NG trade

I entered my first futures trade today! I sold 1 e-mini December futures contract at $5. That contract is QGZ9 if you're curious (QG = natural gas e-mini, Z = december, 9 = 2009). Current spot price was around $3, Oct contract (which expires in about 9 days) was 3.20, Nov was 4.35. The Dec. contract ended up at 5.07 the last I checked.

This trade requires about $1300 margin, and for every $1 move in the contract price, I lose/gain $2500. With futures, you need to be aware that the required margin value doesn't change over time, but your Futures Buying Power does, and this is what determines whether you get a margin call (i.e. are forced to liquidate or add more money into your account).

Futures Buying Power = (Total account value (cash and futures positions) - sum of margin requirements for your open trades). So say you start with $10,000. Your account value and futures buying power are both $10,000. If you buy/sell 1 e-mini NG contract, your account value is still $10,000, but your Futures Buying Power is now reduced to $8700 ($10,000 - $1300 margin requirement). If the trade moves against you by $1, that's a $2500 move, so that means your total account value will be $7500 and your futures buying power will be $6200 ($7500 account value - $1300 margin). This trade would have to move about $3.50 against you for you to get a margin call -- i.e. the point when your account value drops to $1300 and your futures buying power is $0.

Here are some things I learned:

• I was wrong about futures trading 24/7. They usually stop trading at 5:15pm on Friday and resume at 6:00pm on Sunday. They trade from 6:00pm to 5:15 every weekday. However, hardly anyone seems to trade in the evenings, or even that much in the afternoon. So basically it ends up being not much different than stock-trading hours.
• The e-mini contracts have waaay lower volume than their corresponding regular contracts, and the spreads are horrible. E.g. when a regular NG contract is at $5.00, the corresponding e-mini contract might have a bid of $4.95 and an ask of $5.05, and a single trade won't happen for 10 minutes.
• Because of the bad spread, when an e-mini trade does occur, the trade price is usually 2-3 cents lower than what the latest trade of the regular contract was at. E.g. When my order at $5.00 went through, I could've gotten a normal-sized contract at $5.03 at that moment.

It might have been better to buy the Nov contract, since it will drop more within the next month than a later contract, assuming spot price stays the same or goes lower, but I thought I'd give myself a little more time in case their is a temporary spike here. I'm tempted to sell another contract, for a total of 2, but I should probably play it safe on my first trade.

I am hoping for NG to drop in the coming weeks (obviously) and to sell my contract at $4 for a $2500 gain.

Here's another interesting article:
http://www.zerohedge.com/article/why-has-natural-gas-spiked-60-labor-day