My Trades

Are Sky-High Oil Prices an Opportunity? Here's My $17,650 Bet.

By Brandon Bitar · October 17, 2026 · 6 min read

Nobody is a fan of these oil prices. Not politicians, not drivers at the pump, not any country. But when life hands the whole world lemons, it's worth asking: is there a way to make some lemonade?

Since the war with Iran began, USO, the fund that tracks the price of oil, has more than doubled. It went to such an extreme, so fast, that I can't help but see an opportunity for when prices come back down.

USO, the last five years

Oil more than doubled after the war began: about $75 to $162

Iran war begins
late Feb 2026

4 years mostly between $60 and $90

← Swipe to see earlier years

USO (United States Oil Fund), 5-year price chart. Data: Nasdaq real-time price, October 2026.

My simple thesis

When prices climb this far, this fast, they eventually come back down. Oil has done it before. In 2008 it hit $147 a barrel in July and was below $40 by December. In 2022, after Russia invaded Ukraine, it spiked above $120 and gave most of it back within months. You can see that 2022 bump on the chart above.

Two things make me believe it can happen again:

• A resolution. At some point, some kind of deal or de-escalation gets worked out, and the war premium comes out of the price.
• Demand destruction. Prices this high aren't sustainable. When oil gets too expensive, people drive less, businesses cut back, and buyers find substitutes. Lower demand eventually pulls prices down on its own.

The real question for investors isn't if. It's when. And because I don't know when, I need to give my thesis time to play out.

What I bought: a conservative bear put spread

If you're not familiar with options, that's okay. A bear put spread is a way to profit if a stock or fund goes down, with a worst case you know in advance. It has two parts:

• I buy a put option, which gains value as USO falls below its strike price.
• I sell a put option at a lower strike price. That caps how much I can make, but it also lowers what I pay.

The result: I pay a fixed amount up front, and that amount is the most I can ever lose, no matter how high oil goes. I chose long expiration dates, September 2027 and January 2028, so the trade has time to work.

Here's the actual position in my Schwab account. Each pair of lines (one bought, one sold) is one spread.

Swipe to see all columns →

My USO position as of October 17, 2026, with USO at $161.76.

What USO needs to do

Not much. My break-even is USO at about $153, which is still an incredibly high price. For most of the time since the war began, USO has traded well below that. To earn the full return, USO just needs to be at $140 or lower by my expiration dates. That's still nearly double where it was before the war.

To be clear about the trade-off: this one needs oil to come down. If USO simply stays where it is, the position loses money. That's the bet I'm making, and the table shows exactly what it costs me if I'm wrong.

Why I didn't just short oil

The traditional way to bet against something is to short it: borrow shares, sell them, and hope to buy them back cheaper. The problem is that a short position has no ceiling on losses. In a war, oil can spike on a single headline.

Why I kept it conservative

If I wanted an even bigger return, I could have picked lower strikes, like $130. I honestly think USO could fall back below $100 once there's a resolution. But I'm a conservative investor. I would rather set up a trade where oil only has to come down a little for me to earn a great return than swing for the fences and need everything to go right.

I'm in bigger than this

The trade above is the cleanest one to walk through, but it isn't my whole oil position. I also have a second, larger set of put spreads on USO, expiring January, June and December 2028:

Swipe to see all columns →

My second USO position as of October 17, 2026.

My plan if oil keeps climbing

If USO gets into the $170s, I'll add to the position. If it climbs into the $180s, I'll add more. Higher prices only make the setup more attractive to me. But I've set a hard limit: the most I'm willing to put into this idea is $40,000. I've already committed about $17,650, so I have roughly $22,350 left to add if oil keeps climbing. Deciding that number ahead of time is what keeps a good idea from turning into an emotional one.

Where it stands today

As of this writing, both positions together are worth about $14,560, down roughly $3,100 (18%) from what I paid, because oil has kept rising. That's okay. I have about a year before the first spreads expire, and I already know my worst case. I don't have to guess when the war ends. I just have to be patient.