Weekly Update: My Option Trade on the Venezuela Situation
The Venezuela Situation has created what could be a once-in-a-decade investment opportunity. And I am taking an option trade to potentially cash in on a big move in 2026.
First, this is not a low-risk trade. Options always carry more risk in terms of percentage on capital. And this is an all-or-nothing bet that I believe has massive upside.
Like all big ideas, there is a catalyst involved. In this case, the US intervention in Venezuela.
For those who don’t know, Venezuela has the largest oil reserves in the world – even more than Saudi Arabia. And last week, US special forces black bagged the country’s president and bought him back to Manhattan to stand trial.
POTUS announced to the world, with no hesitation, that US companies would fix Venezuela’s infrastructure and start making money for the country.
And therein lies the opportunity…
You see, Venezuela doesn’t have light, sweet crude like what we have in the US. Theirs is heavy crude which requires specialized equipment to extract, transport and refine.
This equipment also requires extensive maintenance which Venezuela has neglected for two decades thanks to sanctions and generally just not caring how they treated their newly nationalized assets.
Because of this, they only drill around 2.5 million barrels a day. That pales in comparison to the 15 million barrels a day coming out of the US.
But that will soon change…
If their infrastructure gets the overhaul it needs, Venezuela could once again become a very rich country. Its citizens would be lifted out of poverty in a very short time.
And this is a bet on that outcome.
At some point this year, once the dust settles and the Maduro trial wraps up, President Trump will take the podium alongside Venezuelan and announce this massive Venezuelan infrastructure project.
Analysts believe the cost for such a project could be upwards of $250 billion dollars. And whichever company gets this massive 12-figure contract is going to see their stock price soar.
There are only 3 companies with the size, skill and expertise to pull off such a project: Haliburton (HAL), Baker Hughes BKR), and Schlumberger (SLB).
I cannot say which company will get it, or if the contract will be split between 2 or 3 of these firms.
So instead of betting it all on a single horse, I am making a parlay of sorts. I am buying long-dated call options on all three of these stocks.
Each option expires in December 2026 – giving all year to see if it plays out like expected.
Here are the specifics:
- SLB Dec18 $55 call (approx. $300/contract)
- HAL Dec18 $40 call (approx. $205/contract)
- BKR Dec18 $60 call (approx. $290/contract)
These options have strike prices roughly 20% above the current stock prices. So, each stock needs to be up over 20% by year end to profit.
But, at least to me, this seems more than reasonable given the I scale of this situation.
Catalysts are huge in the investment world. Whether it’s an earnings beat, a rate cut, or positive drug trial results, these shock events are behind nearly every major market move.
And for an oil services company… What could POSSIBLY be bigger news than getting access to the largest oil reserves in the world?
I am not telling you to take the same trade. This is no way a risk-free or even a low-risk trade.
It is an all or nothing bet on a once-in-a-decade opportunity in the oil services sector. I’ll let you know how it works out.
Best wishes for your trading,
