Opinions
Daniel Straus
Horizons NYMEX Natural Gas
HUN-T
TRADE
Dec 06, 2023
Stock price when the opinion was issued
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There are 2 seasonal periods for natural gas. One is the cooling season in the summertime and the other is the heating season in the wintertime. Natural gas has a tendency to perform well from Sept 5 to Dec 21. Chart shows a nice base, and if it is able to break above that, it will be very positive.
There is a huge amount of oversupply in natural gas. You might want to look at Horizons Natural Gas Yield ETF (HNY-T), which is a Covered Call on natural gas. It has a very interesting yield of about 15% because of the Covered Call premiums they are getting off of natural gas. That is the way he would play natural gas. However, you have to be prepared for a lot of volatility.
Natural gas?From a seasonal perspective, natural gas does really well from September 6 into December 21, and we are on the doorstep for December 21. In the last couple of days, natural gas has started to pull back. The end of the year tends to be extremely negative. Refiners in the southern states are taxed on inventory, so they tend to dump it into the market.
Seasonality for natural gas is from September 5 to December 21. This is because, with seasonal investing, you want to be in there before everybody else gets in. The big withdrawals for natural gas is when it is actually used, January and February. In effect, you want to buy the rumour. When everybody else starts to pull in, that’s when you want to get out. Natural gas is down again today. He has a Stop on his position. The warm weather is really exciting things up, and demand has been low.
Commodity-futures ETF, you need an undergraduate course in derivatives management. No ETF can actually hold natural gas, just nat gas futures. Good for traders, but can erode in value over the long term.