Saturday, August 10, 2019

Crazy week (it could have been worse) new trade implied by solar energy price crash

"Better positioned for next week?" Silly me:

That's a 100-point range in the S&P 500, and the futures markets in S&P were 50 points wider at least ...

This guy was at it again:



The market recovered most of what it lost and got back into the range where the neutral trades I have on have a chance to make a profit, finally, by the end of the week.

But the big news is the documentary I saw last week ... if oil and gas are now more expensive than solar, that implies that one could go "short" these two ... forever.

The two futures tickers involved are first, crude oil: /CL

And natural gas, /NG


These last two charts show the last 2 years of each commodity price ... had I seen the documentary shortly after it came out I could have been profiting all along!

Two possible trades:


  1.  short futures contract and sell 1 put against each contract
  2. short futures call option
These are equivalent, risk-wise (according to Tastytrade), but for /CL the short call takes less margin ($2800 versus $4000+ for the combination one above) ... 


More next week ...


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