Wednesday, October 14, 2009

Natural Gas Play for Tomorrow

This is what I am following today, eyeing the inventories report tomorrow.

Close but not optimal yet.


Here we go, as close to optimal as we will get:

Note that INO generated a red alert on UNG through their tool: their trade triangle tool.


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Bike said...

You said that the UNG straddle wasn't yet optimal.

What conditions are required for an optimal straddle trade?

Thank you

The Shocked Investor said...
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The Shocked Investor said...

Hello Bike. The optimal would be when UNG is at $11 exactly and both calls and puts cost the same. Note that if UNG does not move and it ends as $11 the loss is 100%, with only 2 days to expiration. Leverage is extreme. 3% is nothing for UNG, but you never know. I like it.

October 14, 2009 12:49 PM

Bike said...

Thank you very much.

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