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DELTA PETROLEUM CP Message Board

  • orangeflash7210 orangeflash7210 Jun 15, 2009 2:42 PM Flag

    natural gas price

    is up >8% today. That DPTR and CHK are down doesn't mean much. NG stocks are more volatile than the market.
    Does anyone know why NG is up so much today??

    Thanks

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    • =DJ GETTING PERSONAL: Hot Natural Gas ETF Faces Trading Snag
      By Ian Salisbury A DOW JONES NEWSWIRES COLUMN
      NEW YORK (Dow Jones)--One of the hottest investments on Wall Street
      may have gotten too big for its own good.
      With investors betting on rising gas prices, assets in the United
      States Natural Gas Fund (UNG) recently swelled to almost $3.7 billion
      from about $670 million in February, even sparking fears it could be
      disrupting the futures market.
      Now the popular exchange-traded fund is days away from another
      potential problem: Funds that hold commodities typically face stiff
      restrictions on the number of shares they can issue to meet investor
      demand, and United States Natural Gas is running out fast. Securities
      and Exchange Commission filings show managers want to increase the
      number of shares available nearly 10-fold. But such requests can take
      weeks and there is no telling when the SEC will act.
      If the fund can't issue enough shares to meet investor demand, its
      shares could begin trading at prices higher than the underlying value
      of their holdings, breaking a key promise ETFs make to investors and
      possibly influencing prices in the natural-gas futures markets.
      Exchange-traded funds resemble open-end mutual funds but trade on an
      exchange like a stock. The issue is the latest in a string of
      surprises that have trailed more exotic types of ETF, especially ones
      that hold commodities. It also highlights the friction between ETF
      firms and regulators, such as the SEC, whom fund company executives
      often complain misunderstand and unnecessarily delay many requests
      regarding ETFs.
      SEC spokesman John Heine declined to comment directly on the case of
      the natural gas fund but said the Commission is sensitive to issuers'
      time constraints.
      The SEC's position involves trade-offs, says Michael Berenson, a
      securities lawyer at Morgan Lews in Washington. If the regulator
      ignores the ETF's predicament, it could risk harming the fund's
      shareholders. But rushing might not be fair to other ETF firms with
      business before the SEC. "It puts everyone else back in the queue," he
      says.
      Commodity ETFs have proved wildly popular with investors but have had
      their share of growing pains. Investors were initially dismayed to
      discover some funds, including ones designed around oil and natural
      gas, match returns of futures contracts, not spot prices, which can be
      substantially different.
      The funds also became embroiled in last summer's controversy over
      whether speculators were creating an energy price bubble and by other
      worries about whether large investors have taken advantage of the
      funds' need to roll holdings each month, profiting at fund-holders'
      expense.
      ETFs accommodate investor demand by essentially creating new fund
      shares whenever investors want to buy them. But commodity funds, with
      a unique legal structure, don't have the same flexibility in this
      regard as stock ETFs.
      Anticipating a spike in demand earlier this year, managers of U.S.
      Natural Gas Fund filed with the SEC to boost the number of shares the
      fund kept available by about 300 million in late March. By early May,
      the SEC had yet to act, and the company made another filing warning it
      had only about 8 million shares in reserve and could soon run out.
      The original request was granted a few days later, but only after the
      fund had been unable to meet investor demand for about two days,
      nearly imperiling its operations.

    • It´s Monday !!!

 
DPTRQ.PK
0.050.0000(0.00%)Mar 13 1:43 PMEDT

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