Theta Trend

Yesterday, October 25th, my stop was hit on an open credit spread in Gold (GLD) and I closed the vertical for loss.  The Natural Gas trade (UNG), however, bounced off the stop level and I never received a signal to exit the trade.

Gold (GLD) Credit Spread Discussion:

In the chart of Gold, you can see that price jumped up to our average true range trailing stop and hovered around that level for a couple of days.  On Thursday price finally closed above the stop level and that was the signal to exit the trade on Friday morning.  My hope was that price would fall back down, but hoping should never be the basis for trading decisions.  At any rate, I closed the 132/137 Call spread for a loss of $45 including commissions.  You can check out the exact trade details on the Credit Spread Trades page.

Natural Gas (UNG) Credit Spread Discussion:

For the time being, the Natural Gas credit spread is out of trouble.  For the first time since I put the trade on, I have an open profit on it (of a whopping $5, but whatever)!  My stop level is still at 18.35 and I am short the 18/14 Put Spread.  We’ll see what happens.  The most recent high on the daily timeframe is around the 19.85 level.  Natural Gas has hit the 19.85 level twice in the past few months and it also corresponds with the 200 day moving average.  If UNG can get above that level, I would expect prices to move higher.  In the meantime, I’m still long Natural Gas and my stop is around 18.35.