Bull Call Spread in LNG turned against me.

music selection: “I Will Remember” — Queensryche

I had high hopes for a bull spread in Cheneire Energy (LNG).  I was set to more than double my money over a month based on an uptrend in shares since November.  The trend reversed and has moved down three consecutive trading days, including almost 5% today.  I found myself out of the money on both strikes and needing almost 9% by mid-February to earn maximum profit.  I decided to sell and recover what time value I could.

I bought the 62.5/67.5 bull call spread with 19FEB2021 expiry on 19JAN2021 for 2.3324 per share (17 spreads).  I sold today for 1.105 per share booking a 53% loss of 2,086 dollars.  It was an ugly 8 day holding period.  February is now pacing to come in at 3,074 in booked profits.  I still hope to turn a profit on VXX long puts before the month closes.

Devour your prey raptors!

Capitulate LNG spread

Never miss another opportunity to devour prey!

4 thoughts on “Capitulate LNG spread

  • January 26, 2021 at 9:51 pm
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    Why not roll the LNG position up and out?

    Reply
    • January 26, 2021 at 11:40 pm
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      Rolling a net debit spread that has moved against you requires putting more capital at risk in the trade. The market is telling me the new trend is against me and I’m not going to fight that.

      Reply
  • January 29, 2021 at 6:29 pm
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    I ask because I’ve had some success rolling a bad bet I made. I sold a couple of puts on CRM at the $240 strike right before they announced they were buying Slack. The stock dropped from about $260 to about $220 overnight. The put I sold for six bucks and some change was suddenly worth about $22.

    I recovered the vast majority of my losses by rolling the option to a future date twice, keeping the strike price the same. I’m still down about $1300, but I earned back about $2k of my losses rolling over the past two months. The stock has gone nowhere in that time.

    Reply
    • January 29, 2021 at 8:42 pm
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      Chris, that often times works on short (net credit) options plays. Long plays (net debit) always require more cash outlay and more risk to roll.

      Reply

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