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UNG Status: Uncertain future

Today, UNG made this filing with the SEC.

In summary, UNG must reduce its positions at ICE and NYMEX and does not know if it  will be able to, or want to, issue new units in the future. They currently can not issue new units.

UNG may be forced into engaging in transactions that do not as effectively meet the fund's stated objectives. UNG will be entering the OTC market to attempt to continue to meet the fund's objectives since the CFTC has determined that the swaps at ICE are a significant price discovery mechanism and will be subjected to position limits.

We'll have to wait and see how this affects the long-term correlation of NAV to the stated objective of tracking natural gas prices.

I welcome any comments about the effect of this and any discrepancies you may spot in my assessment.

Disclosure: long UNG, short calls.