Ulysses Benjamin Dover

Natural Gas ETF: Nowhere to Go but Up, Yet It Keeps Going Down

What could be bad about creating massive speculation in a market that has ever only had some speculation? The more the better. What could possibly go wrong? I say create contracts for 4x the actual amount of natural gas out there and see what the market does with that. Spikes and troughs are cool. Let's see how low and how and how low and how high we can go. Weeeeeee.


On Jul 09 04:51 PM pintelho wrote:

> Elephant in the room here.
>
> So...forget the fundies of nat gas....isn't it crazy that someone
> can keep printing futures contracts for an entity to buy that has
> an open intention NOT to take delivery of those contracts?
>
> Isn't this bad? Kind of like sub-prime bad?
>
> It's exactly the same thing. Securitization of commodities, then
> selling those securities to an insatiable entity that is open about
> it NOT TAKING DELIVERY...
>
> This is dilutive to both the futures contracts themselves...and of
> course if you are holding UNG shares...and they have to keep making
> more shares...your shares are being diluted too.
>
> Isn't this illegal? If not why not?
>
> UNG holders are nothing but rubes...you aren't holding an asset that
> will appreciate any time soon even if fundies improve.