Two days of upwards move in the market but I highly doubt there are lot of traders out there who are convinced that we hit the bottom. My assumption is that we are fall from it so I believe it's much safer to play the call side at the moment.
So what's my trade for today?
#UNG (#UnitedStatesNaturalGas). It's gone through the roof today so I am banking on a bit of a reversal. I bought the June $31 put and sold the June $30 put (long put vertical). To finance the vertical I sold the $24 put.
UNG Daily Chart
Here is the profit curve of the trade:
As we can see, because the $24 put was $0.08 short of the cost of the vertical, if the price stops above $31 then I will lose $8. If the price stops between $23.08 and $30.88 then I will get paid. Between $24 and $30 the profit is $0.92, which is an incredible return.