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we're at 3392 with 10 weeks left. figures i've read is 3900 peak storage but i'm not an expert. what a rally from 10:30 report today though.

the question is, is the risk/reward worth it to go outright short Oct right now after the recent move! papa roach, are you actively trading this move or are you sitting back and watching things unfold?

speechless at the action. i keep on saying "how low can nat gas go" yet fail to go short! maybe a hedge fund is blowing up right now from nat gas?

Welcome back from vacation papa roach! I did a quick history check for the past 10 years on the H/J spread and it seems limited downside at this point (see attached). But it sure is hell scary looking at the chart! Is the action you are seeing now similar to any other year in your memory?

wow, simply unreal sell-off in nat gas lately. regarding spreads. the V/X is basically a play on storage and the H/J is basically a play on a cold winter or are there other drivers?

thanks bt116 for the color. story seems kind of strange though. why would they purchase $10 calls to hedge something that's trading $5.xx? the delta on those calls wouldn't hedge a large short position much. regardless, the selling as of late is relentless!

Near term contracts are getting slammed but apparently a hedge fund is betting big on the winter contracts. http://www.ft.com/cms/s/0/e8a82d0e-8cee-11de-a540-00144feabdc0.html?nclick_check=1

very interesting ogarb. who is ppr? one of my friends who does energy trading for a hedge fund is calling for CL to retest lows. seems like a very bold call, but he's been right many times in the past.

Thanks for all the replies everyone. I have been researching Natural Gas spreads for the past few days on Bloomberg and it has been quite enlightening. Just looked at Papa Roach's recent +H/-J call. 80% correlated to the front month NG YTD. I guess that's why it's called a bull spread! Also...

PAPA ROACH: Thanks for your insights on Nat Spreads. I'm trying to understand what happened in 2006 when spreads blew out so much. In one of your posts you mentioned to keep an eye on "producing region" numbers yet those numbers were somewhat flat during the August 06 -V/+X blowout. Also...