natural gas seasonality
- The highest-probability annual trade, that has been the best for sudden gains, is a bullish position in natural gas from September to February. Needless to say, this is only a guide on the overall bias; timing of entry must be resolved through different factors for example the technical configuration of a chart. Additionally, there’s usually selling demand in the backend of October, so it isn’t advised to get into a position and forget about it until the backend of winter.
- It is a bad idea to establish bearish positions with unlimited risk such as short calls or short futures from September to February months. Even if fundamentals look bearish weather conditions can send gas prices upward. Natural gas often times appreciates faster than it depreciates.
- Usually, it’s a sound plan to purchase inexpensive out-of-the-money call options in the fall in preparation for a sudden upside move. But this is only a lottery ticket entry (low and limited risk, but unlimited profit potential). Even though the odds are out of favour for this type of play, years in which this sort of strategy pays off can yield substantial returns.
3 Great Natural Gas Trading Tips Conclusion
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