🐶 Options Puppy: Middle East Tension, Oil Rockets & Where I’m Selling Options
🐶 Options Puppy: Middle East Tension, Oil Rockets & Where I’m Selling Options
Global markets just got a fresh dose of geopolitical drama. The latest conflict between the US, Israel, and Iran has everyone watching one thing closely — oil prices. And whenever oil gets emotional, markets tend to behave like a hyperactive puppy chasing a tennis ball.
So instead of panicking, the Options Puppy approach is simple:
Find volatility → Sell options → Collect premium → Wag tail.
Let’s break it down.
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🐶 The Big Macro Bone: US Strikes Iran
The recent US strikes on Iran are unusual for two main reasons.
First, this looks like a potential regime-change style conflict, driven mainly by the US and Israel, without the usual strong support from European allies.
Second, there is no clear endgame strategy yet. The official reason is to stop Iran from developing nuclear weapons, but the broader geopolitical objective remains uncertain.
Whenever a conflict lacks a clear resolution path, markets hate it.
And nervous markets create volatility — which option sellers love.
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🛢 Why Oil Is the Main Character
Iran may not be the largest producer in the world, but it is still significant.
Iran produces roughly 3% of global oil supply and is the fourth largest producer within OPEC (Organization of the Petroleum Exporting Countries).
The real risk is not production itself — it is geography.
If tensions escalate around the Strait of Hormuz, a major global shipping route, oil supply could be disrupted.
Roughly 20% of the world’s oil passes through that narrow strait.
In a worst-case scenario where it becomes blocked, analysts estimate crude oil could surge to $100–$150 per barrel.
That creates three big market problems:
1️⃣ Oil price shock
2️⃣ Inflation spikes again
3️⃣ Interest rate cuts get delayed
Which means central banks like the Federal Reserve would struggle to cut rates.
High oil + high interest rates = slower global growth.
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🐶 What Investors Usually Do
Whenever geopolitical stress rises, investors behave very predictably.
Money flows into safe havens.
Two usual winners:
• US Treasuries
• Gold
Gold especially tends to shine during geopolitical uncertainty. That’s why many strategists remain bullish on the yellow metal.
If the crisis drags on, the bullish case for Gold gets even stronger.
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🐶 But Options Puppies Don’t Just Hide
Instead of hiding under the table, Options Puppies sniff for premium.
High volatility means juicy options pricing.
Oil-related ETFs suddenly become excellent places to sell options.
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🛢 US Oil & Gas ETFs Perfect for Selling Options
Here are some liquid ETFs with active options markets.
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🛢 1. Energy Select Sector SPDR Fund
This is the largest energy ETF in the US.
Top holdings include giants like:
• ExxonMobil
• Chevron
Why Options Puppies love it:
• Very liquid options
• Tight bid-ask spreads
• Moves nicely when oil spikes
Strategy idea:
🐶 Sell Cash Secured Put
Example idea:
Strike: 5–10% below market
Expiry: 30–45 days
Goal:
Either collect premium or get assigned energy stocks cheaper.
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🛢 2. United States Oil Fund
This ETF tracks WTI crude oil futures.
It moves almost directly with oil prices, so volatility can spike during geopolitical news.
Strategy idea:
🐶 Sell Covered Calls
If oil rallies quickly, you can:
• collect premium
• cap upside at a comfortable level
Perfect for short-term geopolitical trades.
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🛢 3. VanEck Oil Services ETF
This ETF tracks oil service companies like drilling and equipment providers.
It tends to move more aggressively than oil producers.
Why?
When oil prices rise, oil companies increase drilling budgets.
That benefits service firms.
Which means higher volatility = bigger option premiums.
Strategy idea:
🐶 Sell Put Spread
Good if you think oil will stay strong but want limited risk.
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🇸🇬 Singapore Play: Keppel Corp
For Singapore investors like us, a nice local energy-transition play is:
⚓ Keppel Ltd
Keppel used to be famous mainly for offshore oil rigs.
Today it has transformed into a diversified company focusing on:
• Infrastructure
• Energy transition
• Data centres
• Asset management
Even though its offshore & marine legacy came from oil, the company now benefits from global energy investment trends.
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🐶 Options Puppy Strategy for Keppel
Since Singapore options markets are smaller, we usually do:
Covered Call Strategy
Example idea:
Buy or hold Keppel shares.
Sell call options slightly above market price.
Outcome possibilities:
1️⃣ Price stays flat → keep premium
2️⃣ Price rises slightly → profit + premium
3️⃣ Price rockets → shares get called away at profit
Either way the puppy collects treats.
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🐶 CIO’s Big Picture (And Why It Matters)
Most institutional investors currently maintain this stance:
Equities: Neutral
Bonds: Overweight
Gold: Overweight
Cash: Underweight
The idea is simple:
Stay invested but prepare for volatility.
And volatility is exactly where options strategies shine.
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🐶 Final Thoughts from the Options Puppy
Geopolitical crises always create uncertainty.
But they also create opportunity.
Instead of reacting emotionally:
• Sell options when volatility spikes
• Focus on liquid ETFs
• Collect premium consistently
My current watchlist for options selling:
🛢 Oil ETFs
• XLE
• USO
• OIH
⚓ Singapore Energy Transition
• Keppel
As always, the Options Puppy motto:
“Don’t chase the market. Let the premium come to you.” 🐶
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