to exit the put spread at a net debit of $0.20, and lower that price as we approach expiration.
Planet Labs (PL)
Calls / calendar (legs 1 & 2): Open a GTC limit order to buy-to-close the short Jul 17th, 2026 $50 call at $0.20, and raise that price if necessary as we approach the July expiration. If the short July $50 call is in-the-money at expiration, I’ll sell the long Oct 16th, 2026 $45 call and use part of the proceeds to buy-to-close the short July call. If I buy-to-close the short call before expiration or it expires out-of-the-money, I’ll share a GTC limit sell price for the long October $45 call in the comments here and via chat/email.
Put spread (legs 3 & 4): Open a GTC limit order to exit the put spread at a net debit of $0.20, and raise that if necessary as we approach expiration.
Out of the MRNA put spread yesterday at $0.20.
Looks like good timing on this one, so far, as USO is down about 11% afterhours, following news of the ceasefire in the Iran war.