Saturday, January 25, 2014

Natural Gas, REALLY

(c) 2014 F. Bruce Abel

Even though it's early for coming out of my Groundhog Hole, I do have a blog that is supposed to talk about natural gas, and my hits this week are SUDDENLY high, even though I haven't posted for ages.  My thoughts are usually on trading from home.

My lesson from this week:  the one advantage a midwest home trader has over Wall Street is regarding natural gas, because weather hits the midwest before New York, and we can see and feel what's coming before the slash-crash manipulators sitting 100 feet from Wall Street, can.

So I bought 500 UNG (natural gas etf) and cashed out after a day or so (chicken).  Bought back in with 1000 and sold 10 calls expiring in two days, and picked up another $250 or so.

Profits from these trades looked wonderful in isolation, but they did not make up for my purchase of in-the-money long-dated calls (Cramer recommends this strategy in his new book, I am told) on Delta Airlines (DAL) purchased earlier in the week.  However, they have time to recover.

But, seriously, all hell is about to break out in the northeast as wave after wave of arctic weather sweeps through.  Curtailment, remember curtailment?  Manipulated prices and Enron.  Remember Enron?  A company named EOG, where the "E" used to stand for Enron, is one play Cramer recommends for this natural gas boom.  Check it out.