This is a sample entry from Don DeBartolo’s email newsletter, Trade Spotlight: Spreads, published on Thursday, June 16, 2016.
There is a bear futures spread trade opportunity in the Natural Gas market on a potential M.E.T. breakout. Establishing a bearish position where a front month contract is sold and a deferred month contract is purchased. Anticipating the spread to widen negatively. Setting up a futures spread will potentially reduce the risk and volatility, as well as reducing the margin requirement, in this energy market. This trade is in line with seasonal tendencies as well.
Sell the October 2016 / Buy the April 2017 Natural Gas spread at negative 2.50 points using a stop order, GTC.
Initial Margin = $913
Maintenance Margin = $830
If filled:
Stop loss: Stop loss is negative 1.85, above a resistance level and today’s contract high (6/16/16), GTC. (Risk: $650)
Target: Target is negative 4.35, above the twelve month contract low (5/27/16), GTC. (Profit: $1,850)
Natural Gas Spread Chart
Contact your Daniels Trading broker by phone or email to place this trade.
Risk Disclosure
STRATEGIES USING COMBINATIONS OF POSITIONS, SUCH AS SPREAD AND STRADDLE POSITIONS MAY BE AS RISKY AS TAKING A SIMPLE LONG OR SHORT POSITION.
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