$ProShares Ultra Bloomberg Natural Gas (BOIL.US)$ Future is ...
$ProShares Ultra Bloomberg Natural Gas(BOIL.US$ Future is -0.48% only but ETF is already -2.8%… looks so fake!
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70628772 : When you see the price of Boil, somehow, it has a cap, 3.37. When the price wants to break it, there is a pressure to bring it down. Yesterday the pressure point was about 3.4. Well...
Mafiosa818 70628772: cap 3.37 cannot go further than that?
PhotoSynth 70628772: Contango effect is the main contributing effect to this difference. Fund has to roll over into buying more expensive futures every rollover. This difference dilutes the funds value on an ongoing basis when the underlying asset NG does nothing. Of course it all becomes irrelevant when the market is running as the money moves fast and hard. But just sitting in BOIL or UNG long terms will cost you the farm for as long as gas sits at this , or any level, as the prices will continue to decline in much the same way options decline from time decay. It’s just a different reason for the steady predictable decline based on the spread ratios in the futures market.
So, sitting in these things as they flop around the bottom is a bad trade, unless you believe the pop is “imminent”. But if investing in these., you’re probably better off war Hong the markets behavior very closely and making a deliberate decision to get in for a “ move” . Because you’re gonna pay pay to sit on a position daily until this market moves. And right now, it’s all about infrastructure, infrastructure, infrastructure,…. On both sides of the pond. Right now we’re bootstrapped to limited LNG output until 2025 when some of this infrastructure is coming online. So between now and then, we have producers overproducing despite the price knowing that the bigger demand picture doesn’t truly set in for at least another 1-2 years whereby Gas cetainly won’t be trading anywhere near $2.00/Mmbtu. The only other catalyst for volatility is weather. And right now, we’re in shoulder season, …..so it won’t be til late June or the first week in July that we find out just how much gas we’re using to power the A/C of a hot summer. And production, which has remained as undisciplined as could possibly be since November.