Natural Gas
- Thread starter gdtrader
- Start date
It's in steep contango. Front month is going to continue to go down and the back months are higher. FWI, we have a greater supply of nat gas then any other resource in this country. Front month could go a lot lower.
I would love to buy NG long term at these prices but with the contango I just dont know how to do it in a clever way.
What's dirt cheap? What month? You have to be more specific. Natty gas trades out 10 years on the curve. Which contract month are you talking about? Any long term buyers are going to go out further on the curve. They are not buying the front month that you think is "so cheap".
Unfortunately there is no clever way to do it. If you're a big player you could go out to the swap market.
I was just listening to a broadcast from the guys at Trade Oil Futures (.biz). They said one possible way is to sell out of the money puts, and although you won't capture the whole movement, it pays you to be in the trade. The better way is to go to MLP's in natgas transportation, and get paid a nice dividend for transporting it.
You're right it is tough here, but to be honest, I think if there's a way to make money in tight situations, they are the ones to go to in order figure it out.
I was just listening to a broadcast from the guys at Trade Oil Futures (.biz). They said one possible way is to sell out of the money puts, and although you won't capture the whole movement, it pays you to be in the trade. The better way is to go to MLP's in natgas transportation, and get paid a nice dividend for transporting it.
You're right it is tough here, but to be honest, I think if there's a way to make money in tight situations, they are the ones to go to in order figure it out.
Heard this morning that BoA and ML are calling for $1 handle in NG by Oct.
http://www.tradingeconomics.com/chart.png?s=ng1&d1=19900101&d2=20120131
i see 2 on this chart,maybe 1.5..but $1? then short it and hedge with water
cause if this global warming thing is for real and we dont need any more NG to heat our houses ,then we might need a lot of water,cause its' gonna be hot out there..hot and dry