P1 Trade Alert — Closing the Crude Oil Trade & Watch the VIX
A Note From Tony — Putting Capital to Work Today
Back on June 26, in a live Office Hours session, we put on a small, defined-risk bullish bet on crude oil — one contract, about $1,120 of defined risk (~0.1% of the $1.09M book), a teaching-sized position. It was a short put vertical betting oil would hold up.
This morning we closed it for a +$600 winner. The catalyst that got us paid is the same one now flashing on every screen: Middle East tensions have flared back up — the Iran ceasefire collapsed and there were tanker attacks in the Strait of Hormuz — and oil spiked (WTI ~$70.45 and rising sharply). Our thesis played out. But a war-premium oil move is a two-way, headline-driven binary, so the disciplined play is to bank the win and step aside, not press it.
Market Intelligence
Big picture: A geopolitical risk-off session — the Iran ceasefire collapse and Strait of Hormuz tanker attacks spiked oil and pressured equities (Dow −1%), while hawkish June FOMC minutes pushed the 10Y to ~4.50%. Live scanner: SPY $743.97 · QQQ $707.94 · /MES 7,516 · GLD $373.30 · WTI ~$70.45.
Oil / the catalyst: WTI ~$70.45 and rising, Brent ~$74–78 — driven by Hormuz supply fears. Trump declared the US–Iran MOU “over”; Iran struck 3 vessels near the Strait, the US retaliated on 80+ targets and revoked Iran’s oil-export authorization. Energy led the market (XOM +3.9%, CVX +3.5%, COP +2.2%). This is precisely the supply shock that paid off our bullish spread.
Why we’re not pressing it: a war premium is the definition of a two-way binary — the same headline flow that spiked crude can unwind it in an afternoon on a de-escalation. Taking a defined-risk winner off the table beats holding a directional oil bet hostage to the news cycle.
Rates & Fed: hawkish minutes — year-end PCE raised to 3.6%, nine officials see ≥1 hike, only ~20% odds of any 2026 cut. 10Y ~4.50%. Risk-off but not a growth scare (credit calm, bond vol falling).
Volatility: VIX popped (~16–19, sources disagree) off a complacent base, futures still in contango — a mean-reversion-prone spike, not a regime change.
A Note From Tony — Putting Capital to Work Today
Here’s how I’m personally reading today’s tape. The market is down — but considering the circumstances (a Middle East flare-up, hawkish Fed minutes, oil spiking), it’s really not down much. It’s holding up well. So a couple of thoughts on deploying capital, depending on where you sit:
• If you’ve got tons of free capital / dry powder: you could think about adding a little short-put exposure here — a bit of SPY or QQQ — but keep it small. Very small. Nibble, don’t gorge.
• If you’re already ~25–30%+ of your capital allocated: it may be wiser to sit tight and see how the day develops. If this drifts lower, there could be a bigger, better opportunity coming soon — and you’ll want the dry powder to take it.
Patience and dry powder are positions too. This is just how I’m weighing it for our own book — not a recommendation. Size everything to your own account and risk tolerance.
