Sold 1 Aug NG 4.25 Call for 0.255 or $2550

I sold 1 Aug NG 4.25 Call for 0.255 or $2550 (covered call).

The more I trade my new day trading strategy the more I like. As said earlier, I'm going to try to exit most of my long term positions pretty aggressively.

NG Update

The following June NG options all expired worthless profiting $5750 (less commissions)

Sold 1 July NG 4.5 call for 0.158 or $1580 (covered call,5/4/09)

Sold 1 July NG 5 call for 0.207 or $2070 (covered call, 5/8/09)

Sold 1 July NG 3.5 put for 0.210 or $2100 (6/4/09)

I'm looking to sell Aug options now. I'll be pretty aggressive selling because I like to start going back to day-trading that I've been practicing on.

NG roll over

Today, I rolled over NG from July to Aug.

Sold 3 July NG at 3.863

Bought 3 Aug NG at 3.988

I'm still holding 1 July 4.5 Call, 1 July 5 Call and 3.5 July put. Tradestation wants me to roll over out right contracts today, or they will be liquidated even though they are covered call positions, which is very stupid. If for some reason, NG skyrockets, and I get assigned on those calls, I have to sell it again and pay additional commissions instead of simply letting them offset by futures long.

I'm not happy with them for sure. What's more interesting is, their clearing firm is RJ O'Brien, but RJO lets you hold it until expiration day instead of 3 trading days prior. Often times, the very next month value goes down significantly in the last three days of the front month expiration, which I could have benefited if TS let me hold.

Anyway, I'm looking for selling calls if we do have any bounce. NG chart pattern looks good, but price just doesn't follow. Too many people are long UNG (nat gas ETF) and maybe that's why we can't rally.

Patience

I really need to be patient. After big drawdowns, it's attempted to get out at break-even or small profit, but I'll never make a good trade if I do so. I must be patient.

Natural gas lagger

I read a lot of Natural gas news about how good it is to buy now. It sounds great since I'm holding, right? In all honesty, I don't like it at all. I actually think that's exactly why Nat gas can't rally. I don't know how many people got on the recent crude rally, but most of people I know are just watching the markets lately. They want to buy energies, but they feel that crude is overly extended. Also, if stock markets drop, chances are commodities will drop as well.

I'm a big believer of leader and lagger in the markets. There are stocks (or markets) that don't go down as much as others in a bear market. Those usually start rallying faster and more than those got beaten down. I think crude is definitely is the leader and nat gas is the lagger. When crude goes higher, nat gas either stays or up a bit. When crude goes down, nat gas goes down even further. While nat gas can rally while crude goes down, I don't see this happen just yet. I don't know when it'll come. I'm just afraid, the market correction starts and before nat gas starts seeing any rally, it would drop. 

Yesterday, I placed a day order to add lumber at 196.50. I thought I was filled since it settled at 196.3. However, when I checked this morning, I didn't get filled. Not to mention, today Lumber went limit-up to 206.3. It was a good buy because Lumber recently went up crazy and has pulled back consolidating around 195-200 level for a few days. It looked like a textbook bull-flag to me. 

Anyway, too much whining here. I hope everybody has a great weekend.

Outlook

I haven't written about the markets for a long time. I'm not sure how much to talk about.

I stopped day-trading for now. It has been profitable, but with a full time job and trying to force something during lunch hour or day off(s) here and there are jut not working well. Besides, the more I trade, the more I think swing and position trades are where big money can be made. 

Accordingly, I closed all of day trading accounts and simply moved all the money to an out-dated TradeStation Future's 4.0 platform. This platform is probably what you saw sometime in 2002 where you have to manually type the price. No bracket or DOM. Charting doesn't have zoom in/out not to mention with no real time update. But I keep this because I can trade pit-traded contracts. Besides, RJO (TS' clearing firm), knows futures options trading very very well. 

I tried to change to Interactive Brokers and move all of my positions. RJO has been around for a long time, so they know what they are doing. What RJO told me was when futures transfer happens, options would go out first and the next business day cash will go out. When they receive, they receive futures positions first and receive cash next day. What IB told me was, they can't accept my position without cash transferred first. I do understand just in case of market collapse. But as they requested, I sent them my statement proving I have 10x more money sitting at RJO, which will be transferred. So screw it, and I'm going to just stay with Futures 4.0. 

Ironically, this helps me not trade something I didn't plan. Day-trading with this platform is impossible. I may move to IB in the future, but probably not until I get out of NG or LB. 

-NG-

Speaking of NG, I'm still holding 3 long futures, 1 put and 2 call options. Before, I didn't make up my mind between inflation and deflation, but now I'm convinced on the inflation side. I should really hold on to NG. Risk is big, but so is the reward. If this stays volatile, I can keep bringing more premiums from options. Downside is limited to 0 and upside is more likely. At this point, I'm not sure if I will get assigned on 3.5 July put, but I'm okay either way. If I do, 4.5 and 5 calls will be worthless keeping all the premium. I'll wait for a bounce to write Aug calls. I like to see above 5 and I ultimately like to have a runner with a break even stop.

-LB-

I've been holding Lumber for about a year and half. That's absolutely crazy. It's been moving up except today being almost limit-down. It went up too fast too much recently, so this kind of pull-back is necessary. As for targets, I'm not sure. I'm really attempted to get everything out at 230-240, but that shouldn't be the way I'm supposed to trade. 350 price level is likely even without inflation, but I don't know if I am that patient. I still have this bad habit of taking profits too soon, while take big stops. I must admit I'm still more patient on losers.

-Stocks-

I'm surprised to hear many miss the recent move up since March. I thought I was the only overly cautious person thinking we'll quickly turn and test the bottom with no time. What's more surprising is many people think we'll test the bottom soon. What are the markets doing? The exact opposite thing. If I didn't know anything about the markets, I just have to listen to so called gurus, but I'm still not an expert, but I'm not a newbie either, so I'm confused between. 

I like to see stocks go up, but it'll probably just range-bound during the whole summer. If stocks sustain in the range, commodities will shoot to the upside. However, if stocks do get sold, commodities will be de-leveraged again just like before.

I finally bought some gold stock on my Roth IRA. This account is so small that, I care less about it. If gold goes, chances are dollars go down, but I'm hedged. 

Sold 1 July NG 3.5 put for 0.210 or $2100

Today, after NG report, NG dropped, so I sold 1 July 3.5 for 0.210 or $2100.