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April 23, 2012  Mon 10:16 AM CT

The decline in the U.S. Natural Gas Fund has been impressive, and one large trader doesn't see a recovery in the near future.

The UNG exchange-traded fund trades at $14.72. It is up 2.2 percent on the day, but that is off of Thursday's low of $14.25. Shares were above $50 last June and have put in a steep and steady decline since then.

More than 60,000 UNG options trade already today, more than twice the daily average. Much of that action is in a May put spread.

More than 19,000 each of the May 16 and 15 puts have changed hands in a large spread, according to optionMONSTER's Depth Charge system. The May 16s were bought in big blocks of 13,315 for $1.59, while the May 15s were sold for $0.87.

The spread is clearly looking for the UNG to remain below $15 through expiration. This really isn't a bearish trade so much as a bet that the fund won't bounce.

The position cost the trader a net $0.72, so the maximum potential gain is $0.28. The trader can theoretically profit with the UNG anywhere below $15.28 at that May expiration. (See our Education section)
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