Natural gas is exploding

Thanks, Bone.

I usually have LN hidden on the IB platform, but just for kicks I called up some sample puts (image). The LN and ON last/settle prices are probably meaningless (IB seems to take forever, esp. on Friday), but LN does display, at least partially.

When I'm ready, it sounds like I'll need to talk to IB again to get a final Yes or No on availability.
 

Attachments

  • LN and ON at IB.PNG
    LN and ON at IB.PNG
    14.8 KB · Views: 67
I think ON is the screen option and LN is strictly OTC or floor traded. I have never heard of an LN-trade being executed electronically. If you want access to the LN markets, you may need to set up an OTC/Clearport account with an FCM outside of IB.
 
ogarbitrage said:
I think ON is the screen option and LN is strictly OTC or floor traded. I have never heard of an LN-trade being executed electronically. If you want access to the LN markets, you may need to set up an OTC/Clearport account with an FCM outside of IB.
More...

I used to get LN market quotes two ways: 1. Through IM messaging with the various OTC brokers, and 2. I had a turret system with direct lines to those same brokers, and in "listen" mode I could usually hear what was trading.

Important note: both of these functionalities required a bonafides check and approval from the brokers. Since I ran a group at a HF, this was not an issue. And since the brokers pay for the line charges and they also control whom they choose to IM, just trying to somehow spy on all of this without participating is not an option for you.

All of this will be very unlikely for you unless your account is really really really chunky. The point about the brokers is that when you say "sold" - you damn well take them second thoughts or not. Never hang one of those guys. There are no "mistakes" or "misunderstandings". Word gets around fast.
 
bone said:
I'm not sure that IB clears Nymex Clearport products - but I sure as hell know for a fact that Timber Hill trades the living shit out of them.
More...

Can't hear the words Timber and Hill put together without bile filling my mouth. What they did to Larsen and Veiby was a fucking disgrace. At least they were finally cleared a while back.
 
"Limited peak supply contributed to substantial increases in New England natural gas prices and basis on high-demand days this winter and last winter. New York City reduced spikes in prices and basis by adding pipeline capacity and by using retail demand curtailment, solutions that could help New England as well. Companies have proposed pipeline expansion, but getting the financial commitments to move forward has been difficult because the additional capacity may only be necessary for short periods during the year. Pipeline expansion may become more viable if baseload consumption of natural gas to generate electricity continues to increase. The high January 2015 forward basis for Boston indicates that market participants do not expect a resolution to these peak supply issues before next winter."
 
Has anybody been watching the spreads? Talk about a huge spike in the front month when there is bad weather hitting. This is not real cash, but I have been tracking a few of the spreads and performing well trading the calendars on NG and CL. Lots of interesting stuff!
 
FCXoptions said:
Has anybody been watching the spreads? Talk about a huge spike in the front month when there is bad weather hitting. This is not real cash, but I have been tracking a few of the spreads and performing well trading the calendars on NG and CL. Lots of interesting stuff!
More...
What are you looking at for your entries & exits?
 
LCFXTRADER said:
What are you looking at for your entries & exits?
More...

I am doing a lot of learning currently so I don't have a set method, but I downloaded a ton of data on NG spreads from Bloomberg at school the other night then I have been checking the average spreads and seeing what is normal and what isn't.

Basically, I just ran some numbers in excel and figured out the spread was around average for that point in time. I figured weather might come into play again soon causing a spike in the front month which would really increase the spread. So long March and short May when the spread was .188, then closed out this morning when the spread hit .441. I flipped the position shortly after but had a problem with one of the orders going through. I think when it filled, the spread was at .445, so relatively close to where I got out. I am down since we flipped but not by a significant amount.

I could have flipped too early, in which case it could really make a big move against me. We will see. Either way it isn't real money, but it is for a grade and good practice. So hopefully I will really be able to learn something from it. The fluctuations seem to be decent daily. It was 10 contracts on each side and we went from break even to a $16k profit in no time then back down to a good bit less then up to $20k today. Lots of movement.
 
You must log in or register to reply here.
Back
Top