Covered Strangle on Natural Gas Futures

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.

Trade ist aktiv:

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

Trade ist aktiv:

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.

Trade ist aktiv:

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.

Trade geschlossen: Ziel wurde erreicht:

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.