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Potential US Natural Gas (UNG) Trade Has 5.36% Downside Protection

Feb 07, 2018 ( via COMTEX) --

US Natural Gas (<a href="">UNG</a>) is a good candidate for a covered call at the $23 level. The Apr 20, 2018 call at that price should fetch a credit of about $1.25, which means the entire position has a net debit of about $22.05. This trade has 3.64% downside protection. Another option would be to buy the UNG Jan 18, 2019 $18 call instead of holding a long position in the stock. This lowers the net debit to $4.44, but the position only has 3.64% downside protection. Technical indicators for the stock are bearish and US Natural Gas has a 52-week low of $20.40 and 52-week high of $31.84.

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