Wednesday, June 10, 2009

Want Gas?

Here a snapshot of the US Natural Gas ETF, UNG, option string for July.
If you're just interested in picking up some premium, this might be a candidate.
A buy/write on the 13s will drop your net exposure down to $ 12.30 and based on a current price (as of this posting) of $14.00, the 13 call will pay out .75 or 5.7% fro 38 days exposure.
The options have a robust open interest while UNG itself trades about 50M shares a day recently.
The options trade in nickel,dime spreads, but my experience is that limit orders placed at the mid Bid/Ask point will get filled and save you a few bucks.

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