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  • I did my arbitrage long NG short UNG 5 comments
    Aug 24, 2009 1:03 PM | about stocks: UNG, NG


    I shorted UNG at 11.54 and made a long at 3.279 in NG october.

    I did prudentially 50% of arbitrage I'm willing to do, so if it take more premium I will add some position, if will reduce I won't take a profit quickly and I will wait more.

    I think I did the arbitrage around 14,5% premium. So I will close not before of a 11/10% premium.
     

    Themes: natural gas arbitrage Stocks: UNG, NG
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Comments (5)
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  • Chicago Rick
    , contributor
    Comments (33) | Send Message
     
    Danny.......we are making some $$ this afternoon. lets hope commonsense prevails and this premium keeps contracting. Rick
    24 Aug 2009, 03:30 PM Reply Like
  • Danny Devito
    , contributor
    Comments (85) | Send Message
     
    Author’s reply » Yes when I opened the arbitrage UNG was performing 0,4% better than NG octtober and at end of day was performing 1,95 less than future, so went down the spread of 2,35%.

     

    We will see tomorrow (:-)))
    24 Aug 2009, 04:07 PM Reply Like
  • Chicago Rick
    , contributor
    Comments (33) | Send Message
     
    Looks like about 1% of the premium came out. I think I made a tiny bit on the cad/usd as well with the hnu. plus I was a tiny bit biased towards being long on gas. all in all not too bad for a position that at least SEEMS very low risk. do you think I should leave that bias in for now or rebalance it to neutral? I don't really believe gas has bottomed but it sure looks oversold for at least the very short term.
    24 Aug 2009, 04:28 PM Reply Like
  • Danny Devito
    , contributor
    Comments (85) | Send Message
     
    Author’s reply » UNG website is still not updated, we will know in few hours.
    24 Aug 2009, 05:50 PM Reply Like
  • Danny Devito
    , contributor
    Comments (85) | Send Message
     
    Author’s reply » Listen, take it as bullish signal... but today I closed my calls sold short and closed my long positions with a small loss, because the premium of 14% play for bears and is too risky, So I think UNG will have very very big difficulty to go above 12 (option strike) and 12,69 past support.

     

    So at the moment I play like this:

     

    1. arbitrage UNG/futures leverage half of my capitals dedicated to UNG
    2. long UNG short USO (I will sell at 0.3550 50% of the bet)
    3. waiting for a 10.60/75 area to sell again puts on UNG or act buying shares, but now with an eye on the premium where it is...

     

    with a premium at 14% have no sense to invest in UNG, you can buy UNG and at least sell options. But the options yeld is very few for the calls so I think this is another bearish signal.
    24 Aug 2009, 05:53 PM Reply Like
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