In Today’s Masters in Trading: Live Crude oil is flashing alarm signals as we head into the weekend. The catalyst? Iran’s strategic chokepoint – the Strait of Hormuz. This strait is responsible for moving roughly ~20 million barrels per day (or nearly 20% of global petroleum consumption). Right now, the strait is at the center of a fresh round of tensions between Iran, the U.S., and Russia. On February 3rd, IRGC gunboats attempted to seize a U.S. tanker from the Strait of Hormuz. Not long after, an American F35 shot down an Iranian drone near the U.S.S. Abraham Lincoln. That gradual tit-for-tat has given way to more transparently hostile moves between the U.S., Iran, and Russia Iran and Russia have now partially closed off the strait for a series of “live fire” military drills. President Trump responded by giving Iran 10 to 15 days to reach a deal – or face “really bad things.” These moves are only fueling tensions as we head into the weekend. And all that escalating rhetoric is currently pushing crude to six-month highs (WTI ~$66, Brent ~$71). But price isn’t the story here. Volatility is. The CVOL index is pressing near multi-year highs. That’s broad implied volatility rising across the curve — not just front-week panic. Translation: overall fear is increasing. Calls are pricing richer than puts. That’s upside protection in demand. And that means one thing… Institutional traders are hedging for a supply shock – not a demand collapse. Right now, the market is explicitly pricing the risk of a weekend escalation — a Strait disruption, a retaliatory strike, or new sanctions from here. If tensions cool, volatility could likely compress quickly. If headlines escalate, front-end crude could gap hard and accelerate volatility. We don’t know exactly what will happen from here. But we do have institutional signals to guide us. And they’re showing us exactly how we can get in position whatever direction the story breaks from here. Whether we’re playing the upside or piling into puts, we have strategies here at Masters in Trading to benefit from this tense moment. Because when CVOL, skew, and convexity all align, the market is telling you one thing very clearly. The risk isn’t priced in the headlines yet – and that market lag is exactly where opportunity lives here at Masters in Trading. So join me for today’s episode of Masters in Trading LIVE at 11AM EST, where I’ll walk you through the dynamics behind crude oil volatility. I’ll show you the specific outcomes markets are pricing in – and the key trade setups I’m eyeing from here. One more thing… Today is expiration Friday for many of us. And as regular viewers know, an expiration pile-on in the broader market can create serious pin risk for any trader. It’s that nerve-wracking moment when stock prices hover dangerously close to strike prices, leaving option holders in limbo. Will your options be exercised? Will you face unexpected assignment? I’ve talked extensively about how pin risk moves markets in the past – and how it sets up the market’s expectations for each successive financial quarter. Today, I highly encourage Masters in Trading viewers to check out this short video primer all about the dangers of pin risk – and the key strategies we can use to manage our risk on any open options trade. You can watch the full breakdown here. 
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