Monday, March 5, 2012

UNG Spread Closed

I thought UNG had a chance to form a bottom.  I put on a   July 6 / 8  call back spread for a credit.   The basis for my trade changed when UNG did a reverse split.    I sold the 8 calls (which would require 32 strike  and rode my 6 call (24 strike for  a few days as it collapsed.    Today I closed the trade for basically even money.  -$2.00 with commission.

This trade emphases why spreads can be a great bottom fishing tool.  I turned out to be very wrong, and everything went against me.  However, because my position was  a spread trade I end up okay.   

I closed the position here because it was no longer worth the time monitoring as my upside was only $16 

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