Yes lol, that's how I found out hedge fund's convergent and divergent & long-short strategy. I had to carry out research using 1 tera byte size data.
How do you trade Natural Gas?
- Thread starter OctopodeClub
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Yes lol, that's how I found out hedge fund's convergent and divergent & long-short strategy. I had to carry out research using 1 tera byte size data.
I did my phd research with almost 2 terabytes of data.
That's not quite how it works. LOL.
That's already priced in. Perhaps you missed the 30% selloff on the X and Z contracts. We're in F now. New ball game.
A departure from a standard mean over a one month period doesn't mean that gas demand is going to be lower this year, over other years. My bones tell me it's going to a cold darn winter. November is NOT winter. And neither is December! Geez, all those folks in the southern half of the country have no clue about what cold really is.
Oh, and I want to point something out on that little USA map, with the departure from normal temperatures? See how they have the coldest part of the country, the Fargo zone, as being 20 degrees above normal? Well shit man, they have an average high of what, 20 degrees? So...If they averaged 40 degrees this month, they will not be using any heat? Are they eskimos? They will not turn their heat on at all? No gas usage at all? Everyone is smoking crack and losing it if people think that gas consumption is going to be reduced this year.
Oh, and I want to point something out on that little USA map, with the departure from normal temperatures? See how they have the coldest part of the country, the Fargo zone, as being 20 degrees above normal? Well shit man, they have an average high of what, 20 degrees? So...If they averaged 40 degrees this month, they will not be using any heat? Are they eskimos? They will not turn their heat on at all? No gas usage at all? Everyone is smoking crack and losing it if people think that gas consumption is going to be reduced this year.
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Really keep competition indeed!
https://www.elitetrader.com/et/thre...-for-interstellar-travel.295694/#post-4367634
I'm always amazed when I read about trading NG futures, one of those markets that seems almost impossible to model. The near term is driven by weather, which is not any easier to forecast than anything else, making the spot price a throw of the dice. The forward curve has pronounced seasonal patterns that eliminate any of the conventional curvature trades using intramarket calendar spreads. There is no other market that correlates with NG, so you don't have inter-market spread opportunities. And so-called "smart money" hedge funds (Amaranth) have epic fails trading NG, making widows of their clients. And yet, there is still a following for trading this market. Go figure.
This market is probably one of the easiest to model because of the curves and the seasonality. WTI is a lot harder. I have models for both and when OPEC comes out and says they are going to freeze output all my WTI models go to shit. But natural gas has no OPEC. It's all driven by supply (storage) and demand (temperature). These things are fairly straightforward to model. They do require some technical expertise though.