when the wedge line broke to the downside, it was so damn obvious the lows would be retested..we told you
commodities trade on technicals more than stocks do...why? supply and demand doesn't change fast enough in the real world so the morons trade with 'paper'..look at oil...thats not real buying and selling of REAL oil.
welocome to the scam
They converge, but converge to the market at the time of convergence. And of course farther out contracts have less time decay movement.... now... there is still a lot of time value left, otherwise those contracts would would be trading at today's spot.
You have just described how derivatives work, but I am still not sure you grasp how the decay can bleed the nav down of the fund.
UNG will go up if natgas goes up, but it will go down at a faster rate as natgas goes down.... That is key.
The more the merrier - the more the harder it is to cover in an orderly fashion. Especially if they get greedy and average down and especially also if they are joined by longs being stopped out (who become shorts at that moment). Then everyone has sold and when they want to cover there is no-one to sell to them.
How on earth could you be 100% confident being long in an investment vehicle that leaks its value every month ?
READ THE PROSPECTUS. Find out what this thing does and how it does it. Learn about time decay of derivatives.
Positive news in the form of medium term expirations tanking more than short term expirations.
Long-term, we all know this is going up. Credit Suisse says average cost of production is $8.00 BTU. We are at record low levels in terms of Spot Price/Avg Production Cost US Producers, and when that happens we'll have a few years where we overshoot and level out slightly above production cost for a few years without any unexpected hurricanes or major ripples in supply/demand equation.