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As some of you have mentioned today's NG market feels a lot like Aprils, which ended very painfully for me when I sold low priced safe looking calls when things were quiet, eventually rolling the position up a number of times until I had a very unbalanced position in my accounts vs the rest of my positions. Eventually getting to the point of having that feeling that if this goes up any more it could get very ugly fast, reaching my pain threshold I decided to cover everything, and as you can guess that was right near the top of the market for by far my biggest lose of the year.
The experience made me sit back and think a lot about what had happened and what I needed to do in the future.
Some of the things that stood out were that I had absolutely no problem rolling up to greater and greater numbers of higher calls but I was absolutely shit scared to switch sides, go with the trend and sell some puts, I remember thinking if I had just switched to the other side of the market early on it would have been a different story all together. I also rolled in the same month at increments of 20-30c , that really never got me out of trouble, it just prolonged the pain.
The other thing was I was blinkered into thinking I had to roll the loss up in the NG market only. I think a lot of people have that same issue, sticking to the market they have the loss in to try make good.
Anyway roll forward to today I was sitting with short Feb 4.6C and 4.9 C's from mid Nov, NG takes off and 6th Dec I need to roll some positions, but instead of rolling up I bit the bullet and rolled some up and a lot down into 3.5P and 3.6P, learning from my previous experience. Of course the longer a trend persists the harder it is to switch sides so early is better.
Yesterday I needed to roll some more instead of rolling up 20-30 c I rolled way out , into the next month 6C as well as taking a good chunk of the loss and selling options in a spread of other quieter markets to cover that loss, breaking that fixation of having to make it back in the same market.
So compared April, still some pain but I'm really pleased I applied some of the things I learnt, avoiding ending up with a painfully large position, smaller and portfolio better balanced, and importantly staying rational.
Just thought I'd share that as it might help some of you grappling with this current wacky market thinking what you need to do or haven't experienced how painful this NG market can be before.
Looks like another move up today!
I am long March futures from 3.572 since Nov 6, which obviously plays well. I am also short the curve and there has been some pain lately.
I am short Mar14 6 and 7 calls and will roll some puts higher up a little.
Will get interesting as soon as it hits (IF) April 29 / May 1 highs at 4.669 (March contract that is). Continuous is already getting there and I wouldn't be surprised it does so today. In such a case we can easily see 5.000 print, especially if we break and stay above the 4.470 strong resistance area in the front month…
the Feb underlying today has behaved differently during the US night than it has previously during the week. earlier in the week it edged lower each day, it edged up today.
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Seems like the consensus for today's EIA release is actually a 84/85 BCF drop in stocks (and not 90 as I previously said) versus just 8 BCF last year, and a five year average of 76 BCF.
Prices rallied 4-5c over night and then another 4c in early morning trading (~645am Central).
NG consumption by electric companies was above coal during the low NG prices of 2012. But coal surpassed NG starting fall of 2012 and has been above NG all of this year. So it looks like above 3.50 is a point were switching from NG back to coal happens.
What I need to do is have a third line on this chart with NG prices. Any ideas how to do that in Excel?
