You're welcome 8800.  

Mild winter/QC – Yes, I said that – we looked at the maps in yesterday's webinar.  

Submitted on 2016/10/25 at 10:12 am

/NG/CRS – The contract just rolled over to Dec (/NGZ6) and demand outlook isn't looking good on mild weather and hurricane season was a bust and it was getting ahead of itself anyway (which is why we stopped being long the Futures). 

Doesn't change our long-term outlook, which is export-driven.  

By the way, it's not about how much of our supply – it's about how much of our surplus will go.  Currently, we have 20Tcf of production and 4Tcf in storage which means we're using a good part of 20Tcf so, if we are going to export 2.5Tcf (7 x 365), we will very quickly, NEXT YEAR, bring Nat Gas low in the 5-year storage range and, then next year, unless we significantly ramp up production, we could actually have a shortage!  

On top of that, they plan on putting out cars and trucks that run on the stuff – yikes!  

This map was our buying premise for last year:

So now we're up to $3 and Japan is down to $6.60, which is just what we expected to happen and that's how we're targeting $4 at the end of next year as more LNG gets shipped and global prices begin to equalize.  

Dollar/Latch – I love "analysts" who start their premise off with TA and then begin to project what will happen if the TA move comes to pass.  It's like a OBGYN predicting you'll need to buy a lot of sports equipment and prepare for sports-related injuries because you're going to have a boy and he knows this because you are wearing blue.  

Traders have pushed the dollar higher based on their confidence of an approaching divergence in central bank policies – that is, a tightening by the Fed even as other systemically important institutions such as the European Central Bank, the Bank of Japan, the Bank of England and the People’s Bank of China maintain or intensify their loose stance.

Today, seven decades later, despite the broad global trend toward more flexibility in exchange-rate policy and freer movement of capital across national borders, a “dollar shortage” has reemerged. Indeed, in many developing countries, the only thriving market for the past two years or so has been the black market for foreign exchange. Parallel currency markets, mostly for dollars, are back.

The dollar shortage has become acute in countries like Egypt, Nigeria, Iran, Angola, Uzbekistan, and South Sudan, among many others. In Myanmar, where exchange rates were unified in 2012, the parallel market for dollars has been reinvigorated.

JO/Jeddah – Well were talking about /KC in particular, not JO but, as a new JO trade, I like:

• Sell 5 March $23 puts for $1.20 ($600)
• Buy 10 June $23 calls for $3 ($3,000) 
• Sell 10 June $28 calls for $1.40 ($1,400) 

That's net $1,000 on the $5,000 spread that's $1,400 in the money to start.  Upside potential is, of course $4,000 (400%) in only 8 months, so a nice way to get started and a low commitment to buy 500 shares of JO at net $24 ($12,000), worst case – and very easy to roll, of course.  

CLF/Jeddah – Near as I can tell, the quarter caught them right before they pushed through a rate hike but after coal prices jumped on them so a big margin squeeze in this snapshot of the business.  They made $62M after taking $36M in non-recurring charges and you can buy the entire company for $1Bn after an adjusted $100M, "weak" qtr.  Thank you sir, may I have another is what you say to this one!  

In the LTP we have 30 2019 short $5 puts we sold for $1.50, now $1.95 (as well as 35 short 2018 $4 puts we sold for $2.80 in the last panic), let's add 30 2019 $4 calls for $2.60 and we're not even going to sell covers yet.  

For the OOP, let's set up the following position:

• Sell 10 CLF 2019 $4 puts for $1.40 ($1,400) 
• Buy 20 CLF 2019 $4 calls for $2.60 ($5,200) 
• Sell 20 CLF 2019 $10 calls for 0.96 ($1,900)

That's net $1,900 cash on a $12,000 spread that's $2,200 in the money to start.  The upside potential is $10,100 for a 531% return on cash and the worst thing that can happen is you end up owning 1,000 shares of CLF for net $4.25 ($4,250).  This is a very nice trade and we will be adding to it if CLF goes lower!