I really dont know much about spreads at all, is there much opportunity right now give the choppy rangebound price action in nat gas?
With the Nat Gas calendars they have been a decent swing trade but a lousy day trade; as you know, they've had a rather modest trading range past couple years. There is so much supply on the market these days that weekly storage and draw figures are really anti-climatic and other than nominal fund and hedging roll activity much of the excitement has gone out of it.
awful... I trade cash nat gas for a marketer and its just terrible. Today's NYMEX range finally broke $0.17 b/c of another sub-par storage report. Check out these articles. Chesapeake unwound all their hedges and are betting under under 6.15 until 2012 and are betting around 8 bucks way out the curve http://finance.yahoo.com/news/Chesapeake-Energys-Hedging-cnbc-646358532.html?x=0&.v=1 http://www.cnbc.com/id/39213463/Chesapeake_Energy_s_Offensive_Hedging_Strategy
That's also why the heat rate trade just plain sucks these days as well; better off just taking directional power risk. How is Centaurus doing with this shit show? They took things private anyway. DRW's nat gas options book must be a bit light also.
Anyone know what these volume pops are attributable to? they happened for about a week all starting at the exact same time; 13:24 Chicago or 12:24 NY. Havent had those same volume spikes on that spread since then. NG j1-k1 spread Started 3 February. 2 hour chart attached to this post. 1min chart attached to next post
100% on the money Bone! The big money (especially if you own infrastructure) is FRAC's right now, and our hydro power deals, are also where the spreads are at. From what I gather, everybodys book is light right now. Unfortunately I'm trying to scratch out a living managing our regional gas book, but the calendar spreads aren't there, nor are regional point spreads... For any trader trying to pick a bottom - In a nutshelll... I'd stay away from nat-gas for the foreseeable future. Way too volatile, way too much supply, and big guys are betting hard against upside. OP - Remember, guys like UNG are rolling every month at a negative, especially now that we`re coming out of the withdrawal season with prices depressed. http://www.google.ca/finance?client=ob&q=NYSE:UNG I'm wouldn't buck the trend... and the trend is ugly as ugly can get (having survived a few winters at this game)
+1 Everyone tries to pick a bottom and with the ETF`s available - 2X, 3X etc funds, avg joes are getting slaughtered! Leveraged Commodity ETF`s are so dangerous... I know way too many people who hold these things for months and get killed on re-balancing and roll over. If you want to trade short term fine - but no more than 1 week max (on the leveraged etf`s) or chances are you`ll get beat up.