As stocks go down again, people are dying to raise cash again to prevent margin calls by selling commodities and buying dollars. I don't usually keep much money more than I need in my trading account, but since my loss is getting bigger in Lumber (limit down today, ouch!!) and I just established a new Nat gas, I need to transfer some from my bank.
The margin on NG is about 9K and I don't know who set 9K for that. Many brokers are making money by giving little or no interest for customers money that's just sitting. I bet exchange and brokers are feeding each other by forcing margin. (or how clever??)
I honestly have no idea about what will happen. People who have been holding their retirement funds or any during all this down move, got some relief in the past few weeks, but they might start thinking 'Should I cover all?'', 'It can't go lower!', or 'I'll buy some here.' I just don't know. All I want is my lumber to go to 300! In order to do that, I think we need to see stocks bottom out first. Still a long way...
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I think I might be ready for NG and lumber...although, I'm not even sure if I can even trade lumber in my account! I'm definitely not getting quotes for lumber right now. Not sure if I can justify paying $55/month for the CME datafeed. Which NG put would you recommend now?
Lumber is the safest (can I say in trading?), but can be a lot of headaches with pit accounts if you don't have one already. Lumber will also take a long time before going up, so you can wait out more if you want to. It's a free fall now.
On the other hand, NG is very thick and has tight spreads between bids and asks. You seem to have a big account, so this should definitely work better if you can handle the risk.
I sold 1 Feb 5 put for 2.1, but if you want to start small, you can sell feb 4.75 put for 1.5 (maybe 2?). Another day of dropping will get you filled. Remember NG report comes out at 10:35AM ET every thursday. You could get a better fill or miss out. The choice is up to you. FYI, Feb options expire within 8 trading days, so out-of-money options' value will decrese pretty quickly.
I use GNG (globex nat gas) sysmbol in my trading platform.
You probably already know this, but in futures options, never use market orders.
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