Discussion in 'Stocks' started by drukes1234, May 21, 2009.

  1. I have started to buy the UNG .. bought 1/3 of my position today and will buy more every 10-15% down.. 1-5 year hold looking for at least a 50% gain but that # will be adjusted based on trading action

    I will more than welcome a ton more selling in the UNG to continue to add to the position but if you have a long time horizon (this is not a trade) then you will do very well.
  2. good idea to start small, looking at the chart, ung just broke below strong necktie support without a single pause. So there is a risk of continuing down.
  3. I'm fully aware that it's possible, even probable that we head significantly lower, that's why I am not committing to my full position right now, only 1/3
  4. Technicals mean nothing here.

    bottom pickers once again raped.
  5. Ya ok, we'll see in 1-3 yrs who's right here buddy.. I have no concern whatsoever with this position
  6. Nice so far, but oh so much more to go

  7. 1-3 yrs holding UNG? Have you ever heard of contango? I believe nat gas will be at 8-10 within a year or two as well, but UNG will still find a way to get slaughtered. If you believe in nat gas, buy some nat gas producers. UNG is a 1-3 month trading vehicle.

    I mean, look at the curve. Jan10 is 6.09. That means nat gas can do nothing between now and then, and at BEST you are at breakeven on the UNG and the gas price is 50% higher.
  8. i'm with you bro, picked some up in March at $16.2 then a bit more end of April, $13.40.
    NOT anything resembling a daytrade or swing for that matter, just scaling into a commodity that has historically ripped well
    nice move yesterday and I'm not saying it isn't going to continue its way down but if it does, i am a buyer at $10 with a bit more size.
    just a little (or lot of) patience and for me, not using more capital than would actually impact anything i want to do intraday (or have to pay interest as it MAY be a long haul).
    good luck:D
  9. to tell you the truth, i don't know THAT much about UNG but from the research i have done on it, the rollover of the underlying contracts to the next expiration only moves the spread by a very small %.
    if you look at the price of UNG commensurate to the futures, they have stayed fairly tight. from Jan.2, 2008 to the peak on July 2nd, NG contracts rose from 7572 to a high of 13694 or 80% whilst UNG moved from 37.16 to 63.48 or 71% in the same period. since then, UNG's drop to the low of 12.73 on 4-27 or 80% and NG to 3155 or 77% kind of shows a good correlation between the prices of the two, no?
    i am just trying to figure out where you come up with the logic behind your statement that if NG is up by 50% then UNG is even, at best?
    also, is it possible that Jan.'s price of $6 is actually counting on a slight economic recovery and increased demand thus higher prices? i mean, if it is a GIVEN that the price can only come down from $6, then you should short the hell out of it, no?
    truly, i rarely trade commodity futures or the ETFs composed of them so i am way opened to learn, especially if it can make me a buck or two.
    thanks a lot and good luck trading whatever you trade
  10. cokezero


    Please beware of the Natgas contango situation.

    If you look at the Dec 2010 Natgas futures it's already trading at close to $6. If you buy the current futures contract
    you lose money each time you roll your contract over.

    UNG is actually buying NG futures contract and is no different than holding futures contract outright and rolling it over each month. They only difference is you pay a management fee on top.

    So if you buy UNG at the current price and by year end Natgas goes to $6 you're only breakeven instead of making a profit. That's a 50% penalty against you! You can still make a profit of course but again the roll over cost is going against you.

    Unless you're trading for the short term buying futures or ETFs is a very expensive way to get into a Natgas position.
    #10     May 29, 2009