Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I have 59/61 24DTE /CL CALL spread and 62.5/64.5 53DTE CALL spread open. As it is still has some paper profit, I don't have plan to liquidate it unless the risk parameter is hit (paper loss x2 total premium).
As for Natural Gas, I have /NGH8 C5 position opened 1 week ago.
The CLZ C59-61 have a very low value of only $20. I am not sure if this is worth the risk of a loss of $2,000 for almost a month.
The NGH OTM Calls are probably the most dangerous option to go short that I am aware of. In case of a cold blast volatility will rise significantly, and the value of the calls will explode. Keep in mind that the probablility of La Nina is currently estimated at 67 %. There is a good reason for the high premium of these options. And there is no free lunch in trading ...
CLZ 59/61 was opened @ DTE64. With 5x size, total premium US$300 and BPE = 2300, ROI = 11%. Normally I target at least 20% return. It is true it is difficult to justify.
For me, the most dangerous OTM call is on /GC with a very low win rate. Natural gas market is dominated by giant players, not retailers. These giant players have the capability to pull in a lot resources and parking there waiting for the cold blast. Fading the news is generally a not too bad idea.
I recently entered a long position via futures, currently covered by KCZ C1.30 . I intend to buy the calls back in case of a strong move upwars of the future before their expiry.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
I agree. Vega risk on these is probably as high as the delta risk.
Natural Gas market is dominated by some Giant Hedge Funds and Trading Desks. Most of the real users are either highly constrained by regulators (ie utilities), or have price risk to the spark spread not gas outright (generators). If you'd like to see what happens when it does get cold go and pull up some March Call Prices or read some of the messages around here from Winter 13/14.
Not saying this is a bad trade, just seconding @myrrdin that it's high risk/high reward.
Keep in mind that next week - due to the change from daylight saving time to standard time in Europe this weekend - the open of the exchanges will be one hour earlier.
Good day to you!
I have just read an article about coffee. It says Brazil has record high of coffee trees this year. It is waiting for some rains in the coming weeks. If no rains these days, small speculators will flood in to take long position. When it eventually rains, coffee price will drop significantly - as what's shown in the seasonality tendency chart.
Any way I want to have a try. But which one is the Brazil coffee? I saw two coffees here.
Hm, why do you play it this way? Wouldnt it be better to buy deep OTM Calls? Or the Premium is allready to high?
Regarding my Portfolio, rightnow.
Had to scrap my big CL Position on Break Even, just view days before breakout. Did not like how speculative Buyers aggressivly buyed everythnig up to 52.50. But i kept some Long 60 Nov. Calls(Margin reduction, (IB)), ca 20 Days til expiration. They have now almost doubled the Premium.
Still holding Gold Call Ratios, very comfortable in that Postion. Looking vor reasonable Premiums on 900.
Strangled Grains after USDA, got very good premiums on the Call Side.
Sold Cotton Calls 70 and 80 Strike, and added some more on Volatility Spike recently.
