Editor’s Note: Personal Finance has been in continuous print since 1974 — now in its 52nd year. The discipline Jim Pearce applies to today’s oil-and-airline rotation trade is the same framework he brings to every sector he covers. His latest briefing lays out where that discipline is pointing right now. Read it here →

Last week, I wrote about the big gains that can be had “When One Profit Window Closes, Another One Opens.” I explained how my readers could have booked profits in excess of 200 percent by purchasing a call option on the ProShares K-1 Free Crude Oil ETF (CBOE: OILK).

Since OILK tracks the price of crude oil, it can be used to speculate on the future direction of oil prices. Two months ago, after oil prices had fallen from $115 to $70 a barrel, I suggested buying a call option on OILK (a call option increases in value when the price of the underlying security goes up).

The timing of that trade was close to perfect. Shortly thereafter, hostilities in Iran intensified and oil prices shot back up, as did OILK’s share price. The call option on OILK that could be bought for $4 when I recommended it in July is now selling for around $10.

At the end of that article, I further noted: “If you’re wondering how to profit from a reversal in oil prices, you don’t have to look very far. The same ETF that we used to profit from a spike in oil prices can be used to make just as much money going the other way.”

Plane Thinking

Another way to profit from a drop in oil prices is to buy shares of the U.S. Global Jets ETF (NYSE: JETS). According to the fund’s sponsor, “The U.S. Global Jets ETF (JETS) provides investors access to the global airline industry, including airline operators and manufacturers from all over the world.”

Its top four holdings are United Airlines (NSDQ: UAL), Delta Air Lines (NYSE: DAL), Southwest Airlines (NYSE: LUV), and American Airlines (NSDQ: AAL). Combined, those four stocks account for roughly 43 percent of the fund’s net assets.

As you might expect, 2026 has been a tough year for JETS. In February, its share price crested above $31. But by the end of March, it was below $24 as jet fuel prices spiked after the onset of the war in Iran and subsequent closing of the Strait of Hormuz.

When oil prices fell over the summer, JETS soared above $33 on hopes that the war would soon be over. At the same time, OILK’s share was heading in the opposite direction.

That is when I decided it was time to make a bet that oil prices would soon reverse direction by purchasing a call option on OILK. Now, I feel it is time to take those profits off the table and make a new bet on a drop in oil prices.

Touch and Go

Due to the inverse correlation between oil prices and airline stocks, OILK and JETS have moved in opposite directions this year. As you can see from the chart below, they have converged three times over the past seven months, only to quickly move apart.

Each time after that, they have reverted to the mean as represented by the green line in the chart above. When that occurs, put options on OILK increase in value, as do call options for JETS.

I think we are getting close to another reversion to the mean. In my parlance, that is known as a profit window as represented by the red boxes in the chart above.

I don’t know when oil prices will start to come down, but I suspect it will happen before the midterm elections in seven weeks. The Fed just raised its policy rate in response to persistently high inflation, due in part to high fuel prices.

A lot of voters aren’t happy about that. The quickest way to make them happy would be to reopen the Strait of Hormuz, so fuel prices start coming down. And when that happens, our next profit window will open up.

The profit window I’m positioning for above is the same discipline I’ve applied for more than a decade at Personal Finance — find where two assets move in opposite directions, wait for the convergence, and position before most investors see it. I’m applying the same logic to a broader market rotation right now: Wall Street rotating out of overvalued mega-cap AI builders into the traditional businesses quietly using AI to expand their margins. I built a portfolio around that rotation, and the thesis is now playing out. Read the AI Margin Rotation briefing →