Ugaz: 说一句别不爱听.

See a lot of people want to load Ugaz at $13 level and hold through the winter, 说一句别不爱听, Ugaz will probably be under $10 after one month or two.

First of all, the Decay will kill you. look at the Swing Decay last month, Sept 8th, Ugaz closed at $14.26, NG Price $3.876, right now, Current real time NG price $3.88, Ugaz around: $13.36, almost $1 is gone....

Ugaz/Dgaz Contango rollover from Oct 7th to Oct 13th, each day 20%.

See the Nov Contract and Dec Contract price, almost 10c diff.

Nov Contract: $3.884
Dec Contract: $3.974

By Oct 14th, your Ugaz may lose 5% for the  Contango rollover,

Check the Supply/Demand and one month Weather predication...next 2-3 weeks, mostly will be 3 digit Injection...and there will be probably 2-3 weeks extra Injection weeks this year,  6% supply higher than that of last year,  new pipeline wait to come online, Inventory Deficit mostly likely be removed by end of November or early December, NG price most likely will continue go down, if NG go down to $3.6-$3.65 level in November, your Ugaz will be under $10.

If you really want to Trade Ugaz, take profit on time each swing, never hold it...

Good luck!
 

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• Make sense. Thx for sharing! -ghost6- ♀ (0 bytes) () 10/07/2014 postreply 06:07:14