/NGX5 short strangle

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Today, I opened a short strangle on the upcoming month contract of natural gas.

The details of this trade are as follows:

Date Inst. Mark. # L/S Strike C/P Price Δ Days Max profit Comm. Close P/L
1 8/31/2015 /NGX5
(november)		 2.76 2 short 2.3 P 0.018 -0.09 57 $980 $7.42
2 short 3.2 C 0.031 -0.16 $7.42
2.1 10/02/2015 /NGX5
(november)		 2.44 2 long to close 2.3 P 0.054 -0.28 25 – $7.42
2 long to close 3.2 C 0.004 0.03 $7.42
2.2 10/02/2015 /NGX5
(november)		 2.44 3 short 2.1 P 0.013 -0.09 25 $510 $11.13
3 short 2.9 C 0.010 .08 $11.13
3.1 10/27/2015 /NGX5
(november)		 2.14 3 long to close 2.1 P 0.024 -0.40 1 – $7.42 Put closed
Call expired		 -$210
3 expired 2.9 C 0.000 0.00 $0

Following my previous successful trade in NG, I’ve been looking at it ever since.

Trade reasoning

/NG has been trading in a fairly narrow channel for several months now. The summer hot season is more or less over, so demand should not be a catalyst towards higher prices. Even if an unexpected heat wave comes, it won’t raise demand as much, as to put my strangle in jeopardy.

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How to play the markets?

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This past week has been incredibly volatile. I played the market drop with a put spread, but could have made much more. Losses by not winning is actually a bit worse of a feeling than actual losses suffered.

Anyhow, the markets seem to be calming down, and I’m looking for trades to open. This site is dedicated to non-directional options trades, but as a trader, you’re constantly looking for opportunities, and when it comes, you need to have an open mind.

Here are a few ideas for taking advantage of the settling market:

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/ZNZ5 short strangle

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Today I opened my first 10 year treasury bond short strangle (/ZN). I don’t have much experience with this instrument as of yet, so I’m basically jumping in head first. That’s how you learn quickly, right?

I have gathered my findings in my treasuries trading guide, and will update it constantly, as I learn new things about this market.

The details of this trade are as follows:

Date Inst. Mark. # L/S Strike C/P Price Δ Days Max profit Comm. Close P/L
1 8/17/2015 /ZNZ5
(october)		 127’035 4 short 123.5 P 0″04 .07 39 $437.50 $12.28 expired OTM $437.50
4 short 131.5 C 0″03 .05 $12.28

This is a high probability trade with low deltas, so I had to sell 4 batches contracts on each side, to make it worth it. Even like this, the initial margin is just $3,033. The bad part is that I needed to sell 8 contracts, which increased commissions.

Trade reasoning

/ZN has been in a very nice range for quite a while, basically over a year.

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