Editor’s Note: Jim Pearce just closed a call option on Sonoco Products (NYSE: SON) for 150% in 15 days — made possible by the war in Iran driving option premiums to extraordinary levels. While options plays require active management, the same energy disruption has a quieter beneficiary: essential-service infrastructure stocks that simply keep collecting regulated revenues and raising dividends regardless of what the Strait of Hormuz does. Robert Rapier covers exactly those companies in Utility Forecaster. See his current Best Buys →

Last week, I closed out an options trade for a gain of 150 percent in less than a month. I’m not saying that to brag (although I’ll admit it feels good to say it), but to make a point about one of the unintended consequences of the war in Iran.

I first wrote about it a few weeks ago (“Stock Market Instability is an Option Trader’s Paradise”). As I noted then, “premiums for both call and put options have soared since the closing of the Strait of Hormuz in early March.”

In that article, I used packaged products manufacturer Sonoco Products (NYSE: SON) as an example of an options play with huge upside potential. I said at the time, “According to my PF Pro stock screener, algorithms on Wall Street overreacted to the company’s conservative guidance and the stock is now fundamentally undervalued.”

I further opined, “From a technical perspective, its relative strength index (RSI) of 29 suggests that SON is oversold and should soon rally up towards its 50-day moving average price around $54. If that happens, we will make a very nice profit on our call option trade despite paying a higher premium for it than we would have under normal circumstances.”

Force Multiplier

That is exactly what happened. The call option that we bought for $1 a share three weeks ago could be sold late last week for $2.50. That works out to a gain of 150 percent in just 15 days.

Don’t even try to figure out what that return works out to on a compounded, annualized basis (in case you’re wondering, it’s 482,177,429,723%). That’s the kind of math that makes my head hurt.

But what makes my head feel better is knowing that the war in Iran has created the potential for those types of investment returns, at least for a while. Almost every day the narrative changes regarding the exact timing of when the war might end. And as that narrative flipflops from optimistic to pessimistic, so too does the time element of options premiums.

Want proof? The Sonoco Products trade that produced the outstanding result described above happened while the price of the underlying security increased from $49 to $52.

In other words, a 6 percent rise in the value of the stock produced a 150 percent gain in the associated call option. That’s more than just simple leverage; it also contains a force multiplier due to the wide range of extreme outcomes that the war in Iran may produce.

Also read: “The Three Things Investors Can Control – And Why Everything Else is Noise“

Multiple Problems

After I closed out the Sonoco Products trade last week, I opened a new position in a different company and sector. And since Wall Street was in an optimistic mood that day, I decided to use a put option this time (a put option increases in value when the price of the underlying security goes down).

That was an easy decision. The hard part was convincing myself that the stock screener I created for this purpose was correct in identifying the tech sector as being overvalued and vulnerable to a quick selloff if the war in Iran reignites into a full-scale military operation.

This time, the company it tabbed as being ripe for a pullback is machine vision products manufacturer Cognex (NSDQ: CGNX). After releasing strong fiscal 2026 Q1 results last week, its share price rose above $71 after starting this year below $36.

To be clear, there’s nothing wrong with Cognex. It is a well-run business that is in the right place at the right time.

However, my system suggests that there is something wrong with multiples that Wall Street is assigning to its sales and earnings. At its current share price, Cognex is valued at 86 times trailing earnings compared to a multiple of 34 for the NASDAQ 100 Index.

It takes a lot of guts to bet against the tech sector these days, especially when just about everyone on Wall Street is jumping on the AI bandwagon again. However, that is also why there is the potential for huge gains if my timing turns out to be correct.

The volatility Jim describes above isn’t going away soon — and the Iran disruption creating his options opportunities is the same disruption that’s making essential-service infrastructure stocks increasingly attractive. The companies that generate power, move natural gas, and run the grid don’t need the war to end to deliver strong returns. Robert Rapier has spent 36 years identifying the most resilient names in this space, and his portfolios carry less than half the market’s volatility while paying consistent income. See Robert’s current Best Buys in Utility Forecaster→