Core Options Basics 1. Call OptionA call option gives the buyer the right, but not the obligation, to buy a stock at a specific price before a certain date. Traders buy calls when they believe the price of the underlying asset will rise. 2. Put Option A put option gives the buyer the right, but not the obligation, to sell a stock at a specific price before expiration. Traders buy puts when they believe the stock price will fall. 3. Strike Price The strike price is the predetermined price at which the stock can be bought or sold when exercising an option. It is the most important reference price in an options contract. 4. Expiration Date The expiration date is the last day the option contract is valid. After this date, the option becomes worthless if it has not been exercised or sold. 5. Premium The premium is the price paid to buy an options contract. This is the maximum amount the buyer can lose on the trade. Option Pricing & Value 6. Intrinsic Value Intrinsic value is the real value an option has if exercised immediately. It is the difference between the stock price and the strike price when the option is in-the-money. 7. Extrinsic Value (Time Value)Extrinsic value is the portion of the option price based on time remaining and volatility. It represents the possibility that the option may become profitable before expiration. 8. In-The-Money (ITM)An option is in-the-money when exercising it would produce a profit. For calls this means the stock price is above the strike, and for puts it means the stock price is below the strike. 9. At-The-Money (ATM)An option is at-the-money when the strike price is roughly equal to the current stock price. These options usually have the most time value. 10. Out-Of-The-Money (OTM)An option is out-of-the-money when exercising it would not be profitable. These contracts have no intrinsic value but may still have time value. Greeks (Risk Measurements) 11. DeltaDelta measures how much the option price changes for every $1 move in the stock. It also represents the approximate probability of the option expiring in the money.

WTI Crude Oil Rallies to $81 — Why Our Oil Options Strategy Stayed Patient WTI crude oil opened the session at $76.15 and closed strong at $81.01, a solid move higher of nearly $5 per barrel in a single session. For many traders, a move like this might feel like something you should chase. But disciplined oil traders understand something important: Not every market move should change your strategy. In this case, the trading account remains steady at $7,200, up from $6,400, and the current strategy remains unchanged until WTI pulls back into the $70 range. Why? Because professional traders often wait for better entry zones, not emotional breakouts. Oil Market Context: Why This Move Matters Crude oil volatility often creates sharp short-term rallies, especially when markets react to macro factors like: • supply expectations• geopolitical tensions• dollar strength• equity market weakness Even though oil rallied to $81, the broader financial markets showed weakness with the Dow Jones Industrial Average selling off during the session. This divergence between oil and equities can signal short-term volatility ahead, which is why disciplined traders avoid overreacting to a single price move. Why the Account Value Didn’t Change One of the biggest lessons for new traders: Account value only changes when positions change. Since the strategy is waiting for WTI to return to the $70s, no new crude oil options trades were triggered. That patience is intentional. Professional traders often let the market come to their price levels, rather than chasing price after a rally. Stock Watch: ORLA Pullback Creates Opportunity Another market development came from Orla Mining Ltd., which closed at $18.20, roughly 9% lower on the day. Interestingly, this drop happened even after Gold briefly pushed to $5,000 before selling off. This kind of pullback can create opportunity. The plan once a buy signal appears is to: 1️⃣ Purchase shares of ORLA2️⃣ Immediately Sell To Open an in-the-money put option

WTI opened at $76.15 and closed at $81.01. This move had no bearing on the account value that stands at $7,200 up from 6,400. The account will maintain this balance until WTI drops into the 70s. The Dow Jones sold off for the day and our basket of stocks reflects that.ORLA closed at $18.20 which is a 9% move down. Gold hit $5,000 yesterday and sold off today. When we get a buy signal our first purchase will be ORLA and we will immediately Sell To Open an in-the-money put to initiate our position in ORLA. This strategy is easier to understand once the trade is made. Stay tuned.

Why This Matters for Your Trading Today The market is currently wrestling with a "de facto" closure of the Strait of Hormuz following U.S. strikes in Iran. For an options trader, the implied volatility (IV) is likely through the roof. Here is the breakdown of the current environment: • Vertical Price Action: WTI has rocketed nearly 30% this year, currently settling around $75–$78/bbl, while Brent is gapping higher toward $85/bbl. • The OPEC+ Factor: Over the weekend (March 1), OPEC+ agreed to a modest output increase of 206,000 bpd for April. However, analysts like Helima Croft (RBC) are calling this a "moot point" because if the oil can’t transit the Strait, the production numbers don't matter. • Inventory vs. Sentiment: Interestingly, the EIA reported a 3.5 million barrel build in U.S. crude inventories. In a "peace-time" market, this would be bearish; today, it’s being ignored as the market focuses entirely on the supply-side shock from the Middle East. • The "Tail Risk": Major banks like UBS and Barclays are now modeling for $100+ oil if the Hormuz blockade persists. Trader's Note If you're looking at the Greeks today, keep an eye on the skew. Call demand is likely aggressive as hedgers scramble to cover upside risk. The "soft landing" narrative for the broader economy is under direct threat from this energy-driven inflation spike.https://markets.financialcontent.com/stocks/article/marketminute-2026-3-5-geopolitical-firestorm-middle-east-conflict-sends-oil-surging-7-clouding-feds-path-and-spooking-markets

This article explains the basics of crude oil futures and options. It shows how traders agree on a future price for oil contracts and then trade those contracts before expiration, profiting from price changes. LINK TO ARTICLE CLICK