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Nat Spreads
- Thread starter PAPA ROACH
- Start date
Quote from PAPA ROACH:
Cash is trading at $2.00 for the balance of september, trading at $1.83 for the labor day weekend. October has even less demand and will have less available storage as well, I truly think oct futus will eventually trade sub $2 before expiry, hell maybe even $1.50.
If 1.50 for NGV is a possibility, is storage such an issue that the back contracts would still hold their value?
No positions, just observing, but geesh--December is trading more than $2 October.
Quote from SetDraw:
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?
I am very active in this bitch right now, no current spreads on in these months, but i am outright short oct and nov futs. It's hard to put a new short on, you could layer in to V and X puts though, feel alot safer than initiating new outright naked shorts although any bounce on this will likely be very muted, this is in a death march.
Quote from smilingsynic:
If 1.50 for NGV is a possibility, is storage such an issue that the back contracts would still hold their value?
No positions, just observing, but geesh--December is trading more than $2 October.
Storage IS that big of a deal at the moment, so yes V can trade alot lower yet relative to the forwards, although even me being a spread trader, I am reluctant to put spreads on in here that are tied to V. At this point I would rather trade the outright V futs, but that's just me.
Quote from Trendytrader:
Nat Gas now at $2.75/mmbtu I think we will hit low of ~$2.00/mmbtu. Demand is heading back down after power gen summer demand drops. Watch the storage injection numbers jump in the coming weeks...storage will be near full this October. I expect operational flow orders to be instituted by pipelines to leave a little storage headroom for operational reasons.
Nat gas is killing coal fired power as I speak...watch the whole transport and mining logistics turned upside down in next months.....anyone have a spare 50 acres in the northeast to stock pile coal....must be near sea/rail port.
Quote from JPope:
This thread's gotten a little quiet here as of late...I'm curious to hear what everyone in the "gas going to 1.50" camp who recently posted to update their projections or to what do you attribute this recent .50 rally?
I still think that sub $2 is a very strong possibility by expiry, we are still running into a train wreck with regional storage, and it will show up more pronounced in the coming weeks.
As far as the current rally, there is a trendline that dates back to the inception of the NYMEX futures contract, which came in at 2.396 last week, and we traded a low about a penny over that before this huge bounce. I personally am viewing this as a technical corrective rally as we hade been moving almost straight down for several weeks. I was lucky enough to have posted GTC bids on my V shorts at 2.415 and 2.424 (in front of that trendline), and was filled, covering all of my outright shorts. I have since reset most of those shorts below here (hey, at least I bot the bottom). To me, nothing has changed for the end-game. Time will tell.
Quote from PAPA ROACH:
I still think that sub $2 is a very strong possibility by expiry, we are still running into a train wreck with regional storage, and it will show up more pronounced in the coming weeks.
As far as the current rally, there is a trendline that dates back to the inception of the NYMEX futures contract, which came in at 2.396 last week, and we traded a low about a penny over that before this huge bounce. I personally am viewing this as a technical corrective rally as we hade been moving almost straight down for several weeks. I was lucky enough to have posted GTC bids on my V shorts at 2.415 and 2.424 (in front of that trendline), and was filled, covering all of my outright shorts. I have since reset most of those shorts below here (hey, at least I bot the bottom). To me, nothing has changed for the end-game. Time will tell.
Why do I think part of this move up is a response to the CFTC COT report showing more detail as to the holders? 'Managed Money' is lopsided short vs the rest of the market.
http://www.cftc.gov/dea/futures/energy_lf.htm
Quote from scriabinop23:
Why do I think part of this move up is a response to the CFTC COT report showing more detail as to the holders? 'Managed Money' is lopsided short vs the rest of the market.
http://www.cftc.gov/dea/futures/energy_lf.htm
The rally started before that report was released, and that trendline was well known in the industry, first time down many a buyer. I would not hold such strong bearish views if we were not in such a pickle with storage, especially in the producing region, where henry hub resides (NYMEX). reminds me of the feature film titled "There will be blood", coming to a theatre near you!
We have already had a taste of foreshadowing, hub physical traded as low as 1.60's for a four-day period over this past weekend, and the balance of the month hub traded sub $2 at that point. It has since rallied with the screen, but there is still CDD's around AND storage availability, two things that are rapidly fleeting.
Quote from PAPA ROACH:
The rally started before that report was released, and that trendline was well known in the industry, first time down many a buyer. I would not hold such strong bearish views if we were not in such a pickle with storage, especially in the producing region, where henry hub resides (NYMEX). reminds me of the feature film titled "There will be blood", coming to a theatre near you!
We have already had a taste of foreshadowing, hub physical traded as low as 1.60's for a four-day period over this past weekend, and the balance of the month hub traded sub $2 at that point. It has since rallied with the screen, but there is still CDD's around AND storage availability, two things that are rapidly fleeting.
Any idea of how many more weeks gas will still be storable?