NG options are crazy. It's currently trading at 5.1 area and options for 12 Calls are selling for 0.015 (or $150). I think this is really free money. Chances of NG doubles in 26 is really none as it'd be similar for gas price to jump from $3/g to $6. Even if it gets there as long as it stays below 12, you get to keep the whole premium. Sure, you'll make more money if you catch from 5 to 6, but I'm talking about probability here.
The beauty of selling options is you make money;
1) If price goes in your direction, or
2) If price stays in the same, or
3) Even if price moves against you, as long as it doesn't go in the money.
Accordingly, I sol 9.5 call for $510. I'm thinking about selling more as with this cold, this is one of very rare opportunities.
Thursday, January 30, 2014
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