Morning Thoughts – Covered Puts

My KOLD covered puts are not part of my Webull example account, but I wanted to share because it is still gas related trade.

I also have a couple LABU covered puts that are just “hanging in there”. I was playing with LABU on the chart, plotting where I shorted it and the current break-even price for each position. I’m exceptionally well to protect the position, or the options premium is rather.

I’ve shared here this same visual relating my KOLD position on a chart. The pink and yellow lines represent the covered puts I’m currently holding. the lines begin on the day I entered the trade, at the price I shorted each trade. The line extends to where my break-even price for the current expiration date of the put I’m holding.

This visual shows me what kind of trend I can withstand if KOLD moves against me. Sometimes I just focus on price and this helps me to see price and time. Typically all things correct with enough time, and right now KOLD is doing a little of that. The main objective is for gas related demand to stay strong, storage surplus to be swallowed up and to make money on my long bias. If that does not happen, I need to protect the position. Having these lines on the chart, can help with this. If the trend is still against me by 12/18/2020 for my 45 strike expiration, I may need to roll the put higher, or maybe consider exiting.

KOLD covered puts Break-Even line drawn for each trade with projected expiration break-even prices.

Positions and then one last thing before it disappears. So I reduced UNL; the position was rather large, and I just don’t do big wild positions for long anymore. I feel like I’ve sized UNL to the a comfortable position and will ride it out from here.

My positions as of pre-market 11/25/2020

UNG/BOIL/NGF21 all look like the chart below at this moment. OK, well NGF21 looks a bit different because the data is different for NG rather than ETFs. But UNG matches well enough to call it good (this time).

So, On the 2 hour chart there has been slight pull back to the 20MA. I’m going to long UNG at 10.4 with 100 shares for the hell of it and placing a stop close by at 10.30. It will have to be a mental stop until the market opens, as stops are not allowed or some BS on the stock exchange until regular market hours. What a ridiculous rule for the digital age. Anyway, UNG has already pulled back and broken above the top of that preceding red candle. The 5 min chart is trying to break down as I speak, so I’ll keep as close an eye on it as I can until market open. If I really wanted this, I would stop at 10.20, but I’m not budging. 10.3 is where I will stop out. I have enough confidence to go long here with a quick trade, but I want to keep losses small if it comes to that.

UNG on 2 hour chart at Tradingview.com

All my positions above, I’ll be holding until Friday. If the market jumps Friday, I may make a change. have to wait and see.

The UNG trade I’m making this morning, I will hold it as well if it gives me some breathing room. If it goes to 10.5 and stops there, I may just dump it. 10.6 and I’ll hold and keep my stop where it is. The key is for the price to continue trending higher, with higher lows and higher highs.

I hope that you have a great Thankgiving or just a great day overall. Good Luck

Oldinvestor

I almost forgot; The EIA report is today. Should be at 10:30 est. time unless I’m wrong… Investing.com is showing 12:00 est. time.

http://ir.eia.gov/ngs/ngs.html

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