Natural Gas like crude oil is tied to the USA economy. Natural gas
trading took off in the last couple of years; the shale gas explosion
only happened recently and this reduces the dependence of the Western
Economies and USA on the Middle East. The main users of Natural Gas are
industrial factories and power stations which use about 58% of all
Natural Gas.
Below, there are three of the most popular options in the world for trading natural gas futures
Below, there are three of the most popular options in the world for trading natural gas futures
- New York Mercantile Exchange: When it comes to U.S. exposure, you will be hard pressed to find a better starting point than the NYMEX. The exchange offers a number of contracts as well as options on Henry Hub futures (the most popular). Investors can trade these contracts in all 12 months of the year, with each representing 10,000 million British thermal units (mmBtu). One benefit to these contracts is that they trade Sunday-Friday between the hours of 6:00 p.m. and 5:15 p.m (CST), meaning that investors can make a play for approximately 23 hours every day (there is a 45 minute break period between each day).
- Intercontinental Exchange: Known as the ICE, this exchange offers both UK Natural Gas Contracts and Title Transfer Facility (TTF) futures, which are based out of the Netherlands. These two options allow for a more global perspective on this commodity as it continues to grow in popularity.
- Multi Commodity Exchange: For those looking stay invest abroad, the MCX offers exposure based out of India. Contracts are offered for all 12 calendar months with each representing 1,250 mmBtu. The smaller contracts may be a better option for investors with lower capital bases as it will cost much less to establish exposure. Note that the contracts are available Monday-Saturday, with no trading occurring on Sunday.
