/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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/NGU5 short strangle

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My newest trade involves trading options on natural gas, symbol /NG. I’ve been studying how the natural gas market works, gathered my findings in my NG trading guide, so I’m semi-confident in my knowledge of this market.

The details of this trade are as follows:

Symbol: /NGU5
Status: opening trade
Strategy: short strangle, SEP 15 2.5 P /-\ SEP 15 3.3 C (market at $2.895)
Contract size: 2
Days to expiry: 36
Max profit: $820

I sold 2 contracts each, as selling in multiples of 2 allows for more room to adjust if needed.

Trade reasoning

The fundamentals are mixed. Hot weather is coming in the US, which raises demand, but supply is also exceptionally high, as seen here. Last Thursday, the EIA reported a net increase of 99 Bcf from the previous week, with stocks 653 Bcf higher than last year at this time, 73 Bcf above the 5-year average of 2,694 Bcf.

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/CLQ5 short strangle

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This is the first post in my shiny new options trading journal. Yippie!

I finally got approved for everything I needed at TD Ameritrade, since I want to keep using the ThinkOrSwim platform. I know it’s a bit heavy on commissions, but the platform itself is just so much better than anything else out there. Someone recommended that I use TOS Paper Trade to analyze everything, but to do the actual trades somewhere cheaper. I decided against this, but I’ll leave my reasoning for another post, since this post is about my first real trade.

Symbol: /CLQ5
Status: opening trade
Strategy: short strangle, JUL 15 47 P /-\ JUL 15 58 C (market at $52.72)
Days to expiry: 7
Max profit: $250

Trade reasoning

Things are not looking bullish for oil, it has dropped over 10% in the last few days. The supposed reasons:

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