July / December NATURAL GAS seasonal spread:
As we head into the summer months, we tend to see a rally in Natural Gas as suppliers and traders deal with the unknown of supply and demand issues and trade the front months accordingly (JULY). As June approaches and supply and demand for the summer becomes clearer, these same concerns tend to shift focus more on further out winter months (DECEMBER). This seasonal shift would be supportive for a short front month / long back month spread.
- SELL the JULY contract
- BUY the DECEMBER contract
Premium of -0.77 to the BUY side … last trade 0.77 1/2 points
- Risk will be -0.72 … ($500.00)
- OBJ will be -0.87 … $1,000.00
(we want this spread to WIDEN once filled)
Initial Margin for this spread is roughly $1,080.00
It may not be possible to limit losses to the exact loss limit depending upon market conditions and the possibility of limit moves.
Have a look:
Follow the Moves of a Technical Trading Expert
I am a seasoned market technician, and with the Cullen Outlook newsletter, you can follow along with every trade I make. You will receive concise, easy-to-understand trade recommendations directly from me. I will tell you what I am trading, why I am trading it, and how I am trading it. Make informed decisions and take action with confidence. Sign up for a free subscription to The Cullen Outlook.