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.
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.
Trade Type: Custom
Strike: $24 (short put) / 30 (short put) / 31 (long put)
Expiry: 17 Jun
IV Rank: 65.3
Cap Req: $806
Annualised Prof at Expiry: 2%
I also closed a couple of positions:
Let me know your thoughts.
Massive drop on the last day, which chewed up my profit.
The stock stopped at $23.68 so I made $1 on this trade.
That's not gonna make me rich but it's better than losing money :)
I also rolled the $24 put to $25 for $0.18 credit.
With just a bit over 1 week to go, I now have $0.33 credit in the trade.
Break even $23.67 and $35.33
My max profit is $1.33
Now that the stock is at $29.50, I bought the June $30 call and sold the June 31 call (bought call vertical) and financed it by selling the June $34 call. This trade gave me a credit of $0.14.