Morning Thoughts – Adding to UNG

Keeping this quick. January contract is trading lower than July contract, this is not uncommon, but at $2.65 is getting extreme to me.

The weather forecast sucks, so weather related demand sucks. This is steering prices back to extreme lows. So by this screenshot, I covered KOLD yesterday because of high interest rates on borrowing shares. I got some UNG then stopped out almost immediately. Gas wobbled and then dumped.

My positions pre-market 12/3/2020 before adding to UNG

So I added UNG back on last night at $9.97, and now I’m adding now at $9.61 in Webull, pushing my total position held of UNG to 50 shares.

My positions pre-market 12/3/2020 after adding to UNG

If prices fall further after the EIA report today, I’ll start reducing UNL and start buying more UNG. Natgas prices may be weak, but they are no longer in danger of going negative, so UNG is a safer trade that a month or two ago. This doesn’t mean it is without risk. There is still risk of contango and decay associated with this contango. I just think it’s time for me to start being a bit more active with UNG.

summary:

Covered my KOLD trade for a loss of $102 – can’t win them all

added to UNG to bring my position to 50 shares

If prices turn and move lower after the EIA report, I will sell 50 shares of UNL and buy UNG with those funds. of course UNG needs to get closer to $9 to make this decision worth while.

I gotta go. Good Luck

Oldinvestor

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