You won't find it. If the cost of natural gas goes below their break even point the stock will more than likely shoot to the downside. Likewise of gas prices go ballistic, then they're stock will overshoot to the upside. It'll be more like a leveraged play.
Natural Gas etf or company without contango
- Thread starter bearmace
- Start date
You won't find it. If the cost of natural gas goes below their break even point the stock will more than likely shoot to the downside. Likewise of gas prices go ballistic, then they're stock will overshoot to the upside. It'll be more like a leveraged play.
What stocks do you think would be good as a proxy trade for upside NG movement?
No, you suggested to buy even further out on the curve. That is precisely what you DON'T want to do. When the market is in steep contango you want to buy the front end of the curve and hope the curve flattens.
I still believe SWN is your best pure play on nat gas. They have very little to do with actual oil and are a low cost producer. Yes, they have lots of debt, but that leverage is why their price is so cheap and also why they will soar if/when nat gas goes up. Bankruptcy is an issue if nat gas ends up priced for total collapse...but that is unlikely...and their risk is smaller than most fracking companies.
Maverick - then that's fine. If it flattens it'll be a good move. If it steepens, then it won't. And it'll probably flatten more so rolling over might be in the best interest. I'm just answering his question, and throwing out an option.
Honestly, I don't know. I've followed CHK for quite a long time. Like you said it has fleas (first time I ever heard anyone say that, but it works, lol), but if Icahn can trim the fat and turn that company around and if NG goes back to $15.. then CHK could increase exponentially. I might buy XOM if energy prices take another hit.. but that's just how I would play it. I know it doesn't really answer your question for NG specifically, but I don't really wanna mess with NG right now so I haven't really begun to get serious about looking at those stocks. I would begin to get serious once I thought NG started it's bull run, and if these E&P/NG/Fracking companies don't go bankrupt, reduce their debt significantly, etc, I would think about buying. I know you won't get anywhere close to the full bull run you're aiming for, but I can capture the overwhelming majority of it.
SWN has been doing great lately! Did you make a trade BEARMACE?
unfortunately I did not catch that rip upwards today lol. I did catch some long moves on UNG. the volatility is nuts, gap downs and massive gap ups... are you in SWN?
Yes, I'm holding SWN...been in for awhile...bought in the 12's,8's, and 5's. Planning on holding for the long term. I like nat. gas over the next five years...yes...it's crazy volatile over the short term. GOOD LUCK TO YOU!