1) Is there another etf or something that truly tracks Nat Gas? 2) If UNG doesn't track Nat Gas, what does it track?
As with USO, these ETFs own commodity future contracts, which expire month to month. To avoid taking physical delivery, they "roll" these contracts over by buying next months contract and selling the front month. This wouldn't be a problem if not for the current state of "contango", meaning the front month contracts are cheaper than latter months. So constantly swapping cheap front month contracts for expensive future month contracts results in a negative "roll yield". Basically it becomes a tax on the fund each month. If the underlying commodity trades flat in a state of contango, these ETFs will depreciate.
Yup...look at last fall/winter. Natty Gas went from the mid 2's to almost 6 and ung could only muster a 25% gain. FCG might be a better play.
Great explanation, CXbby. Now my question is, when Natgas presumably does start to go back up in the future (whenever that may be), will UNG successfully track the commodity? I know there are other Natgas ETF's out there (FCG), but they invest in a basket of companies that generate income from gas production, as opposed to actually trading contracts like UNG.
If natgas goes up 10% before june becomes the front month contract then UNG will go up 10%. Its a good short-term play on natgas. The problem is that Jan 11 is priced at 5.40. So theoretically natgas could go up 35% + between now and December and ung will still be at $7. UNG is pretty could long-term short if you do not believe that there will be a spike in nat gas prices.
Perhaps some could try trading stocks that might have decent correlation with the price movements of Natural Gas. I haven't ran correlation studies on the idea, but it is a suggestion for an alternative way to get exposure to Natural Gas without having the <i>roll</i> problems of UNG. Some possible candidates: CHK CPX DVN ECA EQT GLP (It is a MLP) NBR NE PDS PTEN PXP REXX RRC SWN SWSI TLM It is somewhat of a slack time for electricity usage in parts of the U.S. and plants are likely in major repair and improvement situations with some production capacity idled. It is still a bit too early for increased electricity demand from air conditioning. Fear of possible damage to production from hurricanes is also still a bit over the horizon. A recent article that points out some of the problems with Natural Gas. Nabors, Baker Hughes, BJ Service lag oil services Be careful catching a <i>falling knife</i> (Natural Gas).
Thanks, Mango. I already own CHK and NBR. I think I've jumped off the UNG bandwagon for now after understanding the dynamics of the ETF. I'm betting (on a small scale) that Congress will fall in to the trap of passing the "NATGAS" bill, thus significantly driving up the demand for natural gas. With that in mind, I'm currently looking into CLNE. I added it to my watch list about a month ago and it is up over 20% since then.
thelasik, I hadn't heard of CLNE until your mention of it. Web Address: Clean Energy Fuels <i> CLNE COMPANY OVERVIEW Clean Energy Fuels Corp. is a provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada. The Company designs, builds, finances and operates fueling stations and supplies its customers with compressed natural gas (CNG) and liquefied natural gas (LNG). The Company also produces renewable biomethane, which can be used as vehicle fuel, through its landfill gas joint venture. It also provides natural gas conversions, alternative fuel systems, application engineering, service and warranty support and research and development for natural gas vehicles, through its wholly owned subsidiary, BAF Technologies, Inc. In addition, the Company supports its customers acquire and finance natural gas vehicles and obtain local, state and federal clean air rebates and incentives. On October 1, 2009, the Company acquired 100% of BAF Technologies, Inc. (BAF).</i> If things break favorably for them, then they have a solid niche by riding the wave of increased natural gas usage in vehicles without being exposed to the Ups & Downs of natural gas prices. I noticed on their web site that the CEO had an interview with Cramer at the end of February, so that might be the cause of some of the recent runup in the stock price.
Hey guys, Anyone have any recommendations / thoughts on DRP's / DRIP's stocks. I started a thread the other day, but I guess no one here read it. Also looking at picking up PALM. What do you think? Does anyone here belong to other investing forums?
It did, but CLNE has been a pick of others on CNBC as well. Cramer's recommended it as a speculative play a few times over the past couple of years. I think T Boone Pickens being a major investor (?) in it also helps its cause a bit.
I don't use DRIPs, but Google pro's and con's of DRIPs and you'll get articles detailing them. Most people I've read or watched think PALM is a near-crap stock. I'm not on any forums, but I read other websites. What are you looking for? Try something like http://www.fool.com.
What do you think about GS at the current price of 177-178? PE of 8 is making this stock unbelievably cheap at $178, what do you think? Thanks for any educated feedback.
Dow 36,000 by March 12, 2011. Woooo we're all gonna be rich bastards http://www.zerohedge.com/article/332-days-till-dow-36000-spy-has-become-4x-leveraged-etf-xlf
WTF happened to this stock? Honestly I don't know crap about the stock market, but have made decent change taking some tips from this thread. Somebody recommended GS when it was below $80 and I got into it heavy. Woo hoo! Any other stocks anybody wanna recommend?
"ProShares Plans Reverse Splits on 9 ETFs" http://finance.yahoo.com/news/ProShares-Plans-Reverse-etfguide-3112205133.html?x=0&.v=1
looking to pick up a boat load of MOT (motorola) shares. I've owned a few hundred for about a year and am optimistic about the 1st q earnings call later this month. Any thoughts?
