NG Jan put I'm holding expires on Wed, 12/24/08. Currently, it's in the money, so I'll likely get assigned a long position from 5.5. I'll roll this over to Feb long on coming Fri or Mon. As soon as I roll it over, I'll try to sell Feb 6 Call for 310 creating a covered call. In order to do that, NG has to bounce close to 5.5 I think.
Futures puts are a bit different from stock options because they are skewed to long side as everybody knows NG won't be free, but can go high with unlimited.
The real question is if NG continues to drop, where do I want to scale-in. I'd like to sell a 4.5 Put, but I'm afraid I am not able to bring enough premium. 5.0 for $3000+ premium or 4.75 for $2000+ premium...
Remember the margin on NG is pretty high and things can move very quickly. I've seen where NG made $100K equivalent move.
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