The Big Beautiful Trade

Most investors spend their careers chasing trades after the fact − buying after the breakout or reading about the opportunity after it’s already moved.

What I’m going to show you in this report is the exact opposite. It’s a repeatable, documented pattern built around events the U.S. government has already scheduled and published for the next 13 years.

It all has to do with events called lease sales.

A lease sale is the process by which the federal government auctions off the rights to drill for oil and gas on public land and in federal waters. Energy companies submit bids, and the winners secure the legal right to drill that acreage for decades.

These are long-term claims on some of the most valuable energy reserves in the world, which can translate into billions of dollars’ worth of oil and gas production.

The Big Beautiful Bill, signed into law on July 4, 2025, legally requires 45 offshore oil and gas lease sales between now and 2039:

• Two per year every year from 2025 to 2039
• Six in Alaska’s Cook Inlet through 2032
• Four in the Arctic National Wildlife Refuge, which holds an estimated 7.7 billion barrels of oil
• Five sales in the National Petroleum Reserve in Alaska.

To access the full list of sales that have already been scheduled by the Department of the Interior’s Bureau of Ocean Energy Management, click here.

The bill also mandates onshore lease sales − and in large numbers. It requires at least four onshore lease sales per year in each of nine major oil and gas states: Wyoming, New Mexico, Colorado, Utah, Montana, North Dakota, Oklahoma, Nevada, and Alaska. That’s a minimum of 36 additional auctions every year, on top of the offshore calendar.

The onshore sales present a more limited trading opportunity since many of the winning bidders are private companies whose shares aren’t publicly traded.

That being said, they’re an important reminder that the Big Beautiful Bill doesn’t just mandate a handful of offshore events; it mandates a steady, legally required drumbeat of energy auctions − both offshore and on − for the next decade and a half. Future presidents can’t cancel these auctions, and a future Congress would need entirely new legislation to touch them. They are federal law.

Each of the offshore lease sales goes to a small group of the world’s largest oil companies. The same names show up again and again.

In fact, for nearly two decades, a specific pattern has played out around every major auction: The stocks of the companies bidding on those leases move − predictably, repeatedly, and often dramatically − in the weeks surrounding each sale.

My team and I tracked 28 federal lease sales going back to 2008, and what we found was remarkable. Certain companies have delivered winning trades around these auctions at rates of 70% to 79% across nearly two decades of data.

The next auction is August 12, 2026, when 80 million acres of the Gulf of America will go up for bid in a single afternoon.

This report will walk through the historical data, the priority signal we use to select the highest-probability trades, and everything else you’ll need in order to prepare for the next decade-plus of these trade setups.

A Surprise Discovery

Our deep dive into the 28 federal lease sales going back to 2008 gave us nearly 200 individual data points. For each one, we measured what happened to the company’s stock in the days and weeks around the auction.

To our surprise, the same pattern showed up over and over. From before the auction to a couple of weeks after, roughly 2 out of every 3 companies involved saw a positive move in their share prices.

The pattern was more consistent for some names than others. But for five names in particular, it was incredibly strong:

These five companies − five of the largest oil companies in the world − all had a 70% to 79% win rate around past lease sales across nearly 20 years’ worth of data.

That level of success is what the Priority Score (more on that below) is built to find.

This data is the foundation. Everything else in this report sits on top of it.

Why the Pattern Exists

Most market patterns are noise. They look real until you try to trade them… and then they fall apart.

This one doesn’t, and I’ll explain why.

The list of eligible bidders (called the “Restricted Joint Bidders List”) goes public just weeks before each sale. Energy traders check that list to confirm that those companies are about to spend real money on long-term acreage.

The traders start buying − and they don’t just buy the bidders. They buy across the whole energy sector.

That matters because energy stocks are highly correlated. When one big oil company moves, the others tend to move with it. They all sell into the same global market, they share the same costs, and ETFs buy them as a basket. When money flows in, every name in the basket gets a bid.

Even though the Joint Bidders List names only a handful of companies, the lift spreads across the sector. That’s the engine.

Federal antitrust law bars the world’s biggest oil companies from pooling money on a single bid. To enforce that ban, the government has to publish a list of which companies fall under it.

Twice a year, before each round of auctions, the Bureau of Ocean Energy Management releases the Restricted Joint Bidders List in the Federal Register. It’s an official government document that acts as a roster of confirmed major bidders.

The current list, which will be in effect through October 2026, includes Shell, Chevron, BP, Equinor, ExxonMobil, and TotalEnergies.

Now, the Joint Bidders List tells us who’s in the room, which is extremely valuable. But it doesn’t tell us where to put the most weight.

That’s where our Priority Score comes in.

Identifying the Top Setups

Each company receives a Priority Score on a scale from 0 to 1. The scores are based on the same 20-year stock market data set I mentioned above.

It ranks every confirmed bidder on three things:

• How often the company has bid in past auctions
• How much the stock has moved around past auction dates
• How reliably it has beaten the broader energy market in those windows.

Priority Score is not a win rate. It’s a quality grade. For me to recommend a trade, I need to see a score of at least 0.5 − ideally 0.7 or higher.

Here are the Priority Scores for the six companies on the August 12 bidder list:

At the bottom of the list, you sometimes find names like Petrobras at -0.17 – a stock that has lost roughly 18% on average in the 15 days around past lease sales.

We don’t trade it, because the data tells us not to.

We don’t need perfect scores to take high-conviction trades. We need scores that reflect moderate strength. That’s enough.

Five of the six August 12 names clear that bar – though we’d weight Shell (at 0.83) more heavily than ExxonMobil at (0.64).

The higher the score, the stronger the signal. The stronger the signal, the higher our conviction to do what comes next.

How Options Let Us Capture the Most From This Catalyst

So far, we’ve talked about the pattern, the strategy, and the stocks themselves.

Now I want to tell you how we use options to amplify that pattern.

But first, I need to clarify something about the data we’ve been discussing.

The 70% to 79% win rates from earlier are measured on fixed-period returns. We compared each stock’s price 15 trading days after the announcement to where it sat before.

That’s the signal we built the strategy on. The moves it captures are modest – typically in the range of 5 to 8 percentage points above the broader energy market.

However, there’s a downside to using a fixed time period: A stock that finishes a 15-day window up 5% can move much more than 5% along the way. It might spike to 9%, fall back to 3%, climb again to 7%, and settle at 5% on Day 15.

The fixed-period number doesn’t see those swings. But options do.

That’s the second part of this strategy. The option layer captures two things at once:

• Leverage on the upward push the stock pattern shows
• Volatility – the intra-period price swings the fixed-period data doesn’t reveal.

Run those together (with the right option), and a modest underlying move can produce a much larger result.

To maximize those potential gains, we follow a four-step process. (If you’re new to options, I recommend watching my Options Master Class video series, which was specifically designed to help everyday investors learn what options are and how to trade them.)

Rule No. 1: Enter 15 days before the sale.

Twenty years’ worth of data supports entering these trades 15 days before the sale. If we enter earlier than that, the catalyst is too far away and time decay eats into the option. If we enter later, the option is already priced for the catalyst, so you’re overpaying.

For August 12, that puts our entry on Tuesday, July 28.

Rule No. 2: Buy the at-the-money strike.

Use the whole-dollar strike closest to the current stock price. If the stock is at $158.40 and the available strikes are $155 and $160, take the $160 call.

If the stock sits exactly between two strikes, go with the lower one. That puts the call slightly in the money with a small, built-in cushion.

A quick definition: The strike price is the price at which the call gives you the right to buy the stock.

At the money means the strike sits roughly on top of the current stock price. We pick at-the-money calls because they have the highest delta, meaning they move almost dollar-for-dollar with the stock.

When we expect a 2% to 5% move, we want an option that captures most of it.

We stick to whole-dollar strikes because they trade more often and have tighter spreads. Less of your gain gets eaten as you’re getting in and out of the trade.

Rule No. 3: Use the monthly expiration after the sale.

Every option expires. As the expiration date gets closer, the option leaks value just from time passing. That’s called time decay, or theta.

To keep theta under control, use the monthly expiration − that is, the option expiring on the third Friday of the month − in the first calendar month after the auction.

If the auction is in March, use options expiring on the third Friday in April. If it’s in August, the options should expire on the third Friday in September.

This gives the trade enough room for the move, plus a buffer if the auction gets pushed back a week or two – which has happened. Together with the 15-day entry window, you’re looking at a roughly 30-day window from entry to expected peak.

Rule No. 4: Exit at the post-announcement peak.

This is the rule that surprises new members. We exit after the news, not before.

Across the winning option trades in our records, the contract reached its peak an average of about 15 days after the lease sale announcement. Roughly 9 in 10 peaks landed after the news, not in the run-up.

Here are my guidelines regarding exit timing:

• Watch the position closely from announcement day forward.
• The peak typically lands within two weeks of the announcement, but timing varies – sometimes a few days, sometimes longer.
• Exit when the upward move stalls. Don’t try to hit the exact top.
• If the position hasn’t peaked by about 30 days from entry, close it.

For the August 12 sale, the trade will likely be open from July 28 through somewhere around mid-to-late August.

I’ll send specific exit guidance once we’re in the window.

The Rules in Action

The following examples run through the rules I just laid out.

The table below shows the option contracts our rules would have selected (and their peak gains) for the most recent lease sale, the Big Beautiful Gulf 2 auction in March 2026.

Thirteen companies bid on 25 blocks across 141,000 acres. Below are the top five peak option gains among those bidders:

Now, a 2,735% peak return is rare. We won’t see one of those every cycle − maybe one every five cycles.

But that size of gain (and the handful of triple-digit gains beneath it) shows the potential of the strategy.

What to Realistically Expect

By following our rules and exiting approximately two weeks after the announcement, we aim to capture a healthy portion of these kinds of peak gains.

Oftentimes, that’s most of the move. Sometimes, it’s less.

Here’s the bottom line…

The 20-year stock pattern we walked through earlier is the foundation, with a 60% to 70% win rate across nearly 200 potential trade setups.

The Priority Score lets us isolate the best targets, with win rates between 70% and 80%.

Then, the option layer magnifies those moves, helping us capture the best possible gains − often around two weeks after the announcement of who wins the bids.

That’s how you construct an edge out of the noise.

Of course, your exact return on any single contract will depend on how big the underlying move is,  how tight the spread is, and how disciplined you are about the rules.

With that in mind, here are some practical notes:

• Be mindful of your position size. Don’t put all your capital in the company with the highest Priority Score. Decide in advance how much total capital you plan to invest in these trades, and invest no more than 25% to 30% of the total in any one trade.
• Treat each trade as binary. Some will work. Some won’t. The edge is in running the list every cycle.
• Be prepared for delays. Lease sales sometimes get pushed back. Our month-after expiration gives a buffer, but a long delay can turn a position into a loss.

Your August 12 Setup

Big Beautiful Gulf Auction 3 will take place on August 12, 2026, in New Orleans, with 80.4 million acres of the Gulf going up for auction.

The Restricted Joint Bidders List named Shell, Chevron, BP, Equinor, ExxonMobil, and TotalEnergies.

We’ll trade the top five by Priority Score: Shell at 0.83, Chevron at 0.81, BP at 0.78, Equinor at 0.73, and ExxonMobil at 0.64.

Entry is Tuesday, July 28 – 15 days before the auction.

We’ll open at-the-money September calls on each of the five names, at the whole-dollar strike nearest to each stock’s price on entry day.

Then we’ll hold through the announcement.

Again, the peak historically lands within two weeks of the announcement.

I’ll send two alerts – one on July 28 with the exact instructions for the stock and the option and another when it’s time to exit.

Until then, there are three things to do:

• Make sure you have Level 2 options approval at your brokerage.
• Decide on your total budget for these trades.
• Read this report once more before July 28 to familiarize yourself with the rules.

The Big Beautiful Trade fits on an index card. Five trades. One entry date. One exit window. About four weeks of holding from entry to typical peak.

Most trading strategies ask you to predict something: earnings, Fed decisions, geopolitical events, etc. This one doesn’t. The catalyst is already on the calendar, and the bidders are already named. All that’s left is positioning yourself ahead of the window and letting the pattern do what it’s done for nearly two decades.