Natural Gas
Bull Spread Example
You anticipate disappointing U.S. Q3 GDP data today, and that this will have a negative impact on the short-term price of natural gas.
In this example the underlying natural gas futures market is trading around 3.495 and you decide to trade a daily Bull Spread.
Choose Market
You believe the price of natural gas will fall in the short-term so select a Daily Bull Spread.
You choose:
Natural Gas 3.000-4.000 (2:30PM)
This Bull Spread will expire at 2:30pm today.
Complete Ticket
You choose to Sell because you think the natural gas future will be below 3.490 at 2.30pm.
You select 2 contracts at the bid price of 3.490. Each pip the price moves is worth $1 per point.
Your Maximum Profit and Loss are displayed automatically.
Your trade's 'floor' and 'ceiling' is 3.000 and 4.000 respectively.
The most you can make is $980; the most you can lose is $1020*.
Monitor Trade
Your position will expire at 2.30pm.
The difference between Nadex's calculated expiration value and your opening price of 3.490 will determine your profit or loss.
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Profit
At 2.30pm, Nadex's calculated expiration value for natural gas is down at 3.230.
The difference between your opening price (3.490) and the expiration value (3.230) is 260 pips.
Multiply 260 by the number of contracts (2) and the contract value per point ($1) to calculate your gross profit.
260 x 2 x $1 = $520**Fees apply
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Loss
At 2.30pm, Nadex's calculated expiration value for natural gas is up at 3.780.
The difference between your opening price (3.490) and the expiration value (3.780) is 290 pips.
Multiply 290 by the number of contracts (2) and the contract value per point ($1) to calculate your gross loss.
290 x 2 x $1 = $580**Fees apply
More examples
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Commodities
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Stock Indices
Bull Spreads
Bull Spreads are simple derivatives suitable for traders looking for high leverage and hedging opportunities.
Bull Spreads
Step by Step Guide
An in-depth guide to placing your first Bull Spread trade, from the first step to the last.