Now Do You Guys Understand Why UNG Does Not Work? This is a must read because there is an important lesson to learn in UNG:
Reject all papers!
I am curious what you think moves the prices of futures contracts? Who purchases them and why? What purpose do they serve? They do move up or down so something is behind them. With the price of NG going down as much as it has in the recent past would we not expect this ETF to reflect that?
That author is a moron. Yes, I hate UNG and think it is garbage but that author is just too stupid to take seriously. A stock certificate is a piece of paper, saying that you own a right to profits and to vote. You do not actually own any physical assets. A futures contract is the right to take possession of physical assets at a particular time/place. Actually, a futures contract is more akin to actual physical possession than any stock certificate. Good luck taking your stock certificates down to IBM and demanding they hand over x amount of their products. Secondly, what if the value of a company (the stock certificates all added up) is largely based on a services company and/or intellectual property (intangibles). Nothing physical there. What a moron author.
UNG or any ETF does go up and down with the commodities in very short term.
But long term, very long term, they lose correlation. Look at USO, oil went up from low $30-ish to $80-ish, USO was stock at $30-ish all the time while oil steadily raises.
Read the article while such paper ETFs has ZERO long term correlation to their underlining commodity, and why over the long term, all of them spiral down. That is a FACT.
Now if you like to bet on short term moves instead of long term fundamentally driven trends, you might consider play it in a casino, at least the turn around time is much faster.