So March settles below $5, with April trading at $4.50... after five-year highs seen just a week ago at $6+. All of that, yet UNG only drops $2.50 off its high a week ago. What am I missing? Is this people trading the fund around an expectation, not its actual holdings?
UNG isn't done rolling yet, and one purpose of the swaps they own is to even things out a bit. There are usually a couple days every month the price of UNG is counter to the price of spot and the contracts. Spot is trading below April contracts currently.
Anyway, I took the opportunity presented today, and averaged down further on July 20/23 puts. I bought back the other side of the spread at a small profit some time ago. My reasoning is I don't want the spread limiting profit when and if things go south on natty gas.
What do you mean, they will continue to purchase Apr contracts? I see they have a lot of cash on hand... it'd be really interesting to see a historical day-by-day record of the their holdings and compare with their current portfolio.
quote: Injection season can't get here soon enough. I think once we see the first monster storage build the market will snap out of it and we'll see capitulation.
When it goes down, UNG will go down even quicker. I'll make a friendly wager on that. BOIL, which is predictable I guess, will drop so quickly it should really be entertaining. Especialy entertaining to you and I.