Can you make a profit from both the sharp rise and fall of oil prices? The options market uses high volatility to create a "win-win" situation for both offense and defense.

President Trump announced the re-sealing of the Strait of Hormuz, causing international oil prices to jump on Monday. Previously, the US and Iran had just completed a new round of mutual attacks over the weekend. The volatility triggered by the sudden escalation of geopolitical tensions is creating unique trading opportunities in the options market. The best ETF for tracking crude oil prices, the United States Oil Fund (USO), provides stock options traders with a liquid and low-threshold investment tool, avoiding the complexity of direct participation in the futures market. Although the uncertainty of the Persian Gulf situation has temporarily pushed up volatility, in the medium to long term, crude oil also faces upward resistance structurally, creating an ideal environment for option sellers to capitalize on high option premium prices. Building a "hard floor" with strategic oil reserves, while high production and weak demand form a "ceiling" From below, the ongoing conflicts in the Middle East have continued to disrupt the global oil supply chain and distort transportation routes, providing structural support for oil prices. Adding insult to injury is the current state of the US Strategic Petroleum Reserve (SPR) - after the Biden administration released a large amount of oil from the SPR to stabilize oil prices before the 2022 midterm elections, the SPR is now at a multi-decade low; the Trump administration's efforts to hedge against the supply gap caused by the blockade of the Persian Gulf by Iran have further depleted the reserve inventory. Now, the US government fundamentally needs to replenish reserves rather than continue to deplete them, turning the SPR from a political tool for price suppression into an important cushion for a significant drop in oil prices. On the other hand, upward pressure on oil prices also faces resistance - US crude oil production continues to hit historical records, becoming a huge structural force against OPEC+ production cuts. Looking further into the future, the gradual return of Venezuelan supplies is expected to add additional barrels to global supply-demand balance in the coming years. On the demand side, global long-term trends towards alternative energy are continuing to erode long-term demand prospects, fundamentally altering global consumption expectations. In the context of range-bound volatility, option sellers welcome the "golden window" In other words, oil prices may remain range-bound for quite some time, which is highly advantageous for selling options strategies. Under the double squeeze of the strategic reserve floor and ample supply ceiling, oil prices fall into a range-bound volatility, while implied volatility has significantly exceeded historical averages. In an environment of expanding option premiums, this provides an excellent opportunity for selling out-of-the-money put options (cash-secured put) to profit from downward movements. Selling out-of-the-money put options allows traders to capitalize on high implied volatility while avoiding the upward risk of bullish option spread strategies, especially in the background where the structural supply ceiling makes it difficult for oil prices to rise uncontrollably. By selling off market-overpriced downside insurance, traders can collect option premiums and accelerate profits through time decay (theta) over the next two months. Taking USO as an example, a specific operation can target an exercise price of around 30 delta, with an expiration date set at around 45 to 60 days. This exercise price is far below the current market price, deeply embedded within the safety margin built by the depletion of the SPR and geopolitical supply constraints. If USO remains range-bound or gradually rises over the next 6 to 8 weeks, the put options will quickly depreciate, allowing traders to buy back for a low price for closure, or hold until expiration to let it expire worthless, maximizing profits. Even if a temporary slowdown in the macro economy temporarily drags down oil prices, the high premium received will effectively lower the breakeven point, putting traders in a favorable position - they can protect their positions and also have the opportunity to buy USO shares at a significant discount. For example, investors can sell put options on USO with a strike price of $100 expiring on the week of August 28, with a quoted premium of $2.40. Calculated on an annual basis, the return can reach over 18%, or equivalent to buying USO at a 10% discount. If eventually exercised (i.e., being assigned ETF shares after selling puts), as long as the implied volatility remains above average, traders can continue to roll over by selling covered calls on the position to continuously lower effective holding costs. In summary: if USO remains flat, you can earn the entire premium; if USO rises, you still keep the premium; even if USO falls, as long as the decline does not exceed the premium received (i.e., falls below $97.60), you can still profit. This is a "win-win-win" trade that offers profit opportunities regardless of whether oil prices rise, fall, or remain flat.