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Hello,
just curious if anyone is selling OTM options on NatGas or oil considering the near-record volatility levels? I looked over the last few thread pages and haven't seen much discussion on oil.
I did see what appeared to be some talk of people getting caught short on the Nat Gas volatility explosion recently-was anyone selling options with NatGas at record low volatility before the price spike?
Hi Myrrdin,
Curious as to what the premium was when the vol was sky high and what you closed them for? I see vol is still fairly high, so did you just collect the time erosion instead of waiting for a vol collapse to profit?
Where you worried that vol might go even higher against your short option (although I don't think it could have gone MUCH higher, lol)?
I sold the strangles for $900 each and bought them back for $500. Meanwhile volatility has risen again. I only held the strangles for about two weeks in November - to short to collect that much time erosion.
The reason why I bought the spread back was the high risk holding it for about one year to collect 60 % of the profit, after I had collected 40 % of the profit in just two weeks. But I might enter this trade again.
Myrrdin, so did you sell options with a year to expiration? Why did you choose to go that far out vs. the typical 30-60 days to exp.? What would have been the difference in premium?
I sold the strangles for $900 each. With 30 - 60 DTE the premium for these strikes would have been approx. 0. (I do not consider 30 - 60 DTE as "typical". I prefer to have 90 to 120 days.)