Monday, December 27, 2010

NG Update: WOW!!

What a wild ride. There must have been a large short position out there, or maybe somebody willing to take delivery was bottom feeding and snatching up at this price. Look at the volume and price action in the last 30 minutes of pit trading. I was happy to take a break even and 30 minutes later there was an $800 profit. It could just have easily moved that fast against me so I'm glad to break even here. I did end up selling the FEB 4.000 put option for .153 right as this move occurred potential good timing there. The FEB chart saw the same up move as the JAN so maybe that blows my earlier theory. I haven't been trading this asset class long enough to have an informed opinion.

Now check out this classic technical bounce in the chart below. I had the blue line for the FEB contract drawn before today's action. We bounced exactly on it. I was looking to sell a put in to this move and I did. That was a more conservative approach but a simple long at that support line would have yielded a $1000 profit in a little over an hour. The max gain on my put sale is .153 x $10 = $1530 but I'll have to wait 30 days!!

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