help - natural gas on i/b

Quote from niceneasy:

Thanks for stepping up and attempting to answer my question.

However - my question was - how can one participate/speculate in the commodity natural gas for a long term hoirizon through I/B?

I think the answer is.... you can't. If you cant purchase the index. And the futures only go out 2 months? Am I wrong?

Are there any equities in natural gas that correlate with the commodity? Anybody?

I am seeing long term value if i can pick up some BTU's in the 6$ range and hold them till im old (older).

I am at wits end - any insights from IBJ or other would be appreciated.

Thx

nne
More...

I am in the same quandary. Winter is gone, just about, but the damage from Katrina is still a problem. There are long-term supply problems, and I want to hold ng for a few months at least. Through IB you can't do that: you buy and roll. I own several of the Marchs and will roll in April if there is not at least a two point pop between now and expiration.

Through IB you cannot even get the full-sized NG options, if one wanted to speculate with long-term calls.

I like IB a great deal, but one limitation has been the lack of access to the pits. I have heard for years now that IB is getting ready to offer access to those contracts. I for one cannot wait.
 
NYMEX to Offer Round-the-Clock Electronic Trading, Members Say

February 3, 2006 15:54 EST (BLOOMBERG)

The New York Mercantile Exchange, the world's largest energy exchange, plans to offer around-the-clock electronic markets in its oil and gas contracts, responding to growing threats to its live floor trading, two seatholders said.
More...
 
You can't "purchase an index".

If you go to the NYMEX site, you can see what/where/when/which contracts are traded. Like the other NYMEX mini electronic contracts, they only list the first two nearby months, believing that the primary interest is in short-term speculation. The pit-traded contract list 72 months.

Currently, you cannot trade pit-traded contracts at IB, though if you search for it, you'll see that they are coming soon. I only heard credible talk of this starting after the Refco collapse, not "years" ago.

There are plenty of commodity brokers out there who trade the pits. I don't understand the reason for anger/frustration.
 
Quote from alanm:

You can't "purchase an index".

If you go to the NYMEX site, you can see what/where/when/which contracts are traded. Like the other NYMEX mini electronic contracts, they only list the first two nearby months, believing that the primary interest is in short-term speculation. The pit-traded contract list 72 months.

Currently, you cannot trade pit-traded contracts at IB, though if you search for it, you'll see that they are coming soon. I only heard credible talk of this starting after the Refco collapse, not "years" ago.

There are plenty of commodity brokers out there who trade the pits. I don't understand the reason for anger/frustration.
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Sure, but it is a pain to open a new account if your current broker has plans to offer the same products. I've been patient.
 
Quote from niceneasy:

Thanks for stepping up and attempting to answer my question.

However - my question was - how can one participate/speculate in the commodity natural gas for a long term hoirizon through I/B?

I think the answer is.... you can't. If you cant purchase the index. And the futures only go out 2 months? Am I wrong?

Are there any equities in natural gas that correlate with the commodity? Anybody?
More...

Your best bet is to identify a stock that owns natural gas assets - in the ground, literally. Ideally they won't even be producing, but just sitting on their asset.

Thus, you can buy and hold your asset for the long term.

As for which stock(s) that would be, I wouldn't know.
 
smiling synic - thank you. and thank you to everyone else who has been patient. but im still foggy. im reading the nymex site and trying to figure out how to roll contracts and how much it costs??

ie - i buy the april natural gas e-miny QG, which represests 25 million btu's for about $18,050 and i want to roll it to the next month - when do i have to do it and how much does it cost?


this is the termination schedule

2006
January Dec 27 Jan 1 Jan 31
February Jan 26 Feb 1 Feb 28
March Feb 23 Mar 1 Mar 31
April Mar 28 Apr 1 Apr 30
May Apr 25 May 1 May 31
June May 25 Jun 1 Jun 30
July Jun 27 Jul 1 Jul 31
August Jul 26 Aug 1 Aug 31
September Aug 28 Sep 1 Sep 30
October Sep 26 Oct 1 Oct 31
November Oct 26 Nov 1 Nov 30
December Nov 27 Dec 1 Dec 31

the good news being that every day i am wasting trying to figure this shit out - natural gas is getting murdered. should be about 2$ before i pull the trigger on this one lol

i did some homework on nat gas equities: here is the shortlist if anyone is interested. none of them seem to correlate directly with the price of the commodity....
 

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Quote from niceneasy:

smiling synic - thank you. and thank you to everyone else who has been patient. but im still foggy. im reading the nymex site and trying to figure out how to roll contracts and how much it costs??

ie - i buy the april natural gas e-miny QG, which represests 25 million btu's for about $18,050 and i want to roll it to the next month - when do i have to do it and how much does it cost?


this is the termination schedule

2006
January Dec 27 Jan 1 Jan 31
February Jan 26 Feb 1 Feb 28
March Feb 23 Mar 1 Mar 31
April Mar 28 Apr 1 Apr 30
May Apr 25 May 1 May 31
June May 25 Jun 1 Jun 30
July Jun 27 Jul 1 Jul 31
August Jul 26 Aug 1 Aug 31
September Aug 28 Sep 1 Sep 30
October Sep 26 Oct 1 Oct 31
November Oct 26 Nov 1 Nov 30
December Nov 27 Dec 1 Dec 31

the good news being that every day i am wasting trying to figure this shit out - natural gas is getting murdered. should be about 2$ before i pull the trigger on this one lol

i did some homework on nat gas equities: here is the shortlist if anyone is interested. none of them seem to correlate directly with the price of the commodity....
More...

There is no stock or etf that directly corresponds with natural gas. Stocks of natural gas companies will tend to move somewhat in conjunction with the price of natural gas, but since companies hedge by selling nat gas futures, there is no guarantee that a sharp rise (fall) in nat gas will lead to the same for the stock.

If you look at the charts of nat gas companies like Western (WGR), the stock prices have come down only in recent weeks. For a while, the stocks were still high even though the price of nat gas was coming down. Likewise, when nat gas was rising, the stock prices rose, but then stopped rising even though nat gas was still rising.

For those who only have IB, the way to trade nat gas is trade the e-minis until expiration and then buy the next month right at expiration. Commissions and carrying charges will limit any future rise in nat gas. As for the stocks of companies who deal in nat gas, each company hedges differently. Those differences, along with other factors, will be reflected in the price of the stock.
 
Quote from niceneasy:

smiling synic - thank you. and thank you to everyone else who has been patient. but im still foggy. im reading the nymex site and trying to figure out how to roll contracts and how much it costs??

ie - i buy the april natural gas e-miny QG, which represests 25 million btu's for about $18,050 and i want to roll it to the next month - when do i have to do it and how much does it cost?


this is the termination schedule

2006
January Dec 27 Jan 1 Jan 31
February Jan 26 Feb 1 Feb 28
March Feb 23 Mar 1 Mar 31
April Mar 28 Apr 1 Apr 30
May Apr 25 May 1 May 31
June May 25 Jun 1 Jun 30
July Jun 27 Jul 1 Jul 31
August Jul 26 Aug 1 Aug 31
September Aug 28 Sep 1 Sep 30
October Sep 26 Oct 1 Oct 31
November Oct 26 Nov 1 Nov 30
December Nov 27 Dec 1 Dec 31

the good news being that every day i am wasting trying to figure this shit out - natural gas is getting murdered. should be about 2$ before i pull the trigger on this one lol

i did some homework on nat gas equities: here is the shortlist if anyone is interested. none of them seem to correlate directly with the price of the commodity....
More...

The electronic contracts expire and are settled, like stock index futures, in cash. This is different from many other commodities, in which if you do not sell/buy back the contract before settlement, you are obligated to buy/sell the underlying commodity. If you trade corn, you better roll, or else you are obligated to take delivery. You won't have 5000 bushels of corn dumped on your lawn, but you will have to go through some paperwork. With electronic natural gas, that is not a problem. The contracts expire, and you buy new ones (or not).

The only ways I know to invest long-term in nat gas itself is to buy the contracts, eat carrying charges and commish, and then sell when you feel the price is right; or buy a basket of natural gas stocks, small and large, so you have enough diversity to overcome any losses if one single company messes up.

As for me, I go with the contracts.
 
ok

please be patient - i am learning!!!!

how much is the commission to buy a contract?

what are the carrying costs? or is this the spread you pay when you roll over?

so i go out and buy a april contract - it is trading at this very moment at 7.58. it expires march 28th. on march 28th - will it be trading at par with the current price of natural gas??

thanks

nne
 
No, with IB as curently stands you must roll over your contracts every so often. Not a big deal IMHO.
Quote from niceneasy:

Thanks for stepping up and attempting to answer my question.

However - my question was - how can one participate/speculate in the commodity natural gas for a long term hoirizon through I/B?

I think the answer is.... you can't. If you cant purchase the index. And the futures only go out 2 months? Am I wrong?

Are there any equities in natural gas that correlate with the commodity? Anybody?

I am seeing long term value if i can pick up some BTU's in the 6$ range and hold them till im old (older).

I am at wits end - any insights from IBJ or other would be appreciated.

Thx

nne
More...
 
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