WTI options give the buyer the right, but not the obligation, to take a position in NYMEX WTI crude oil futures at a set price. The main monthly contract is LO. CME Group also lists weekly options for shorter-term event risk. This guide covers how they work, when they stop trading and what can go wrong.
LO Contract Basics
| Product code | LO |
| Underlying | One CL futures contract |
| Contract size | 1,000 barrels |
| Premium quoted in | US dollars per barrel |
| Tick | $0.01 = $10 |
| Exercise | Into CL futures |
Summary only. Always confirm current terms in CME Group's contract specifications and rulebook before trading.
A premium of $2.50 costs $2,500 for one contract, because the premium is per barrel and the contract covers 1,000 barrels. Compare the underlying contract in our WTI futures specifications.
When WTI Options Stop Trading
Monthly LO options stop trading before the underlying futures: NYMEX's Chapter 310 rule sets expiry three business days ahead of the underlying futures expiry. CL futures themselves stop trading earlier in the month before delivery, so an option on the December contract expires in November. Check CME's product calendar for exact dates, as holidays can shift them.
Weekly WTI Options
CME lists weekly WTI options on all five weekdays, with separate product codes; the Friday series uses LO1 to LO5. Traders use them to focus on a single event, such as an EIA report or an OPEC+ meeting. According to CME, if a Tuesday or Thursday weekly expires on the same day as the monthly LO option, it exercises into the second-listed futures contract.
Calls, Puts and Basic Uses
- Buying a call: profits if WTI rises enough to cover the premium. The most you can lose is the premium.
- Buying a put: profits if WTI falls enough, and a producer or holder of crude can use it as a hedge.
- Selling options: collects the premium but carries large risk. A short call has no theoretical limit on losses.
Risks to Understand
- Volatility: premiums rise and fall with implied volatility. In a crisis such as the 2026 Strait of Hormuz disruption, options can become expensive, so a correct view on direction can still lose money.
- Time decay: an option loses value as expiry approaches, all else equal, and weekly options decay fast.
- Exercise into futures: an exercised option becomes a futures position with margin requirements and delivery obligations if held too long.
- Liquidity: strikes far from the market and distant expiries can have wide bid-ask spreads.
Use our WTI futures calculator to size the underlying exposure, and read the WTI trading guide for how options compare with futures, ETFs and CFDs.
Frequently Asked Questions
What is the LO contract?
LO is the CME Group product code for monthly NYMEX WTI crude oil options. Each option is on one CL futures contract covering 1,000 barrels.
When do WTI options expire?
Monthly LO options expire three business days before the underlying CL futures contract under the NYMEX Chapter 310 rule. Check CME's calendar for exact dates.
How much is one tick on WTI options worth?
A $0.01 per barrel move in the premium is worth $10 on the standard 1,000-barrel contract.
Are WTI options cash settled?
Standard LO options exercise into physically delivered CL futures. Check the specifications of any other product you trade, as terms differ between products.
Sources
- CME Group — WTI crude options fact card
- NYMEX Rulebook Chapter 310 — Light Sweet Crude Oil Option
- CME Group — Tuesday and Thursday weekly WTI options FAQ
Disclaimer: This guide is for general educational purposes only and is not investment advice. Options and futures involve substantial risk of loss.