deepblue4you
Natural gas (NG1:COM) is a highly volatile energy commodity that is as combustible in the futures market as in its natural form. After falling to a $1.432 per MMBtu low in June 2020, the lowest price since 1995, the price exploded
BOIL And KOLD: Trading Natural Gas With Leveraged ETF Products
Summary
- Natural gas prices are highly volatile, with significant price swings influenced by seasonal demand, weather conditions, and inventory levels.
- Leveraged ETFs like ProShares Ultra Bloomberg Natural Gas ETF and ProShares UltraShort Bloomberg Natural Gas ETF offer short-term trading opportunities, providing 2x exposure to natural gas price movements but require disciplined risk management.
- U.S. natural gas inventories have declined significantly, supporting higher futures prices and contributing to recent market rallies.
- BOIL and KOLD ETFs are limited to U.S. stock market hours, missing potential price movements outside these hours, necessitating careful trading strategies.
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Andrew Hecht is a 35-year Wall Street veteran covering commodities and precious metals.
He runs the investing group The Hecht Commodity Report, one of the most comprehensive commodities services available. It covers the market movements of 20 different commodities and provides bullish, bearish and neutral calls; directional trading recommendations, and actionable ideas for traders. Learn more.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.
The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis.
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