Is it Too Late to Get into this Monster UNG Trade?
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Is it Too Late to Get into this Monster UNG Trade?

John Carter 12/6/2013

Hey everybody, this is John. Welcome to the free video for Simpler Options. We're going to talk a little bit tonight about natural gas. You might be asking, why are you talking about natural gas? I thought this was an options trading strategies site. Well it is and one of the things I've found is that with a lot -- at least there's a handful of these set ups -- is that you actually need to look at the underlying futures contract.

If we look at the daily chart here you can see that we actually, you know, the moving average is turned up, we've now broken out. The monthly and the weekly charts have turned higher which means we'll get a minimum of about three weeks of upside without a major pull back. I mean just looking for a pull back in that EMA. And if we look here at the weekly chart what I'm looking for here is, before the thing really peters out, is a rally of equal length and magnitude right here which would take us to about $4.48 in the actual futures contract.

So what does this mean?

Well it means that it gives us an opportunity as option traders to participate in this, the options on UNG. OK. So again, this is the minimum upside move I'm looking for, is to 23. There's a chance it could actually go nuts. OK. But you don't want to bet on that, you want to bet on probability. So if we can get up here that's where I'd take off most of my positions. So how do we play this? So UNG, this is how I do it.

Now here's what I like to do, like when we establish the position -- we've been talking about this one in the recent webinars, in the live trading room and the nightly newsletters -- is I like to buy kind of 100 token shares of the actual ETFs. That just shows me where we started getting interested in this. And then I bought some shorter-term calls, the $18.00 in the money calls...just looking for kind of a quick flip. So this would be appropriate if like, you know, if you got a $10,000.00 account. And you see something like this is great. You can buy 10 contracts. We're flipping it out you can see at this point.

You know, if you had a $10,000.00 account that would already be up 10 percent right on this one trade with not a lot of risk. And then for longer term, you can see that I got these 134 days out. I bought 230 -- what I did is I took the same amount of money and put it into each play...give or take. So I bought 230 calls at about 3 bucks, and then for 67 cents I could buy about a thousand. And again putting the same amount of money into two different ones.

So why do I do it this way?

Well first of all at 134 days out there's not much Theta decay. OK. Secondly, when I was talking about that target, you know the $23.00 target and stuff like that, if we get into there the first thing I'm going to do is I'm going to sell all this. OK. That's the money -- the kind of the money angle there and when to take that profit. And then here if for some reason we can kind of keep on going I would scale out of this one. Because if this thing turns into something where natural gas really just explodes higher -- which is always a possibility, you know. I would trim this of course but leave some on because the idea with this is that you get that 10 bagger. You know you're looking to see if this can get to $6.70 on something that's a real run. That's where you can make a ton of money. Now in addition there's a ton of shorter-term opportunities that are setting up in a lot of different ETFs.

In addition to UNG, there are five other ETFs that are setting up as whale trades, OK, where you have the potential for 10 baggers. I'm going to be covering these on a class that we're going to be doing on Saturday. OK. And this is the Saturday class, going to be talking about ETFs and I'm going to be talking about what key markets to use for your analysis of ETF trades, the brain dead guide to buying ETF options.

Is this class only for seasoned options traders?

The class is perfect for the new options trader because we're not going to be doing any complicated spreads, no complicated Iron Condors. You don't even need to know anything about options in order to do this class.

We're going to be talking about wealth building trades that can dramatically elevate your trading account, how to become a consistent options trader, why ETFs are the best way to catch the coming explosion in silver and gold. These...these are going to be huge moves. And believe it or not, part of this is going to be because of Bitcoin. I'm going to be talking about that on the Saturday class. How you can use ETFs to take advantage of the coming spike in oil prices. This is actually just beginning and this is something that you're going to want to also to get in on. How you can use ETFs to hedge against a crashing US dollar. That is something that is going to resume. And find more trades that have the potential to turn into 5 and 10 baggers. And of course if you can't attend this upcoming Saturday, that's fine. You'll get a recording of the class and you'll get it uploaded shortly after the class is done, And you'll also get a DVD of the class.

A couple of things to think about on this class is in addition to what I would call the whales which are important -- that's like kind of potential change your life type trades -- if you can get them correctly. But it's the idea of generating income on shorter term trades where your long calls or long puts, so you have the least amount of risk. There's no disasters that can happen because you know, your account's not going to go negative like if you're short options, all right. And then going from there. So that's a lot of the stuff that we're going to be talking about.

So if you're getting this you're entitled to take this class at a discount. We will be posting this on the site at $1497.00. And if you're getting this you can get it for $497.00. And that's this Saturday which is December 7th and it's going to be from 12:00 to 4:00 central time, which of course is 1:00 to 5:00 east coast time. In addition to this, you actually get a series of homework assignments.

If you're brand new to options and you've never traded them, don't worry. You're going to get a link to our free Options 101 class with this purchase. And secondly and most important, you're going to get a link to 4 books that I think are essential reading for all traders. They're not going to be what you think they are. You'd think that they'd be more trading related books, but it's -- no, it's more about life attitude and a lot of really cool things -- they're the 4 books that have had the most impact on my life, and that will be part of your homework as well. Now I know the class is already on Saturday, but believe it or not these books are short reads. If you could just read one of them before the class that would be great. And of course you could read the other ones after, but they're short reads. You could read each one in a couple of hours.

Anyway, I'm looking forward to seeing you guys. For those of you that dare to take the plunge and dive into this, I'm looking forward to seeing you there. And again, you just go to And it's going to be focused on two main types of trading. One is going to be 3 days to 10 days. There's specific set ups where you can make income. And that's kind of, you know, really kind of building up a steady equity curve on the small account. But really what I think is going to be amazing for 2014 are these whale trades that are setting up in these various asset classes, and the safest way to take advantage of these is going to be ETFs. A lot of people try to catch these in futures and they always get destroyed. Because the hedge funds screw with them and run stops. They can't do that with the ETFs. All right, I hope that helps. You guys have a great night and we'll see you at the next update.