/CLF6 short strangle

/in /by

I just opened a short strangle position on the January 2016 contract of WTI crude oil, which expires on December 22 of this year still.

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 10/21/2015 /CLF6
(jan)		 45.43 2 short 37 P 0.39 0.07 56 $1380 $7.42 – –
2 short 57 C 0.30 0.09 $7.42
2 11/17/2015 /CLF6
(jan)		 41.99 1 long 37 P -0.52 0.15 29 $860 $3.71 – $180
1 long 57 C 0.02 $3.71
3 12/03/2015 /CLF6
(jan)		 40.14 1 long 37 P -0.56 0.21 15 – $3.71 – $130
1 long 57 C 0.02 $3.71

Trade reasoning

I closed the CLz5 trade yesterday, since the trade made 75% of profits in about 40% of it’s time, there was an OPEC meeting today in Vienna, and I also wanted to see the inventory numbers.
Read more

/NGZ5 short strangle

/0 Comments/in /by

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 10/09/2015 /NGZ5
(dec)		 2.73 2 short 2.3 P 0.022 -0.11 46 $900 $7.42 pending pending
2 short 3.3 C 0.023 0.12 $7.42
2 11/04/2015 /NGZ5
(dec)		 2.293 2 long to close 2.3 P 0.130 -0.48 20 -$1700 $7.42 pending pending
3 11/11/2015 /NGZ5
(dec)		 2.284 2 long to close 2.3 P 0.001 -0.01 13 – $7.42 closed -$1720

Trade reasoning

The supply-demand equation in natural gas has been really balanced over the summer, with no sharp moves in either direction. The price of NG started trending lower towards the end of summer, as supply is strong.

All else being equal, the autumn months are slow for NG. It’s not hot enough, nor cold enough to dig into supplies.

Winter is approaching though, and as we know, NG reacts with harsh volatility to weather patterns during the winter, if supplies are strained. Right now, supplies are strong. Surpluses now stand at 155 Bcf versus the 5-year average, and 443 Bcf greater than at this time last year. This year’s El Nino is a strong one, so meteorologists are expecting a mild winter. If this hold up, it should stay relatively calm for NG as well.

Read more