Covered Strangle on Natural Gas Futures

28 sept. 2016

After 14 days of mostly bullish candles, we get the first sign that the bears wants some action and/or some bulls taking profits, breaking the 20 EMA and the hourly trendline. Looking to profit from the next move down, I will be shorting the Natural Gas Futures and Sell a Strangle ( 3.2 Call and 2.85 Put) to reduce my cost basis and improve my probabilities of profit to 64%. I can improve it even more by closing it early when we make a profit of $1,260 for one contract.

30 sept. 2016

Transaction en cours

Trade is going well, but Natural Gas can move very fast. I moved the Future contract to break even, just in case.

5 oct. 2016

Transaction en cours

Price moved up and got to our entry price on the Future, so I closed it. The strangle is still open and we are positioned in the middle. Our break evens are at 3.321 and 2.729.

13 oct. 2016

Transaction en cours

Today we had Natural Gas Storage news, so I put a stop entry at the last pivot in case we got a big move up. We did, so I bought 1 Future contract at 3.22 and rolled my put up to get extra credit and now we have a Covered Straddle.

Any price above 3.2 at expiration (10/27/16) we get a profit of $970.

21 oct. 2016

Trade fermée: cible de profit atteinte

After the move up I was able to put the Future on break even and then sold it when we broke the trend, so this was a circus trade.

Today we continued the move down, with only a couple of days to expiration I decided to close the trade for a $1,050 profit.