Am option for natural gas price increase

Discussion in 'Options' started by Tom631, Dec 8, 2013.

  1. Tom631

    Tom631

    My options are usually calls or puts on stocks. I do not have an commodity account nor do I wish to open one

    I feel natural gas prices here in the U.S. will enter a sustained upward trend.

    Can someone kindly give me an option symbol where I can purchase calls that will increase if the price of natural gas does indeed rise ?

    Thanks in advice :)
     

  2. Very hard to get that kind of exposure for a long period... The futures trade at a premium.. The USO etf is subject to a type of dymanic drift as it derives its value from rolling in futures.... Companies that benefit from higher ng prices are something to research
     
  3. Tom631

    Tom631

    Thank you much and I will do some researching into companies that will benefit from higher prices.

    And if anyone knows of which companies would benefit the most from a long term increase in the price of ng please do post.
     
  4. Look to trade swings.
     
  5. Tom631

    Tom631

    Thank you but I just wish to buy 6 month or so call options that will increase in the event I am correct in my thinking of prices rising over that time period....

    Basically go long and not worry about it ( but follow it of course )
     
  6. Philosophical difference.

    How do you eat an elephant?

    One bite at a time.
     
  7. UNG is what you want for natural gas. As mentioned, commodity ETFs have some shortcomings, but UNG will basically track the futures. It has some 2014 months listed currently. The problem would be which strike you are buying and how much exposure. The risk with farther out options is vega as well as delta. UNG can go up over time but depending on your strike, what implied vol does, and how fast it moves, you may or may not make money on your option even though you were correct on direction.
     
  8. How do you see the choice of hard or soft Deltas in this scenario?
     
  9. Doesn’t matter what I think, it depends on what exactly he thinks NG will do, and when it will do it. Does he just want a lottery ticket if it blows through 5, or does he just think it will just be reasonably higher over the next six months? Right now I see implied vol rather high vs. actual, and the underlying has already had a relatively large sustained up move so personally I wouldn’t want to go out of my way to go long vega and OTM deltas.
     
  10. xandman

    xandman

    UNG had just popped above 6 mo. resistance. If he is really looking long term, he should just go with a nice dividend paying producer. CHK or XOM.

    Ofc, thats my bias. I''ve never made money on options with long macro plays. Too much technical noise in between makes me impatient.
     
    #10     Dec 8, 2013