Location is a huge thing right now. speak to people down south (texas, fla) and theres more NG in storage than they will need for some time. Speak to anyone in the northeast (which i think is dominated by heating oil anyway) and they can't get enough. If I had the balls to trade NG, i would probably have a short bias near term (and get short vol near term) and probably buy some volatility further out. but like i said, i don't have the cajones to trade natty!
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Natural Gas - Buy or Sell?
- Thread starter trainee2006
- Start date
I believe we have .80 to 1.00 of quick downside coming over the next week or 2. [/B][/QUOTE]
If I may ask why? Is there bad news or something else coming?
If I may ask why? Is there bad news or something else coming?
Quote from bt116:
extremely seasonal commodity. if you look at the price curve it truly looks like a roller coaster. higher in winter and summer months, with prices a bit lower in the spring and fall. from an option perspective, the winter and summer displays higher volatilities as well, with lower vol in spring fall, and the vol curve is downward sloping over all. 1 interesting thing on the options, is that they really don't display a typical "smile" like equities. seems that lower priced options don't have the higher implied vols then the at the monies do. this market is a beast though, so if you decide to tread, do it very lightly!
I agree. The NG market is extremely difficult to position trade. Intra-day too, it's just as hard. It's also where I made my biggest single gain, but after that I tread lightly.
Quote from bt116:
IMO one of the best things you can read on NG trading is the congressional report that came out after the Amaranth debacle. seriously, i learned more about that market than anything i had read before. if i can dig it up, ill post a link.
Great article BT. I love the part near the end when the whole house of cards is about to fall....and they started frantically trying to offset their losses on ICE, but then it went out of control.
Earlier they were in a position to cut their losses, but you'll notice they said they would 'wait and see if the market turns around'.
You can imagine that feeling in their gut when it didn't. I've been short NG in a market that was moving against me fast, and I had no stop (once or twice only), and believe me, i'm a small spec but you get this feeling in the NG market in the pit of your stomach, like no other market i've traded. Have you ever got it BT?
If you have balls of steel or you want to develop balls of steel...make your way to the NG market.
(For me now it's just a little too much - and I tread very lightly.)
enkidu:
Wild swings are possible in NG. According to Howard Simons, it is the most volitile of commodities. More volitile than coffee!
The phrase "feeling in the pit of my stomach" keeps coming up with people who have UNsuccessfully traded NG.
I'm already afraid!!!!!!!
B
Wild swings are possible in NG. According to Howard Simons, it is the most volitile of commodities. More volitile than coffee!
The phrase "feeling in the pit of my stomach" keeps coming up with people who have UNsuccessfully traded NG.
I'm already afraid!!!!!!!
B
Quote from bt116:
i have never traded NG. I don't think I have the stomach for it. How about the .80 cent to $1 move down guys from last week?
LOL
NG is a beast! People are getting nailed on the Oct/Jan spread right now (probably one of most widely traded spreads). Sort of a mini amaranth occuring again.
Go look at the daily around JAN-FEB 2006. Those were the days when I was trading NG alot.
That period right there JAN-beginning FEB, was the most volatile environment I've ever experienced. Then it cooled off for like 4 months and I left. I missed the HUGE sell off in June.
I've heard the Hang Seng futures might be able to match or exceed the volatility.
Note: My balls of steel have now turned to balls of copper