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Current Loss in Position (0.023 - 0.016) = $70.00 per contract
Additional Margin Req (406.70 - 313.80) = $92.90 per contract
So, based on current prices, I have used up $162.90 of my 2x margin cushion of $627.60. So, knock on wood, rub a red-headed boy's head, etc., etc., I still have quite a bit of cushion left.
Current loss in position (0.017 - 0.009) = $80.00 per contract
Additional Margin Req (285.10 - 171.2) = $103.90 per contract
Based on current prices, I've used up $183.90 of my 2x margin cushion of $342.40, so, I'm a lot closer to hitting my exit point with this position than the 6.9, which is funny because the 7.4 is [obviously] further away from being ITM.
So, for now, I'm going to sit tight. Please check my math and let me know if I made any mistakes.
mu2pilot
Can you help answer these questions from other members on NexusFi?
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
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Crazy, crazy, crazy, did i say crazy day in Natural Gas today.
Didn't want to clog up this thread, so posted the potential 14.2% range capturable today in this thread here.
mu2pilot, I'm still sitting tight with all my short options on both side, and a lot more comfortable than a few weeks back when the market was shooting above 4.5 and vol was going mental. The NG market has been really strange lately with the market dipping during the worst of the cold only to rally later, I was very comfortable going into yesterdays inventory numbers as it was common knowledge there was going to be a huge number so little room for a surprise.
Norm4X had this good advise which rings true on pg 274, ' Never exit a position immediately after an event that created a spike in volatility. I've lost more money adjusting or closing OTM trades on NatGas on Thursdays. If I would have waited until after lunch I could have adjusted or exited for a much better cost.'
With options usually better to let the dust settle and the wide spread retrace to normality before considering exiting or adjusting.
I felt exactly the opposite: Yes, a large number was expected, but what if the number was even 5-10% worse than that? The market probably would have gone crazy. So, I exited a bunch of my position before the report, and sold some puts before the report. That made me feel a LOT better. Then, 10 seconds after the report, I hit some bids on calls before they dropped. Going back to full size now seemed prudent.
The lesson for me: if I feel really anxious going into a report, simply reduce my size down to the no-longer-anxious point.
Why is the IV for the high strikes, >6.50, over 80%, but < 80% @ <6.50?
That is the #1 reason I got beat up so bad in Dec on the Mar NG calls far OTM. There was one day the 7 call moved up more in premium than the 5 call. Crazy.
As someone who is short calls, any drop, for whatever reason, is welcome relief
How important is the inventory number, as long as we don't run out by the end of March (which is typically the end of withdrawal season)? I see estimate of something like 1.2-1.5 trillion left at end of March, lowest in years, but not enough to run out. Maybe it is the fear of running out, or even coming close?
Last Feb-Apr the May NG contract went from 3.30 to 4.40 when NG inventory was only 6% below the inflated (because of 2012's high level) 5 year average.