Stocks & Commodities V. 34:10 (20–22): Option Writing And Seasonal Tendencies In Nat(ural) Gas by James Cordier

Option Writing And Seasonal Tendencies In Nat(ural) Gas by James Cordier

The inexact but powerful tool of seasonal price forecasting really comes into its own when paired with the strategy of option selling. Here’s a perfect example.

Seasonal tendencies in the commodities markets can be tricky to grasp. But you need to at least familiarize yourself with the concept, regardless of whether you’re trading in the futures, option, or equity markets. What exactly are seasonals?

Seasonal price tendencies or “seasonals” are the tendencies for prices of a particular commodity to move in a certain direction during a particular time of year. While tendencies are just that—not to be taken as a guarantee since prices can move counter-seasonally—they tend to occur because of the cyclical nature of supply & demand. In other words, prices tend to move in a particular direction during particular times of year because of underlying fundamentals that tend to occur during those times of the year...