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Started By
Message
re: BOIL has become predictable
Posted on 5/14/15 at 9:18 am to sneakytiger
Posted on 5/14/15 at 9:18 am to sneakytiger
Haven't seen official estimates yet, but I think we should see 100+ injection today
1
Posted on 5/14/15 at 10:03 am to white perch
Anybody else down on UGAZ right now?
Posted on 5/14/15 at 2:25 pm to sneakytiger
quote:
sneakytiger
Spot on
Posted on 5/14/15 at 4:35 pm to z71 Rebel
Has it started? I think we're seeing lower production, but Uncle Sug still seems to think we'll have a record injection season. Should I take down my long and take profit?
Anyone? Anyone at all? Although there are only about 3 of ya'll I listen to.
Anyone? Anyone at all? Although there are only about 3 of ya'll I listen to.
Posted on 5/14/15 at 4:50 pm to Iowa Golfer
Yes, it has started
Posted on 5/14/15 at 5:49 pm to white perch
gotta get back to 11.92 to break even 
Posted on 5/14/15 at 10:40 pm to Iowa Golfer
Just rehashing thoughts on what I read on a daily basis. Production and rig counts are flat, production is up YOY. Stating the obvious, but the key variable this summer is power burn (i.e. weather), particularly in the Northeast. I don't know what regional weather models are showing, but if Marcellus gas can't find a home in storage or as fuel in a power plant, it will displace gas in other markets, mainly the gulf coast and midwest. Gas out of the Marcellus is CHEAP... producers have had no problem maintaining and increasing production at below $2 mcf, or $1 in some cases last year if I recall correctly.
What does this mean for NYMEX futures? I'm puzzled by the recent run up the last two weeks, which I unfortunately missed out on. Futures are up through the summer in anticipation of a hot one, production curtailment, or some combination of both. I skimmed over something about a chunk of nuclear capacity temporarily going offline too. I still see record storage levels sometime in October as a real possibilty. That said if gas gets down to 2.50-2.75 again I'm a buyer. I'm also keeping an eye on spot prices and forward basis curves at Marcellus production points. I think changes there will ripple into NYMEX.
What does this mean for NYMEX futures? I'm puzzled by the recent run up the last two weeks, which I unfortunately missed out on. Futures are up through the summer in anticipation of a hot one, production curtailment, or some combination of both. I skimmed over something about a chunk of nuclear capacity temporarily going offline too. I still see record storage levels sometime in October as a real possibilty. That said if gas gets down to 2.50-2.75 again I'm a buyer. I'm also keeping an eye on spot prices and forward basis curves at Marcellus production points. I think changes there will ripple into NYMEX.
Posted on 5/15/15 at 7:57 am to sneakytiger
Not quite yet. I'm conflicted. I take medication for this.
Thanks sneakytiger. Refreshing that someone actually has put some amount of time in to research.
I'm confused here as we're already getting decreased production. Kind of. But we also likely will get record injection(s) and storage.
A couple of weeks isn't enough of a pattern. Having said this, I make money on guessing ahead of whatever pattern appears. So I'm long. But it isn't a large long position.
Thanks sneakytiger. Refreshing that someone actually has put some amount of time in to research.
I'm confused here as we're already getting decreased production. Kind of. But we also likely will get record injection(s) and storage.
A couple of weeks isn't enough of a pattern. Having said this, I make money on guessing ahead of whatever pattern appears. So I'm long. But it isn't a large long position.
Posted on 5/15/15 at 8:24 am to Iowa Golfer
Who is Uncle Sug? Where is he getting this info from? I don't see us being able to meet estimates that are gonna be set by EIA.
Secondly, I don't think people(the novices and some deep pockets) have fully grasped coal fueled power plants that are closing down all over the country.
This is where the real test will be for UGAZ over the summer. If electricity efficiency is coming from primarily NG stations by June, estimates will remain record breaking but inventory will continously fall short until the effects can be realized.
One note from my research. On Jan 5th NG was the same price it is now and UGAZ was 4 bucks so the decay is realized...........however if we can withstand a bull summer and get to winter with some luck UGAZ can likely get to 14 again.
Say NO TO COAL and YES TO NG.
Secondly, I don't think people(the novices and some deep pockets) have fully grasped coal fueled power plants that are closing down all over the country.
This is where the real test will be for UGAZ over the summer. If electricity efficiency is coming from primarily NG stations by June, estimates will remain record breaking but inventory will continously fall short until the effects can be realized.
One note from my research. On Jan 5th NG was the same price it is now and UGAZ was 4 bucks so the decay is realized...........however if we can withstand a bull summer and get to winter with some luck UGAZ can likely get to 14 again.
Say NO TO COAL and YES TO NG.
This post was edited on 5/15/15 at 8:25 am
Posted on 5/15/15 at 8:26 am to L S Usetheforce
Uncle Sugar. The gubmit. We're on the same page.
Posted on 5/15/15 at 8:42 am to L S Usetheforce
quote:
On Jan 5th NG was the same price it is now and UGAZ was 4 bucks so the decay is realized.
That's incredible aint it? Here's another fun stat. On Feb 6, 2012, the day UGAZ launched as a fund, NYMEX futures were at $2.55... UGAZ was priced at about $51.
Posted on 5/15/15 at 9:48 am to sneakytiger
Just bought and sold UWTI for a 1.4% gain
Posted on 5/15/15 at 2:57 pm to Iowa Golfer
quote:
I still have my short DGAZ. I'm long UNG. Within the last two weeks. Narrower range in my opinion.
Why would you be short DGAZ instead of long UGAZ? DGAZ theoretically has unlimited losses. There must be a reason why you chose to go short dgaz but I can't see it.
This post was edited on 5/15/15 at 2:58 pm
Posted on 5/15/15 at 4:48 pm to Al Dante
Theoretical? I have a buy to cover order at a price to limit losses. If it blows through my price, the order is set to immediately adjust to buy and execute at market. I have execution guaranty, and yes, it does guarantee to execute not at limit, but at market. So it will fill eventually. Market can't go up in a crazy fashion without both buyers and sellers. Someone will sell.
Theoretical is about a chance of .000001%. It's there. Maybe.
It's also etched in stone that this stock can't be shorted, and there is no reported short interest, but I have it shorted.
How can all of this be? Because there a re no absolutes in this world, and none at all while trading. There is no law against doing what I do, only experts letting people know about theoretical unlimited losses, and letting us know they are bankers and work at large trading houses, and there is no way to short certain issues. Except in the real world, I happens all the time.
Theoretical is about a chance of .000001%. It's there. Maybe.
It's also etched in stone that this stock can't be shorted, and there is no reported short interest, but I have it shorted.
How can all of this be? Because there a re no absolutes in this world, and none at all while trading. There is no law against doing what I do, only experts letting people know about theoretical unlimited losses, and letting us know they are bankers and work at large trading houses, and there is no way to short certain issues. Except in the real world, I happens all the time.
Posted on 5/15/15 at 5:11 pm to Iowa Golfer
That's all well and good, but why didn't you just buy UGAZ instead of going through all that to short DGAZ?
Wow, I'm impressed.
quote:
It's also etched in stone that this stock can't be shorted, and there is no reported short interest, but I have it shorted.
Wow, I'm impressed.
This post was edited on 5/15/15 at 5:20 pm
Posted on 5/15/15 at 5:54 pm to Al Dante
The cost to carry the trade is less when I short. It is more dangerous (marginally), and requires either a broker that allows you to do these things and/or guarantees certain executions, as well as requires closer monitoring (marginally), I'm paying little margin interest on the short carry. I'd never buy a leveraged commodity ETF or ETN. Never. This would require a conservative traders such as myself to close the position each day. No way in the world would I own this until market open.
Shorting and blind naked options are actually more conservative if you know what you're doing.
Ain't one financial adviser or banker on here that would agree with me on that. Except if their working for a larger trading firm, investment bank, or traditional bank, their employers all agree at a higher level.
Look, it's not for everyone, and it's not for me all the time either. The common thread on here with me? Natural gas and silver. I understand these markets as well as, or better than anyone other so called "expert". Which could also be understood to mean many experts have no idea, and likely neither do I. But we have more of an idea than the average bear.
Shorting and blind naked options are actually more conservative if you know what you're doing.
Ain't one financial adviser or banker on here that would agree with me on that. Except if their working for a larger trading firm, investment bank, or traditional bank, their employers all agree at a higher level.
Look, it's not for everyone, and it's not for me all the time either. The common thread on here with me? Natural gas and silver. I understand these markets as well as, or better than anyone other so called "expert". Which could also be understood to mean many experts have no idea, and likely neither do I. But we have more of an idea than the average bear.
Posted on 5/15/15 at 7:37 pm to Iowa Golfer
quote:
I'd never buy a leveraged commodity ETF or ETN. Never. This would require a conservative traders such as myself to close the position each day. No way in the world would I own this until market open.
I still don't understand. Sorry for my ignorance. You say you'd never buy a commodity ETF or ETN and carry it overnight but yet you carry the short positions overnight? What's the difference? You're exposed overnight in either position.
quote:
The cost to carry the trade is less when I short..
It should be the same whether you're long or short. Maybe your situation is different. If it's not it would be negligible I would think.
Posted on 5/15/15 at 7:52 pm to Al Dante
The difference is when you own a ETN, or an ETF, you really don't own anything. That's an oversimplification. In the case of an ETN, you're actually a lender. You can write a book, and people have, about why these are day trading instruments, and at best very short term trades. Actually, almost all of these are required to disclose this in their prospectus.
When I short I get credited the sales proceeds, and they charge margin interest, which is almost nil for me. When I long, I need to pay 100% for the stock, or maybe 25%, or 50% if I buy partially on margin. How is my cost to carry less to go long?
I'm glossing over this quickly. There are risks involved. Warrants being issued. Dividend costs. Some other things. But for the natural gas traded notes and funds, the chance of warrants is about as great as Iowa winning the national championship. Dividends? Sure thing, they'll declare those right after they reverse split and need to borrow more money for the zillionth time.
When I short I get credited the sales proceeds, and they charge margin interest, which is almost nil for me. When I long, I need to pay 100% for the stock, or maybe 25%, or 50% if I buy partially on margin. How is my cost to carry less to go long?
I'm glossing over this quickly. There are risks involved. Warrants being issued. Dividend costs. Some other things. But for the natural gas traded notes and funds, the chance of warrants is about as great as Iowa winning the national championship. Dividends? Sure thing, they'll declare those right after they reverse split and need to borrow more money for the zillionth time.
Posted on 5/15/15 at 10:54 pm to Iowa Golfer
quote:
I'd never buy a leveraged commodity ETF or ETN. Never... The difference is when you own a ETN, or an ETF, you really don't own anything.
Conversely, when you short an ETN or an ETF, you really aren't shorting anything. Yet you will short DGAZ for a longer period of time than going long UGAZ. It really doesn't make sense to me since they're the same thing in this regard. And beta-slippage for both long UGAZ and short DGAZ will be the same, so that can't be the reason why you would choose to go short DGAZ instead of long UGAZ.
quote:
You can write a book, and people have, about why these are day trading instruments, and at best very short term trades.
That would apply to being both long and short for these instruments. So why would you be willing to hold a short DGAZ longer than you would hold a long UGAZ? They're the same thing.
quote:
When I short I get credited the sales proceeds, and they charge margin interest, which is almost nil for me. When I long, I need to pay 100% for the stock, or maybe 25%, or 50% if I buy partially on margin. How is my cost to carry less to go long?
When on margin, Regulation T of the FRB says margins must be 150% of the full value of a short position, the inverse for long positions. Going forward it may change but I don't know of any broker that will allow you to short an instrument on margin with no margin, yet require a 50% margin on long positions. Margin interest will be the same whether you're short or long as well, not different.
I don't know, if I was bullish on natural gas I'd buy UGAZ and not short DGAZ. You still haven't offered a reason as to why I would do different, other than that your broker allows you to for some reason. It's just logical to go long UGAZ and not have to jump through all the hoops to short DGAZ. You said earlier there's barely anybody shorting DGAZ, and there's a reason for that: they just go long UGAZ.
This post was edited on 5/16/15 at 12:42 am
Posted on 5/16/15 at 8:15 am to Al Dante
Yes, but I get paid to not own anything, rather than paying to buy nothing.
Slippage helps a short, doesn't much help a long.
I guess theoretically this would apply to both short and long, but please give me an example of a scenario where a short is harmed by any of this. I'll even accept a "theoretical" scenario.
150%? I have portfolio margin. I guess "theoretically" I have over 150% on the short, but to my knowledge Reg T only states initial is 50%, and maintenance is 25%. I'm not sure it really speak specifically to shorting a stock. Brokers are able to use whatever margin they wish, so long as it is in compliance. It's not clear to me IB is ever in compliance as I have shorted and not been charged. In one instance I received a rebate back for adding liquidity.
Doesn't matter. Why not explain to me exactly how if I short 1000 shares of DGAZ @ $5 the cost to carry even approaches the cost to purchase?
The second scenario costs me $5,002.00.
The first scenario costs me -$4,998.00 + pennies of interest monthly.
I went in this morning and looked at the margin calculator again. I'm short, and the margin equity in my account is nearly 100%, and funds withheld is $0.00.
Slippage helps a short, doesn't much help a long.
I guess theoretically this would apply to both short and long, but please give me an example of a scenario where a short is harmed by any of this. I'll even accept a "theoretical" scenario.
150%? I have portfolio margin. I guess "theoretically" I have over 150% on the short, but to my knowledge Reg T only states initial is 50%, and maintenance is 25%. I'm not sure it really speak specifically to shorting a stock. Brokers are able to use whatever margin they wish, so long as it is in compliance. It's not clear to me IB is ever in compliance as I have shorted and not been charged. In one instance I received a rebate back for adding liquidity.
Doesn't matter. Why not explain to me exactly how if I short 1000 shares of DGAZ @ $5 the cost to carry even approaches the cost to purchase?
The second scenario costs me $5,002.00.
The first scenario costs me -$4,998.00 + pennies of interest monthly.
I went in this morning and looked at the margin calculator again. I'm short, and the margin equity in my account is nearly 100%, and funds withheld is $0.00.
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