1- First Gulf War (1990–1991)
Iraq invaded Kuwait in August 1990, and this event caused a sharp increase in oil prices. Global markets panicked.
Many large investors, led by Soros, understood that the US would intervene militarily and that the war would not last long. They initially profited from the rise in oil prices and then made millions by 'shorting' oil when prices fell.
They made millions of dollars from their sales in oil futures and currency markets.
2 - Assassination of an Iranian general (January 2020):
The US killed Iranian General Qasem Soleimani on January 3. Oil prices spiked overnight.
Some traders had bought call options in energy and defense companies like Raytheon (RTX), Lockheed Martin (LMT), and Occidental Petroleum (OXY). These options generated profits of up to $2 million from $200,000 in a single day.
3 - Russia-Ukraine War (2022):
Russia invaded Ukraine in February 2022. Markets fell, while oil and defense stocks appreciated.
Those who bought energy companies like ExxonMobil, Chevron, and defense stocks like General Dynamics, Northrop Grumman in advance made millions. Famous investor David Einhorn anticipated a global food crisis due to port closures and invested in fertilizer and agricultural companies. Stocks rose by 100% within a few weeks. Some hedge funds made hundreds of millions of dollars.
4 - Israel-HAMAS Conflict (October 2023)
HAMAS's sudden attack on Israel increased tensions in the region. Large traders bought oil options, gold futures, and defense ETFs like ITA. Oil and gold appreciated, and defense stocks spiked. Within a few days, option prices rose by 200-300%, resulting in significant profits.
In general, option trading during short-term wars and geopolitical tensions is considered superior to stocks for quick and significant profits — but it is riskier.
Why can options be more advantageous in a short-term war?
1- Volatility increases → Option prices (especially call/put) spike.
2- You can choose the direction with options, meaning you can profit from a decline in price or an increase.
For example:
When war begins, buying puts from non-oil and non-military sectors can result in profits from declines.
You can buy calls in the defense and oil sectors to profit from increases.
3 - Price changes in options can be 10x or sometimes even more compared to stocks, which means high profits in the short term.
For example:
In January 2020, when the US killed Iranian General Qasem Soleimani, RTX stock rose by +20% within 15 days after the war, while RTX call options appreciated by +350% during that period.
In short-term wars, option trading risks are minimized because if the war is in an oil country, oil and arms company stocks will rise. If not an oil country, it is necessary to check what the country sells the most to the world.
However, there are 3 main issues to keep in mind during such critical periods:
1- Option trading requires professional planning and risk management.
2- If you make a wrong choice, the option could be worth $0.
3- Ideal for short-term profits, but it's not gambling!
Now let's talk about the ongoing and likely short-term Iran-Israel War.
Everyone knows which sectors both states are in the world market. Accordingly, the expected market reactions on the first day when the market opens will be approximately as follows:
1- Oil and gas will appreciate (already appreciating)
2 - Defense industry stocks will rise (already rising)
3 - S&P 500, Nasdaq is falling (slightly)
4 - Gold will appreciate ( already appreciating ) (safe haven)
Short option strategies are approximately as follows (also applicable to stocks)
1- Defense industry stocks are rising (Lockheed Martin (LMT), Raytheon Technologies (RTX), Northrop Grumman (NOC) - Call Options (1–2 weeks) have a probability of rising by 150-200% - stocks can also rise by 10-15%)
3- The same scenario can be applied to the Energy (Oil-Gas) sector with companies like ExxonMobil (XOM), Chevron (CVX), Occidental Petroleum (OXY).
The person who made the most profit from war in financial history is Nathan Rothschild – Battle of Waterloo (1815).
He received news of Napoleon's defeat before anyone else in London. To create panic in London, he spread rumors that Napoleon had returned and sold his bonds. Everyone panicked and began selling – prices fell. Rothschild secretly bought cheap bonds again. A few hours later, when official news broke, bond prices surged, and within a week he made billions of dollars in today's money. This is considered the most profitable operation in financial markets during wartime in history.
It is possible to make money from options and stock trading during short-term wars, but only if you react quickly and smartly.
In the US, individual investors prepare a Checklist for Rapid Trading during wars to avoid missing opportunities.
The checklist includes approximately the following questions:
1- Is the news official and verified, or is it just a rumor?
2- How local or global is the event's impact?
3- Are the markets open, or have they not opened yet?
4- Is there enough balance in the account?
5- Have I approximately chosen the strike price and expiry date in advance? (Option trading)
6- Am I away from panic and FOMO + am I committed to the system?
FOMO - Fear of Missing Out
7- Am I diversifying the portfolio?
8- When the income reaches 2–3 times, close a portion (partial sell)
9- Exit the market 2–3 days after the event, as a correction will come.
10- The best opportunities occur within the first 12–24 hours
Great profit opportunities are possible not only by following the news but also through quick and smart decisions. War periods are opportunity periods for a planned investor, not panic!
