BOIL has become predictable - Page 7 - TigerDroppings.com

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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


Shorts gained and longs lost so far this morning.

Backwardation and contango. I get the two terms mixed up, but they are at play when contracts are rolled.






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sneakytiger
LSU Fan
Member since Oct 2007
1104 posts

re: BOIL has become predictable


So March settles below $5, with April trading at $4.50... after five-year highs seen just a week ago at $6+. All of that, yet UNG only drops $2.50 off its high a week ago. What am I missing? Is this people trading the fund around an expectation, not its actual holdings?


This post was edited on 2/27 at 11:44 am


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jlu03
LSU Fan
Thibodaux
Member since Jul 2012
385 posts

re: BOIL has become predictable


Just picked up DGAZ @ $3.70. This stock should be at $10 within a couple months.





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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


They bought high, and sold low to oversimplify. Maybe look at USL, or another 12 mos fund.


This post was edited on 2/27 at 10:11 pm


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NOTORlOUSD
Georgia Tech Fan
Chapel Hill, NC
Member since Sep 2010
4570 posts

re: BOIL has become predictable


I reversed this morning and bought UGAZ due to the ice storm predictions in the Midwest. I wish I had done it yesterday afternoon. I'll probably switch back on Monday.





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sneakytiger
LSU Fan
Member since Oct 2007
1104 posts

re: BOIL has become predictable


To answer my own question:







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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


UNG isn't done rolling yet, and one purpose of the swaps they own is to even things out a bit. There are usually a couple days every month the price of UNG is counter to the price of spot and the contracts. Spot is trading below April contracts currently.

Anyway, I took the opportunity presented today, and averaged down further on July 20/23 puts. I bought back the other side of the spread at a small profit some time ago. My reasoning is I don't want the spread limiting profit when and if things go south on natty gas.






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sneakytiger
LSU Fan
Member since Oct 2007
1104 posts

re: BOIL has become predictable


quote:

UNG isn't done rolling yet


What do you mean, they will continue to purchase Apr contracts? I see they have a lot of cash on hand... it'd be really interesting to see a historical day-by-day record of the their holdings and compare with their current portfolio.






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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


They have a pending NYMEX trade. The price keeps going up every day. The same place you got their projected roll dates, you can see their daily holdings. It's not at 4.51 anymore.

Pending Trades

as of 02/28/2014, subject to change
Shares Created/Redeemed 700,000
Security Action Quantity Price
NYMEX Natural Gas NG APR14 Buy 387 4.609



This post was edited on 3/1 at 6:58 pm


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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


UNG is selling 1605 NYMEX April contracts.

Anyway, I tried to load up more on the short side.

I'm short July UNG 20 & 23. Anyone else have a target price for UNG? It's really insane, July 20 puts are selling for under .25.

I read today an argument for ongoing higher natural gas prices, but I just cannot imagine that given the supply fundamentals coming online this spring.






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sneakytiger
LSU Fan
Member since Oct 2007
1104 posts

re: BOIL has become predictable


Into some $25 July puts for about $1.60. I'm no options modeler, but that seemed like a great price.





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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


I think we're winners on July puts. I'm going to start buying deeper out of the money puts. Probably no lower than 19.





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sneakytiger
LSU Fan
Member since Oct 2007
1104 posts

re: BOIL has become predictable


I was looking at the 20's last week because they're so damn cheap.





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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


I think $20 is fine based on where the historical price of UNG settles are certain natty gas price points.

I think natty gas heads down your puts are fine, but maybe I'm cheap. It's hard for me to pass by $20/$23 at .23 & .82. That's a lot of leverage for not much premium.






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sneakytiger
LSU Fan
Member since Oct 2007
1104 posts

re: BOIL has become predictable


Injection season can't get here soon enough. I think once we see the first monster storage build the market will snap out of it and we'll see capitulation.





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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


quote:

Injection season can't get here soon enough. I think once we see the first monster storage build the market will snap out of it and we'll see capitulation.


When it goes down, UNG will go down even quicker. I'll make a friendly wager on that. BOIL, which is predictable I guess, will drop so quickly it should really be entertaining. Especialy entertaining to you and I.






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jlu03
LSU Fan
Thibodaux
Member since Jul 2012
385 posts

re: BOIL has become predictable


With the so called bottom forming on Natty Gas, is this a good time to pick up DGAZ??





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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


quote:

With the so called bottom forming on Natty Gas, is this a good time to pick up DGAZ??


Some on here are high on DGAZ. Not the way I short things, I'm a buyer of puts instead.






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L S Usetheforce
New Orleans Saints Fan
College Station
Member since Jun 2004
16357 posts

re: BOIL has become predictable


Boil is gonna have some 10 dollar day swings for sure. Which means kold gonna have the same.


This post was edited on 3/6 at 8:07 pm


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Iowa Golfer
Iowa Fan
Heaven
Member since Dec 2013
1379 posts

re: BOIL has become predictable


LINK

COT report is interesting. I cost averaged down my UNG July puts today. July 24 UNG Put were going for about a buck today.

This seems so simple I keep thinking I have to be missing something obvious.






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