I saw something of a bullish weather related shift. I am on the fence as to whether or not to add more UNL. I think the market still needs time to settle from the winter blast. Production:
As we can see, the production numbers are quite out of alignment. Demand is the same.
Either image shares a link to the BlueGold Trader article the images came from if you’d like to give them a visit. Anyway, as you may have already seen and heard, the market swung hard to under-supplied for quite some time. According to Bluegold, the market nearly swung back to a balanced market. At least this is what the data they are receiving shows. This data is only a sample of the entire market and may be harder to trust than in times of fundamental stability.
It does appear the market is settling down and with a Sunday gap up, the market may be interested in a bottom here. Based on EIA info, $2.75 is getting quite close to a historical low vs storage. Also, the light blue dots are 2019, when storage was building faster than the 5 year and the market was anticipating more of a surplus. I would say right now it is hard to tell which way the storage scale will tip. I think power burn will be ever more important this summer. LNG will of course steal the spotlight if there is another LNG global glut. I’ll be keeping these in mind when summer approaches.
As for my positioning………..
Based on this move, which is a rather strong one, UNG can move about 1.83 times faster than UNL, and BOIL 3.44 times faster than UNL. I did a quick calculation in excel.
Based on the amount of UNG ($95.7), and BOIL ($23.86) that I’m currently holding. I would need roughly a total of $257 to offset these short positions. I am currently holding $406.05 purchased shares worth of UNL, which would make me clearly long biased.
gotta go, apparently all hell is breaking loose and I must go.
I will be holding my positions steady today. Good Luck
I made one more adjustment to my account this morning. I shorted 1 share of BOIL. Know that I’m going to add at least 10 shares of UNL once the market opens.
We’ll call this the start of something new. I strategy I’ve been wanting to focus on for a while and have always been distracted by many many things in life.
So… We’ll call this a new beginning. You’ll see, in the screenshot above, “Position Ratio”. I want to keep UNL at 75% right now in order to make sure I stay long biased on the trade. I still prefer to remain bullish about the market, and let UNG/BOIL try to make me a little by decaying in price in relation to my UNL long position. At some point I should track this on a spreadsheet. Maybe weekly so I have enough time to actually keep track of it vs daily and missing every other day.
With that said. I’m going to add 10 shares of UNL to my positions at market open, this is to offset the 1 BOIL share that I shorted. I’m also interested in adding because prompt gas pricing is down below $2.75/MMbtu.
I’ll update the post when I get the shares. As for the gas market. I have seen a few things on Twitter that could indicate the market could move lower. If that is the case, I’ll be ready to add a little more to UNL. 10 share for today. Good Luck
Sorry the post is a bit sideways today, I do have a day job too.
So I use WordPress for this website. Anyone who’s used WordPress might know that plugins can cause headaches. Apparently Worpress updated and a plugin had a problem. I was not able to log on to fix the problem, but finally got it straightened out.
Since my last post, I’ve dumped all my long equities positions. Many of them are still quite good choices, and am still hanging on to a number of them in my 401k account with much larger positioning than in Webull. Just know this for I still like these positions and certainly like the growth that has come from them thus far.
I’m still holding my UNL/UNG positioning.
If you want to see my list of equities, go back to my previous posts and check out the screenshots. For now, I’d like to just manage UNG and UNL in Webull.
Anyway, by isolating my Webull account with just this trade, I can see how each position fairs; I can also watch how the trade is affecting my account balance without having to write down all the numbers each day in a spreadsheet. I’ve always liked this trade, and my switch to BOIL/UNL at some point, but for now I’ll keep going with UNG/UNL.
Main reason for trading UNG/UNL. I need to focus on 1 thing and this makes the most sense. The trade can be a macro managed trade, with slow changes to the positions. In fact, I might start getting serious about adding a little UNL back on. I actually should have reduced another 10 share, but was spread too thing to realize this. Now that that is taken care of, lets see if this one trade can generate some capital growth within my account.
My positions will remain what is shown in the screenshot above until I feel gas prices have stopped falling. Even without a paid subscription, one can still keep track of the market. Macro View! It should be quite boring, as long as it makes money. I’ll focus more on this UNG/UNL trade more in the next post. Good Luck today, it’s EIA report day.
I sold these yesterday. They appeared to be moving a bit too fast. I’m sure I’ll regret it… I would sell calls against them if I had enough shares… This would be the reason for selling down my positions. I want to take a position large enough to sell a covered call. I was looking at EKSO earlier, maybe I’ll just take a chance on that one in my Webull account. I have enough funds to do that this morning.
I’m still not very keen on the relationship between call premiums and Implied Volatility (IV). To me, EKSO seems ideal at this moment. You have a stock that is trending up. Their financials don’t look all that great, but appear to be recovering nicely. After visiting their website, it appears they are heavily independent upon the rehabilitation industry. This would mean COVID would have a large impact on their business more than just sales of essential equipment, like pace makers. People need pace makers regardless of COVID; people can’t necessarily wait for rehab, but maybe it gets delayed anyway…. That’s my theory, I’m sure if I read more, I would know more, durrr.
Anyway, so there’s this stock price trending up and has a huge spike, then falls back in line with the trend higher. This spikes IV and spikes call premiums? I prefer weekly expirations right now, but I’m going to live with this one being monthly. 2/19/21 expiration is offering roughly 7% premium against EKSO 10 strike calls. These are slightly ITM, where I want to stay to have more CYA protection. I guess that would be CMA (cover my ass).
Of course I could sell some vertical spreads or diagonals; of which I will be absorbing more of to become more comfortable with the idea. Right now I just have a higher level of comfort with the covered calls. I would like to do more with SLB again, but SLB is at the top of the channel, so I’ll be waiting to see if they will come back a little. If SLB will fall back to a more ideal position and continue higher, I’ll dump everything to try to maintain a covered call with weekly expirations against SLB. We’ll see. Now I’m just rambling.
Buy 100 EKSO – Sell a 10 strike call with 2/19/21 expiration. Hopefully sell for enough to be covered to $9 on underlying and hope for roughly 7% max gain premium.
As for gas, I’m lost without my data. The last thing I saw was something about the EIA projecting production to increase. haha! the market will be back to oversupplied in no time… Good Luck
I’m going to take a break from trading gas. Just when it’s starting to get good, I know… Fate or God one are telling me to stop. Maybe find myself or something. I’ve never given much thought to chi/internal energy or anything. I know I’m not having any fun in life, and it’s making me cranky (every day). I never did come up with a way to run gas trading on auto pilot. Maybe because I always got too excited and bit off more than I could chew.
The site will still be here, and I’ll still make some trades and share them. I will not be talking about where I think Natgas is headed. I will still share changes in my account (when I buy or sell). I reduced my UNL position down to 40 shares from 50 shares yesterday at $8.26. I am still short 10 UNG. It is hard to gauge how much UNL vs UNG short I should own to stay long biased. Currently 3.3 to 1 value should be getting close to evenly split, and leaning a bit long sided still.
If you’re going to keep trading gas and feel lost. Remember to keep an eye on storage surplus/deficit, and the market’s ability to create more or less of a surplus to the average. Prices will skew lower when storage is moving toward or deeper into a surplus; Prices will skew higher when moving toward or deeper into a deficit. Winter seems to bring on 1 panic buy and then done, without any meaningful winter demand. Stop going long, expecting winter to bring about some kind of crazy bullish market.
Don’t trade only Natgas if it causes you to bite off more than you can chew. Keep positions small.