Crude/Nat Gas Spread: Take Some Money Off the Table

Best of Both Worlds

The IMC blog entered a long position in the December crude oil/natural gas (x2) spread at -$20,000 (premium nat gas) on August 5th, purchased a second spread at -$15,310 on August 11th, and purchased a third position was entered at -$13,690 on August 15th.

The spread recently soared to the highest level since May, but it is now turning over.  Is this just a temporary pullback after the explosive rally?  Or is it over?

december-crude-oil-natural-gas-x2-spread-daily

December Crude Oil Natural Gas (x2) spread daily

The more important question is do we cash out or hang on?!

The nice thing about having multiple positions is that we can take partial profits.  It’s not a binary “in-or-out” decision.  It really is the best of both worlds.  So that’s what we’re gonna do here.

Trade Strategy:

On the long December crude oil/natural gas (x2) spreads entered at -$15,310 and -$13,690, take profits at -$12,000 or better.

 

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