The saga of UNG continues…
Earlier this week, the US Natural Gas Fund (UNG) ETF said that despite regulatory permission, it would not be expanding its float, perhaps out of concern that new regulations would make it hard to properly play the derivatives market.
So, what’s UNG to do?
WSJ: Among the options, the fund is considering moving to offshore energy exchanges or further into unpoliced over-the-counter swaps markets to avoid Commodity Futures Trading Commission rules that would limit the size of its natural-gas positions.
The ETF also is considering investing in other energy markets to keep its natural-gas holdings within regulatory limits, John Hyland, the fund’s chief investment officer, said in an interview. “We are taking steps now to get ahead of the process,” he said.
Other energy markets? Yes, UNG may start buying crude oil, heating oil and coal, all in a scheme to best-synthesize the price of Natural Gas.
How do you think that’s going to work out?
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