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Posts Tagged ‘Rollout’

Rollout on UNG

Posted by mounddweller on October 15, 2009

I rolled out my UNG puts again this morning.  However, this time I did it with a different strategy in mind.  As you know I originally sold UNG $13 several months ago.  Since then UNG has never come close to getting back above $13.  For the past several months I have been able to buy back the prior months puts and sell re-sell the $13 puts one month further out. 

Unfortunately, for whatever reason, this month that strategy wasn’t going to generate a very profitable trade.  I was only going to be able to generate a $0.15 credit.  So, instead I decided to bite the bullet and roll down and out for a net debit.  Here’s the trade I made:

BTC – OCT $13 puts for $1.80

STO – JAN ’10 $11 puts for $0.95

As you can see this resulted in a net debit of $0.85 ($850.00) coming out of my account.  Why did I do it?  Well, first off in looking at the chart it appeared UNG had hit the lower leg of its Bollinger band on Wednesday and bounced higher today.  Thus, my thought was if I rolled down and sold the $11 put I would be able to profitably buy it back later this month as UNG went back up towards $12.  Secondly, if that doesn’t happen I will still be in a much nicer position to manage the trade going forward.

I was able to execute this trade and still maintain a small overall profit on my UNG position.  Below is an updated version of my transaction summary.  As you can see I still have a $1.20 profit.

Blog UNG Position

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Rollout on UNG

Posted by mounddweller on September 17, 2009

Guys,

First my apologies for not having much to say lately.  With the market up so much I haven’t been trading any CC/NPs.  I’m still waiting on that long overdue pullback.

However, with expiration coming up tomorrow I did go ahead and rollout my NP position in UNG another month.  Specifically I bought back the SEP $13 puts for $1.25 and sold the OCT $13 puts for $1.75.   This generates a 3.85% ROIC.  This is my 3rd month of rolling out for a net credit.   Below is a listing of my transaction history for this trade.  Note, my net cost is now down to $10.93.

UNG - Transaction History

Regards,

Troy

PS.  I’ll be running my VISIONS screen and will post anything that catches my eye.

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