---
title: 'How to Sell Crude Oil in the Middle of a War, With Defined Risk'
source: 'https://youtube.com/watch?v=PThHoPkgp0g'
video_id: 'PThHoPkgp0g'
date: 2026-08-07
duration_sec: 235
channel: 'tastylive'
---

# How to Sell Crude Oil in the Middle of a War, With Defined Risk

> Source: [How to Sell Crude Oil in the Middle of a War, With Defined Risk](https://youtube.com/watch?v=PThHoPkgp0g)

## Summary

This video presents a defined-risk options strategy for trading crude oil futures during a geopolitical crisis. The host explains a short iron condor on the CLV6 contract, detailing the setup, risk parameters, and management plan. The core idea is to profit from range-bound trading while avoiding the most volatile front-month contract.

### Key Points

- **Trade Setup** [00:14] — The trade is a short iron condor on CLV6 (October expiration): buy 66 put, sell 67 put, buy 95 call, sell 94 call. This creates a defined-risk range trade.
- **Contract Selection** [01:08] — The V6 contract is less sensitive to geopolitical shocks than the front-month U6, making it a better vehicle for this strategy.
- **Contract Specifications and Risk** [01:36] — CL is a 1,000 barrel contract. A $1 move is worth $1,000, and a 1 cent tick is $10. Each side of the condor is $1 wide, so max risk is $100 minus the credit received.
- **Break-Even Calculation** [02:18] — Break-evens are calculated by adding the credit to the short strikes. With a 30-cent credit, lower break-even is 66.70 and upper is 94.30.
- **Management Plan** [02:46] — The trade is managed with a '45 in, 21 out' approach. A target of 50% of max profit is set as a take-profit level.

## Transcript

of a war? This is Five Minute Futures sponsored by CME Group. Let's get into this week's trade. This week's product is forward slash CL and it's specifically CLV6, the October expiration here. We're going to be
condor right now. So, well, not necessarily selling crude. We're making an explosive trade to the upside right now. The idea here is to buy the 66 put
and sell the 67 put, buy the 95 call, sell the 94 call, creating a short iron condor position. It is a defined risk range trade. Why are we doing this? Well, we're selling the 67 94 short strikes and buying the 65 95 wings for
protection. The setup here is fairly straightforward right now. When we take a look at what's going on out at 48 days expiration, uh crude's been through a geopolitical shock, as it were, and there's been a big repricing of supply
of the curve, particularly in the front month contract, which the V6 is not right now. So, the trade is about whether or not the market can continue If there is another supply disruption, it should be reflected in the U6
contract first. The V6 would be a little bit less sensitive here. So, the 67 sits below recent swing lows, while the 94 short strike sits above the market, above recent highs that we've seen here in the CLV6 contract. Uh if there is any
supply pressure, demand worries, jawboning from Iran, from the United States, we can absorb a little bit of that volatility in the movement here. So, we're not trying to pinpoint this thing at its current price of $81.63
stay within a an overall range of where it's been trading for the past few months. So, let's talk about this cost map here. CL is a 1,000 barrel contract. $1 move is worth $1,000. A 1 cent tick is worth 10 bucks. So, both sides of
this condor are $1 wide. Each side has about 1,000 of spread width. So, since only one side can be fully challenged at any given time, the max risk is $100 minus the credit received. So, if the condor is sold for 30 cents total, and
that's $300 in credit and $700 in max risk before fees and slippage, it's sold for 35 cents. And that 350 in credit is against $650 in max loss. The break evens here are pretty clean right now. We take the short put strike and the
call strike and add the credit. And if the total credit is 30 cents, the lower break even is about 6670, and the upper break even is about 9430. Uh the max profit happens if CLV6 settles directly between 67 and 94 at expiration, and the
max loss happens below 65 or above 95. So, the middle is where this trade lives. There still may be a war going on, but it's going to ebb and flow, and the market may be sitting around the equilibrium point as it was back in May.
What's the management condition here? We're not waiting for expiration. At 48 days to expiration, this is what we call a typical tasty day trade. 45 in, 21 out. So, at 48 days in, we're going to hold this for a few weeks, maybe 3
weeks, 4 weeks, and then we'll revisit thereafter. But if we get to 50% max profit on the trade, right? If it's sold for 30 cents and decays for 15, we take look around and hope to go to max profit. There are other opportunities
So, for me, this trade is fairly straightforward. Crude oil offers traders a fairly straightforward liquid way of expressing their views in the energy market right now. As long as the market stays above 67 or below 94, this
thing is going to turn into a profitable trade. Ideally, it sits at the midpoint trade. Ideally, it sits at the midpoint directly between 67 and 94. So, when the in the middle of the war?" You say, "Yes." But you do it through selling the
shocks typically don't stay around for long. And more importantly, you stay away from that front month contract.