Stay away from UNG unless you know how to play it with GAZ and how long that will last ???
Having said that, look at this article, brief but helpful:
http://www.thestreet.com/story/10592616/2/a-natural-gas-etf-to-play-contango.html
Nat Gas ETFs
- Thread starter mrez114
- Start date
Having said that, look at this article, brief but helpful:
http://www.thestreet.com/story/10592616/2/a-natural-gas-etf-to-play-contango.html
UNG is trading at an 18% PREMIUM to the net asset value as of yesterday's close. GAZ is an ETN ( not an ETF ) that also trades at a significant PREMIUM to NAV.
There are so many people that have bought these two products without having a clue what they actually represent.
Sheer idiocy.
There are so many people that have bought these two products without having a clue what they actually represent.
Sheer idiocy.
http://online.wsj.com/article/SB125183656912577199.html#printModefr
from tv etns will shut down and reopen with higher expense ratio.
from tv etns will shut down and reopen with higher expense ratio.
UNG and GAS should be used as intraday only. Overnite action correlation is not there. Example if (NG)natural gas goes up buy amount "X" the pre-market and open price will be off buy a couple of percentage points. The best time I have noticed is to catch them during FND/LTD contract rolovers which is usually a couple days. Long term these products will be ground down to zero. I.E. USO is trading well below the spot price of a barrel of WTI crude.
Akuma
Akuma
How about creating your own ETF of natural gas co's like Cheasapeake or Anadarko etc....natural gas companies.
I feel like adding a little to the etf conversation - just info, not making any call on n.gas direction.
All the etfs tracking front month are still subject to a lot of decay during contango which makes them a poor play aside from short term. HNU/HND on TSX - 2x leverege with good volume are nice for intraday trading again, but not great ideas longer term (the decay is big in HNU right now, plus currency hedges effect performance). If you like playing with fire, you may be able to figure out a way to profit from contango through HND. GAS is a 1x leveraged fund on front month AECO gas (Alberta contracts) - this gives it some funny tracking characteristics if you're trying to play nymex spot, and contango is still a suck.
There is an ETF on the TSX called HUN - its a longer term 1x leveraged fund on n.gas - I have it in my head that its year forward jan contracts rolled in nov, but you'd have to look up and confirm. If you want a directional bet on n.gas for a length of time, this is a reasonable play (doesn't suffer from contango or leverage degridation). HUN looks like it does no volume, but it has dedicated mm algo so you can always move 10k blocks within a few cent spread.
One other option coming up, if looking for a corporate pure play, is the nat gas half of Encana being spun out.
All the etfs tracking front month are still subject to a lot of decay during contango which makes them a poor play aside from short term. HNU/HND on TSX - 2x leverege with good volume are nice for intraday trading again, but not great ideas longer term (the decay is big in HNU right now, plus currency hedges effect performance). If you like playing with fire, you may be able to figure out a way to profit from contango through HND. GAS is a 1x leveraged fund on front month AECO gas (Alberta contracts) - this gives it some funny tracking characteristics if you're trying to play nymex spot, and contango is still a suck.
There is an ETF on the TSX called HUN - its a longer term 1x leveraged fund on n.gas - I have it in my head that its year forward jan contracts rolled in nov, but you'd have to look up and confirm. If you want a directional bet on n.gas for a length of time, this is a reasonable play (doesn't suffer from contango or leverage degridation). HUN looks like it does no volume, but it has dedicated mm algo so you can always move 10k blocks within a few cent spread.
One other option coming up, if looking for a corporate pure play, is the nat gas half of Encana being spun out.