NG rollover

I rolled over 1 June NG to 1 Aug NG.

I normally just sell at market and buy at market, but this time I tried to time by selling June contract and wait to see if it drops down a bit so that I could buy at a lower price. Stupid me, it started going back up before I bought the Aug contract, so by the time I bought it there was a gap of $100. Had I bought immediately, I could have saved $100. Lessons learned.

Sold 1 June NG at 2.650
Bought 1 Aug NG at 2.763

NG at 2.5 month high

I have still debating between two ideas:

1. Selling one at b/e outright while holding the other for more profit if we ever get there.

2. Write 1 call options for a few hundred $$ profit while holding the other for more profit.

I'd like to get Jul 2.75 calls for $2500 or more, but I don't see much inflation in calls yet, which is probably good if options you're holding is well in the money and you want to swap it with a lower cost option since premiums are low.

I think buyers are still cautious and a lot people are still betting on shorts, which is maybe why we're going up. Now once buyers start coming in, we'll see inflation of calls, gap up of 4-5% overnight, $3000+ moves etc easily...

Today's move is very nice. I'm wondering if we'll close strong or just fade out. There are stops sitting around 2.6, so the logical area to go right now is 2.6 and up. Huge stops sitting above 3, which is the game changer in my opinion and that's what I'm aiming at....

PS. In 20/20, I'm kicking myself why I didn't buy at 2 and why I didn't add when it pulled back to 2.4... This explains why I'm not a good trader.

Pull-back expected in NG

We're sitting above 2.4 right now and today's inventory data came short of the consensus (30 vs. 34), which is a good news for bulls. However, I see this is a profit taking opportunity. We had a huge run from the 10 year low to where we're. The best possible scenario is we hold 2.4 level for a few days and do another leg up. Resistance becoming a support, right?

I'm looking to sell calls, but premiums are just not there. I need a few solid days, meaning open at the low of the day and close at the high of the day. Remember those thick green bars??

Another good news is Baker-Hughes gas rig count shows we're sitting at 611. I think 600 is the magic number just like that's what lots of traders are looking for. I'm wondering if tomorrow report will show below 600. However, note that with the new shale method, even at a low rig number, efficiency is quite high, or producers can quickly start producing again.

Early Summer cooling demand is another thing to be looking forward to. It seems power outage does a big role in nat gas consumption and/or a lot of companies are changing from coal to nat gas to produce electricity. Now that Winter heating demand was very disappointing, I'm hoping Summer demand is high.

Regardless, it's still a long way...

NG at a critical area

Nat gas is at a critical area. We had a bounce off the 10 year low, but not that significant imo. 2.4 is a huge resistance because it's not just prev low, but also if we break and close above (preferably 2 days in a row), it'll be a higher high. We haven't had any higher high and higher low for a long long time in Nat gas. If this turns and head back down, I expect a new low.

Let's close above 2.4 and 2.6. Then above 3. We'll see more short coverings and new buyers. I'd be fine if it bounces around between 2.2 and 2.4 for now!  Still a long way regardless.

NG roll over

Roll-over time already!

Sold 2 Apr NG at 1.983
Bought 1 May NG at 2.075
Bought 1 June NG at 2.19

Note that I rolled over 1 NG to June, which is two months out. I did this because not only I think it will take a long time to pan out, but also, to avoid a negative spread often found in a front month contract. What this means is if NG is going up, chances are front month contracts will likely up go faster, but on the other hand, if it goes down, it'll go down faster. Since I'm holding two contracts, I'd like to spread out a bit.

As of today, I'm about -$14,210 YTD. Ouch.

NG roll over

NG made 10 year low today. I don't think my puts will be out of money, so I just rolled NG contracts from Apr to May.

Sold 2 Apr NG at 2.191

Bought 2 May NG at 2.285

My new break-even based on May contract is 2.692

Next week

The Apr options expire on 3/27. My 2.45 put is well in the money. From that position, I'm +$500 or so, but was +$1400 at one point. I was hoping after today's inventory report, it'd go up, but the opposite was true.

The overall theme of NG is that it goes up very little and comes down hard easily. I liked the way it acted over the last few days. Very quite, narrow ranges, not much up or down, which means it was bottoming.

That didn't last long. We're about 5 cents away from the 10 year low. With 3 days to go, my put options will probably be assigned a long position, so I need to roll over on 3/27. At that point, I would be holding 2 longs with the average price of 2.596. Once I roll to May contract, it'll be around 2.7 due to contango.

NG can get very volatile from time to time. I feel as if all I need is two to three solid days. To make that happen, we need some sort of news. At this level, buyers are definitely sitting aside and commercial sellers seem to lock whatever price they can get. Weather doesn't seem to help much and neither does the rig count. They are certainly worried about overflow of underground storage tanks.

A question I keep asking myself everyday is should I add or just sit out.

I'm also looking at other contracts too. It seems both Wheat-Corn trade and Gold-Platinum are available again. I'm hesitant on this because TOS doesn't give you any margin break on spread unlike other good brokers. In addition, what if I need more bullets on NG...

Apple puts also seem interesting. Everybody likes Apple stock. People who lost money in others bought all the AAPL they can afford and sitting on them. If this starts coming down, I think you'll see 550 pretty quick. Chart patterns already look like topping. I'm thinking buying an out of money put and simply forget about it risking 100%.