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A more in depth view at natural gas prices

December 05, 2018

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I just found a nice link which helps educate more and put in a context my previous natural gas trade ideas

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Natural Gas trades using options strategies

The weather in the US is unfolding in a tough winter. And according to the Farmers’ Almanac’s famous weather outlook, it’s going to be a cold one, with plenty of snow. I know, this is nothing new, right? In fact the natural gas price started to climb better than a month a go. People would think that this train left the station and trade opportunities failed already. Maybe if one trades directional, but there are plenty of other ways to take a cut of this. True, one needs to dig deeper and things get's more complicated... First opportunity is in the futures market. Look at the expiration months and you'll see that natural gas price are in backwardation. That means front month prices are more expensive than back month, implying that current demand is more stronger than supply. So, this is a way of approaching this. Natural Gas prices in futures market Second opportunity and my favorite is in the natural gas ETF, UNG. Implied volatility is at 84% and IV rank( the level

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