Wt Nat Gas 2x Discussion Threads

[ian chapple] 16/12/2009 16:55

Another shot at the arithmetic of this. If I look at the HH price today it is nearly the same as this time last year. In that year the NGAS has dropped from about 80 to 33. The square of this equates roughly to the drop from 10 to 1.55 of the LNGA. The problem, as rightly pointed out, is the contango effect. I calculate this to have averaged a decline of about 2% compound per week. If you want to make money therefore the HH price needs to rise more than 2% per week. Any comments? What has driven up the ETF this past week?

[jl202] 10/12/2009 16:22

Another 25% from here wouldn't go amiss ;)

[wig123] 07/12/2009 13:57

didnt expect it so soon mind! ;-)

[didierdrogba] 05/12/2009 12:41

I think this ETF could be a buy and hold if there was no contango/rollover problem and the natural gas price was obviously trending up. (LSIL's been okay for me). Unfortunately it isn't!

[wig123] 04/12/2009 14:28

gotta be some severe upside from here?

[jotoha2] 04/12/2009 13:55

gdasinv...please dont talk rubbish , there is no way anyone would invest and hold for 2 years, dont confuse the newbies ....thanks.

[jl202] 04/12/2009 08:58

Doesn't seem to have any relation to market at all this one, guess stock is being dumped?

jl.

[gdasinv2] 03/12/2009 22:04

I am surprised the last storage report was only 2mbcf higher, lets see tomorrow report, i have invested 2000£ , will wait 2 years to see what happens

[brando69] 03/12/2009 16:38

how can it get to zero? would that not mean that gas was being given away? every time i look at my gas bill, i don't see much evidence of that, sadly.

[jotoha2] 03/12/2009 15:52

When it gets to zero , they will close the ETF.

[jl202] 26/11/2009 08:52

Bounce off 1.2 support - dead cat seen in the vicinity,

jl.

[jl202] 19/11/2009 13:08

Why should the medium term be weighted negative, is that the contango?

jl.

[hodginsjkp] 18/11/2009 22:58

AB
What do you mean by forward unleveraged above. Is there an ETF taking that into account or only spreadbetting/futures/options?

[andrewbaker] 18/11/2009 14:32

The volatility in price plus the leverage combine to make this a poor hold over more than the very short term. For investors who see natural gas going up over the longer term, the unleveraged version is a better bet, and the forward unleveraged may help reduce contango too.

[jotoha2] 15/11/2009 12:59

Pb , agree with you there, have had 3 goes at this and only made money once ,so as you say ,its for daytrading only!

[pbracken] 14/11/2009 16:26

You're right, jotoha; Ian Capple is ignoring the effects of the pull backs in the price of gas, which translates into one step forward two steps back for LNGA.

If you time it well, LNGA can be extremely lucrative. But it requires very close attention. That's why it's a traders' stock; investors should steer well clear.

[jotoha2] 14/11/2009 14:31

If thats the case and I dont belief it , why has this droped nearly 50% since its recent high but the price of gas has nearly doubled since september , look at the chart , never mind the excel.

[ian chapple] 14/11/2009 13:14

If you want to understand how this moves with respect to the straight (gas related) ETF simply take the sqare of the ETF move. For instance if gas moves X2 up this will move X4 if gas halves this will quarter. If gas goes up 10% this will go 21% and going down if gas goes to 90% this will go to 81%. You can model this on Excel very easily.

[pbracken] 12/11/2009 15:18

It's not pretty, jl. When LNGA was last at these levels NG was around $2.50. It's presently over $4.40 - a sober reminder of the effect of the contango.

You wouldn't bet against LNGA falling below $1.00. That might be an opportunity to trade technically. But just now, this stock's a gambler's play (further weakness in gas prices is a very real possibility) and that ain't for me.

We need to see gas revert to fundamentals and that needs a downside adjustment to reflect the over supply. Until there is a demand-led (rather than a technical-led) recovery in NG, LNGA should be avoided for those inexperienced in intra-day trading.

[jl202] 12/11/2009 13:12

Toilet time?

jl.

[gdasinv2] 10/11/2009 15:52

LNGA Entry point, last time I taken entery between 1.2 - 1.3 sold at 2.5 ...70% return and entered again - With Copenhagen summit - The price may got 3 times within 1-2 months.

[jl202] 05/11/2009 08:38

Good post pbracken - not expecting a multibagger on this one,

jl.