Some exciting news in the world of natty gas. http://www.channelnewsasia.com/news/business/japan-to-start-lng-futures-con/624594.html http://www.eex.com/en/Press Room/Press Release/press/130048
The LNG contract will be interesting to watch but I doubt it will get much liquidity initially. I do hope it encourages growth in the spot market though. The majority of LNG deals are still between large internationals and longer term in nature. The players involved tend not to need central clearing for trades when they have netting agreements in place between buyer and seller.
i always wondered.. cause i've been a bull since the price was two.. but such a noob i didn't know where to derive exposure.. how do you guys get long term exposure to natgas?
Trading longer term strips (quarters, half years, full years) or strip spreads (2015/2016 roll, 3rd qtr/4th qtr spread, etc.).
Sorry, I mean a strip of futures contracts. So, long the 2014 strip is long 1 contract of each month, so 12 contracts total (long Jan, long Feb, long N,...). This gives you the average price for the calendar year, or just the "cal". The Cal15/16 spread for instance will include being long every month in 2015 and short every month in 2016 (or vice versa). Standard bear/bull spread rules apply. "Cal spreads" as they are typically called trade big size in the OTC market, usually between banks, majors, and a few market makers. The seasonal spreads are also big, like summer/summer or winter/winter.
wow.. i've traded some futures spreads.. but i've never heard of that before.. every contract in a year long.. against every contract in the following short.. i guess that takes alot of the kinks in the curve out, and your trading the constant average of one years contracts against another.. without any one contract doing tons of damage.. i'm to small for this kind of trade.. i think.. i'll have to do some math to figure out the hair cut
I've seen some single trades as high as 200/mo, but I would say the standard per-trade-volume is 30-60/mo on the cal spreads. All these spreads tend to keep the curves in line and pretty tight. Liquidity starts to drop off around Cal17. There are a few active in the 18-22 range but naturally quotes are harder to come by.
You might be able to RFQ it on Globex. If you ever want to trade that or looking for liquidity on anything across the complex, PM me and I can have a market maker try to accommodate.