there are ways of profiting from this and other products with
negative roll yield so long as you play it from the short
side. There's nothing about UNG, USO, VXX that make them
bad vehicles you just have to be aware of the shape of the curve
and how the rebalancing affects the price
Well UNG is based on futures, but 60% of all the futures for Nat
Gas are created strictly to "run" UNG. That
makes the whole ETF very suspect, and the fact that it doesn't move
with price of Nat Gas.
That said, I like your idea of playing from the short side,
although I don't think there is any "negative" UNG ETf, like QID
for QQQ
Posted by lessarda on 16th of Jun 2011 at 03:31 am
The futures have tried to crack and hold the 4.80-4.90 area five
times since December, failing each time with decent pullbacks
following the failures. Obviously heavy selling in that range and I
don't think it's come down enough here to be safe buying without a
good trigger (losing the 10 & 18 day MA's recently on the
futures isn't constructive).
Plus you have cool weather so far this summer and continuous new
supplies discovered/brought to market, both bearish. Finally, the
oil/n.gas price spread has been historically high and that would
argue either for oil to come down or gas to go up...looks like oil
coming back down is more likely here.
That said, it held up really well today vs. oil, so maybe it
will defy gravity...
Whats with all those forms i got from UNG for tax
purposes? I held it in and IRA so do I still need to fill out
that paperwork? thanks in advance for any input here.
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Only reason is because it
UNG - Just an observation
Posted by steveo on 16th of Jun 2011 at 03:14 am
Only reason is because it is likely to go up in the near term.
probably could find better options, futures seems very illiquid, very gamed.
agreed though UNG is a losing proposition just by monthly decay, I think 3%
there are ways of profiting
Posted by pfazza on 16th of Jun 2011 at 05:38 am
there are ways of profiting from this and other products with negative roll yield so long as you play it from the short side. There's nothing about UNG, USO, VXX that make them bad vehicles you just have to be aware of the shape of the curve and how the rebalancing affects the price
UNG is a pig
Posted by steveo on 19th of Jun 2011 at 10:24 pm
Well UNG is based on futures, but 60% of all the futures for Nat Gas are created strictly to "run" UNG. That makes the whole ETF very suspect, and the fact that it doesn't move with price of Nat Gas.
That said, I like your idea of playing from the short side, although I don't think there is any "negative" UNG ETf, like QID for QQQ
Gas Bear ETFs
Posted by libertina on 20th of Jun 2011 at 02:03 am
If you are interested in trading TSX:
HND.tsx is -2X NYMEX gas price, twice the inverse of the daily performance of the NYMEX natural gas price
HIN.tsx is -1X NYMEX natural gas futures for delivery next month, but is too thinly traded to be useful
I don't trade them, only know they exist.
Maybe, but I'm on the sidelines now for these reasons...
Posted by lessarda on 16th of Jun 2011 at 03:31 am
The futures have tried to crack and hold the 4.80-4.90 area five times since December, failing each time with decent pullbacks following the failures. Obviously heavy selling in that range and I don't think it's come down enough here to be safe buying without a good trigger (losing the 10 & 18 day MA's recently on the futures isn't constructive).
Plus you have cool weather so far this summer and continuous new supplies discovered/brought to market, both bearish. Finally, the oil/n.gas price spread has been historically high and that would argue either for oil to come down or gas to go up...looks like oil coming back down is more likely here.
That said, it held up really well today vs. oil, so maybe it will defy gravity...
UNG annual paper work
Posted by genbur on 16th of Jun 2011 at 11:16 am
Whats with all those forms i got from UNG for tax purposes? I held it in and IRA so do I still need to fill out that paperwork? thanks in advance for any input here.