Parture
05-14-2020, 06:22 PM
Natural gas will go negative in the near term June contract (2020) that expires near the end of May. Take one contract at a factor of 10,000 and short it all the way down till the last day of trading May 27th, and get out preferably in the morning otherwise the broker may force liquidation sometime latter that day (May 27th). Let's guess. Short at 1.70 today May 15 and cover at -$20 (guessing it will go to this negative price) for a total value of 21.7 x 10,000 = $217,000. Not bad for one contract. Let's say the price doesn't reach my negative target, and even goes up to $2. Then you lose (2.0-1.70) x 10,000 = $3000 US.
If you put up $8000 US that is the amount you need for margin protection to 2.03.
At 1.00 you make $7,000 US
At 0.50 you make $12,000 US
At 0.10 you make $16,000 US
At 0.01 you make $16,900 US
At -20.0 you make $217,000 US
If you put in 50 contracts and cover at -20 that is $16 million which includes your starting capital.
If you put up $8000 US that is the amount you need for margin protection to 2.03.
At 1.00 you make $7,000 US
At 0.50 you make $12,000 US
At 0.10 you make $16,000 US
At 0.01 you make $16,900 US
At -20.0 you make $217,000 US
If you put in 50 contracts and cover at -20 that is $16 million which includes your starting capital.