UNG: High Risk, High Reward In The Natural Gas Space

Binary Tree Analytics
5.15K Followers

Summary

  • United States Natural Gas Fund is a highly speculative tool that tracks natural gas prices through futures contracts.
  • UNG has experienced extreme volatility, with a 51% decline in the past year but a recent rally of 25%.
  • Natural gas prices are expected to be range-bound in 2024 due to oversupply and weak demand.
  • The fund represents an interesting tool for a speculative investor and is not a suitable instrument for a buy-and-hold strategy.

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Thesis

The United States Natural Gas Fund (NYSEARCA:UNG) is an exchange-traded fund. The vehicle aims to track the percentage movements of natural gas prices via futures. As per its literature:

The investment objective of UNG is

This article was written by

5.15K Followers
With an investment banking cash and derivatives trading background, Binary Tree Analytics ('BTA') aims to provide transparency and analytics in respect to capital markets instruments and trades. BTA focuses on CEFs, ETFs and Special Situations, and aims to deliver high annualized returns with a low volatility profile. We have been investing for over 20 years after obtaining a Finance major at a top university.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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