I was not using a margin multiple, but since most of the ROI's here are based on multiple. my calc would be excluding brokerage:

$10/ ($48.40x3) = 6.89%/15 days till expiry x 30 days = 13.77%.

Which on straight RoR is a very worthwhile return at negligible risk. To make closing out and establishing a new trade a fair move one would need to find a comparable trade at similar risk.

If we factor in any brokerage fees as well that can have a dramatic impact. For me it depends on which broker.

With Deepdiscountrading if I let my options expire worthless there are no exit commission or exchange fees, only half up front.
With DeCarley trading, commission is up front , so that doesn't factor but also get charged exchange fees around $ 2.5 either way.

So as another example lets say we have 10 x NG 6.4C at 0.01 to buy back , that will free up $484, not a significant amount of margin, with DeCarley it would not make a difference but with DDT that would cost about $23 as opposed to letting them expire. That means to find a better home for the $484 , one would need to find a option giving better than 16.94% over a similar time frame( factoring in the 10 x exchange fees)

I'm just looking at it from a numbers point of view, I know there are times I have closed early for small money because I need the margin for other trades or just to tidy up and there is definitely a nice feeling banking profits on buying back and moving on. And each trade may have greatly varying factors and reasons to close.

Again it goes back to my original question of if you were only basing you analysis on the original margin requirements or factoring in the reduction that occurs on wasted options.

So, the early estimate for 1/16 report is a withdrawal higher than any week in the past 6 years? I guess it makes sense, based on the bad cold snap we had.

It will be interesting to see how the market reacts, assuming this big estimate is already baked into current prices.

The -285 last Dec was the highest in history.

The recent movement of NG prices just shows me how screwed up the futures markets have become. Inventories well below average, extreme inventory drop coming and prices drop below $4?

We are just pawns in game played by players with billions. True price discovery is gone.

I'll get off my soapbox now.

Very difficult to know but I suspect that a large part of last week's sell off was caused (or at least started) by the enormous commodity index rolls taking place. I have seen estimates ranging from 35,000 to 100,000 contracts of NG selling/rebalancing.

NEW YORK, Jan 8 (Reuters) - Brent crude oil will see nearly $3 billion in fresh buying and gold more than $1 billion from the annual rebalancing of the world's two largest commodity indexes beginning Wednesday, a spokesperson for the indexes said.
Allocations toward U.S. crude oil will fall almost $3 billion while natural gas takes a cut of nearly $1.5 billion under the changes to occur over five business days at the Standard & Poors Goldman Sachs Commodity Index and the Dow Jones-UBS Commodity Index.

Reweightings to start Wed and occur over 5-business day cycle

The recent movement of NG prices just shows me how screwed up the futures markets have become. Inventories well below average, extreme inventory drop coming and prices drop below $4?

Hey Brit I think you might have something off here

The $7 spread is H4-Z4 but Mar14 expires in about 50days on 20-Feb not in 8 months.

If you meant Mar15, then Z14-H15 spread is less than $2.50, but Z4 but does expire in just under 11 months.

The spread has reduced from 7.00 to 4.50 and I have closed out the position for $2500 per spread profit.
The spread tested 4.00 twice but has held and I think it may widen again if CL gets a decent pullback.
I may consider re-entering if it gets back to 6.00 ish.

Brit

The spread has reduced from 7.00 to 4.50 and I have closed out the position for $2500 per spread profit.
The spread tested 4.00 twice but has held and I think it may widen again if CL gets a decent pullback.
I may consider re-entering if it gets back to 6.00 ish.

Brit