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1 month NAT GAS option setup
Started:October 17th, 2016 (03:53 PM) by leszczu Views / Replies:271 / 13
Last Reply:November 25th, 2016 (04:03 PM) Attachments:8

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1 month NAT GAS option setup

Old October 17th, 2016, 03:53 PM   #1 (permalink)
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1 month NAT GAS option setup

Hi,
quite a long time ago I started FGBL option journal. But for months Ive been strugling with it. That push me to constantly look for another trading methods. From few months I trade NAT GAS with monthly options.
It is very simple indeed and looks like this :
1. Im looking at monthly and weekly chart and Im trying determine next month range. Im estimating support and resistance zones.
2. Im taking position immidiately after expiery of previous setup (possibly ittle earlier if margin allows.
setups are little modified collar:
-1 Call
+1 outright
+1 put
plus credit spread from upside

3. as market is moving Im adding additional setups (the same ) to cover the bigger range
4. So basically instead of trying be a sniper Im using shotgun here to target big profit zones (200-300ticks)

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Old October 17th, 2016, 03:53 PM   #2 (permalink)
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Old October 17th, 2016, 03:58 PM   #3 (permalink)
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Current month position.
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As you see, I have currently 6 outright. On the right of the picure you can see estimated profit at the day of expiry.

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Old October 18th, 2016, 08:04 PM   #4 (permalink)
Market Wizard
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leszczu View Post
2. Im taking position immidiately after expiery of previous setup (possibly ittle earlier if margin allows.
setups are little modified collar:
-1 Call
+1 outright
+1 put
plus credit spread from upside

I'm not sure what you mean by "plus credit spread from upside" but a traditional collar is +1 Put, -1 Call and is inherently bearish.
Adding an outright to this turns it into a call spread (since +Put+Outright=+Call) which is inherently bullish.

leszczu View Post
Current month position.
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As you see, I have currently 6 outright. On the right of the picure you can see estimated profit at the day of expiry.

Thats +5 Puts, -6 Calls, +6 Outrights, so it looks like your missing a put.
Here's you PnL chart, plus what it would look like if you add a put, and how that compares to some call spreads.
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Old October 18th, 2016, 08:05 PM   #5 (permalink)
Market Wizard
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Futures Edge on FIO

Are you a NinjaTrader user?

 
Sorry.. chart is plus 265 put not 260 put

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Old October 19th, 2016, 04:37 PM   #6 (permalink)
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I give you an example from this month.
outright 2676
2.65P 90
2.7 C 92
2.75 C 71
2.8C 53

1. You buying collar 2.7C-2.65P for a ~25tick upside, then you selling 2.75C and buying 2.8C for a 18 tick credit.
2. Worst case <2.65 you losing 8tick, max upside 2.7-2.75 24+18 tick
3 This way you creating profit zone with big profit and minimal downside.
4. Idea is to stack this setup across maximum range ie this month profit zone is 3000-3350.
5. You can use 2x2.75C for a bigger profit, thats what I usually do.


Last edited by leszczu; October 19th, 2016 at 04:47 PM.
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Old October 19th, 2016, 04:39 PM   #7 (permalink)
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Im also writing naked puts/calls, but only at the begining of the month. I have methods to cover it if nesesary.

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Old October 19th, 2016, 04:45 PM   #8 (permalink)
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I made additional covering of 2.9-3.1 zone, and increased profit at 3350.

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Old November 4th, 2016, 07:15 PM   #9 (permalink)
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Ive finished october setup with max loss (outright <2.9). It could have been easly avoided, but unfornately i didnt foreseen move of this magnitude 3.3->2.7 in just one week.

November brings few improvements in my trading. Most important is a change from futures/options to pure option trading. The reason is severe drawdowns after/before us session.
Another change is the way im calculating position, now Im using layers in excel. Every position is unique and has unique PL. Now even complicated portfolio is easy to understand and can be easly modified.

Basic trading idea remains the same, Im stacking setups with limited loss, but instead of collars Im using put spreads and bear spreads. Theres also a place for few naked shorts, but only from side with bigger potential profit.

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Old November 4th, 2016, 07:20 PM   #10 (permalink)
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poznan / poland
 
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Current setup. Obviously Im looking for a rebound to 3+ area. Then Im going to hedge downside. If market didnt move there Im going to close written calls 3+ and open them again lower to reduce loss.

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