Monday, March 9, 2026

Don here…

Crude oil round tripped from $120 down to $81 in a single session today. Brandon Chapman spotted the trade hiding inside that move.

Brandon took a call spread on American Airlines during the sell off and banked 30% before the close. His target was 70%, but with this much headline risk, he took the money and removed the overnight exposure.

The VIX opened around 35 over the weekend and collapsed back to 25 by today’s close. Brandon’s four step bottoming process triggered on Friday’s sell off, where we saw the market drop more than one ATR with a VIX spike.

That sounds bullish. The oil futures curve says otherwise.

Brandon walked through the crude oil term structure and showed that backwardation has steepened dramatically since the Iran situation escalated. The curve was flattening toward normal in January and February. Now it has snapped back into steep backwardation, which prices in an implied shortage and elevated crash risk to the upside. Oil could spike to $150 on a single headline.

The price pulled back today, but the futures market is still pricing in substantial upside risk. That disconnect is the story.

Here is what Brandon flagged in tonight’s video:

• American Airlines saw 33,000 option contracts trade today, with 30,000 bought in just two prints around 20 to 21 cents. Short interest sits at 10.6% of the float, putting it at three squeeze bars on Brandon’s scale.
• Delta Air Lines added 5,000 contracts bought near the ask for the March 20expiration. The squeeze potential is lower, but the directional bet is the same.
• Brandon’s call spread on AAL bought the 11 strike and sold the 13, with a $13 price target if oil has peaked. He closed for 30% in less than a day rather than holding through overnight risk.

Airlines are the direct beneficiary of falling oil prices, and the JETS ETF had been hammered down to $24 on the crude surge. The intraday reversal in oil sent airlines ripping higher, and the option flow suggests institutional money agrees this trade has room to run.

Brandon’s bottom line: use any relief rally to raise cash levels. The underlying conditions that have driven volatility over the last few months have not changed. Credit risks remain, and the SPY is trying to work back into the 674 to 697 volatility box. The rally may lack depth and only carry back to prior levels.

Click here to watch Brandon break down the oil curve, the airline trades, and what comes next

To your success,

Don Kaufman
Chief Market Strategist, TheoTRADE

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