Winter is Coming - Long UNL
As this terrible war grinds on, Europe and Asia are getting ready for winter by restocking inventories in the face of a supply squeeze caused by EU and US sanctions. Years of under investment in the sector due to political/ESG concerns combined with the sector's past corporate mismanagement making investors doubly wary has led to insufficient infrastructure in place to meet demand. Given the recent pullback from the recent highs and a positive testing of support, I feel now is the time to enter a position at this level with a timeframe of 9-10 months for my thesis to play out.
UNL is the vehicle to express my trade thesis because it avoids the risks of contango by using a 3 expiry framework instead of simple following the most current NG contract which can create contango risk at rollover.
Entry: $23.32 This is the avg of 3 tranches spread out from the $22.50 - 26.50 price levels. Today's price puke back down to support at $22.65 was the last fill. I am a swing trader and will be allowing this to run until spring. I will be selling covered calls throughout. I want to let this fish run with the line, so I may or may not sell parts of the position at major price levels. We are in market conditions where the price may not have much of an upper bound until demand eases in the spring.
I will update as this trade develops.
Good luck and god speed.
UNL is the vehicle to express my trade thesis because it avoids the risks of contango by using a 3 expiry framework instead of simple following the most current NG contract which can create contango risk at rollover.
Entry: $23.32 This is the avg of 3 tranches spread out from the $22.50 - 26.50 price levels. Today's price puke back down to support at $22.65 was the last fill. I am a swing trader and will be allowing this to run until spring. I will be selling covered calls throughout. I want to let this fish run with the line, so I may or may not sell parts of the position at major price levels. We are in market conditions where the price may not have much of an upper bound until demand eases in the spring.
I will update as this trade develops.
Good luck and god speed.
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