couple thoughts...first not criticizing the poster going long ng...these are just thoughts in general re ng
a poster talked re the larger than expected inv # and price still going down - a good rule of thumb is that when price does the opposite of what you think will happen then price is about to move huge.
re using a leveraged etf to play this. first off buying and holding ng in any instrument is difficult due to steep contango (prob more than any other commodity). there are a couple ways to trade it all w/ their own risks:
ung - this is the worst etf created in the history of man. anyone buying and holding this for longer than a week should not be allowed to vote.
buy front month futures and roll (this is what ung does) - this is a problem for the same reason ung screws investors - the massive negative roll yield - price has to go up more than the roll yield for you to even make 1 penny
buy longer dated futures and not have to roll - the prob by def is these cars assume a higher price in future - sometimes 30, 40 or even 50% higher than spot
buy nat gas producers like chk - you now have company risk like chk when they almost went bankrupt b/c they overleveraged to buy land.
re production "has to stop" - b/c of the nature of the leases these cos have signed - they are forced to continue drilling otherwise they lose the leases so normal laws of supply and demand don't apply.
re this country moving away from cl and towards ng - you're preaching to the choir on this one but trading is not about what should happen and everything to do w/ what is happening.
a poster talked re the larger than expected inv # and price still going down - a good rule of thumb is that when price does the opposite of what you think will happen then price is about to move huge.
re using a leveraged etf to play this. first off buying and holding ng in any instrument is difficult due to steep contango (prob more than any other commodity). there are a couple ways to trade it all w/ their own risks:
ung - this is the worst etf created in the history of man. anyone buying and holding this for longer than a week should not be allowed to vote.
buy front month futures and roll (this is what ung does) - this is a problem for the same reason ung screws investors - the massive negative roll yield - price has to go up more than the roll yield for you to even make 1 penny
buy longer dated futures and not have to roll - the prob by def is these cars assume a higher price in future - sometimes 30, 40 or even 50% higher than spot
buy nat gas producers like chk - you now have company risk like chk when they almost went bankrupt b/c they overleveraged to buy land.
re production "has to stop" - b/c of the nature of the leases these cos have signed - they are forced to continue drilling otherwise they lose the leases so normal laws of supply and demand don't apply.
re this country moving away from cl and towards ng - you're preaching to the choir on this one but trading is not about what should happen and everything to do w/ what is happening.
