Argus

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Mar 12, 2026

Intermediate Term

Long Term

Summary

The oil markets had a relatively calm day on Wednesday, despite ominous headlines out of the Middle East. Light Sweet Crude (WTI) rose over 5% to $88/barrel near the close, while Brent also gained over 5% and was trading at $92.70 late in the session. These levels are near recent closing highs. Despite the decline in volatility, the CBOE Crude Oil Volatility Index (OVX) rose to another record (ex. the pandemic) near 121%.      The OVX is based on call and put option prices of the United States Oil Fund (USO, $108). To demonstrate the lunacy in this options market, the at-the-money April 17 $108 USO call options are trading at $15.50/contract, while the same put option is at $15.40/contract. These contracts expire in 26 trade days. That means that if you buy the call option, USO needs to rally to at least $123.50 by expiration just to break even over the next 26 days. If you buy the put option, USO would have to close at $92.60 or lower at expiration to break even. Because premiums are so elevated, it would be much more advisable to either sell way out of the money call options or way out of the money put options. Selling premium in times of panic can be lucrative.   Stock mar

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