Cash gas prices didn't really jump until January and that will be reflected in next month's distribution...I think you know that. Gas is not going to implode on the warm weather because we are ending the season with 900 bcf in storage...the earliest it is going to drop is next winter if it is warm. But yes - the litigation uncertainty and the 400K #$%$ away on legal fees every month is annoying. That still doesn't make it a good short though.
I thought they were done building up the reserve for the Goebel arbitration - was supposed to be 1.6MM and they started reserving 400K / month in September. This is the fifth installment, making it $2MM and reducing the distribution by a penny.
Anyone have any insight? By "anyone" I don't mean desperate shorts like zincomez or canudigm who have lost their shirts on this in the last 2 months.
Production flat to last month. Gas is NOT less than $4 and it is not in oversupply.
I hear you man...I hate to #$%$ money away but covered most of my short Feb 7.5 puts already. You probably sold them to me. Staying short the May 7.5s and collecting the theta.
I'm expecting about 6 cents for the next distribution, then 7.5 cents after that. I'm actually rooting for a sell-off now...someone should write a bearish article on SeekingAlpha, lol.
More like 4-5 days and then cold again, but I agree, nat gas looks a little toppy here. I do think HGT will catch a bid after people see the increased distributions starting with Feb though.
I am positive on HGT regardless of the litigation...I am bullish the back of the gas curve. I am long the underlying and short covered May 7.5 calls, so I do agree with your call that 8.05 now is a stretch. People probably got excited about the cold and not noticing that the gas futures are clearly not that excited.
I think 33% IV for those calls is rich, unless "someone knows something" about the arbitration results. Either that or the damn thing is worth 12 bucks and I capped my upside...
Good points, although I disagree that the units should drop in the amount of the special dividend, i.e. I don't think it is priced in the current value. What surprises me is how well the May 7.5 calls are bid.
Ha...now you are saying, after I am short a bunch of the 7.50s...just kidding, we'll see how Monday goes, I'll probably buy some too. The selloff seemed a little overdone, the distribution wasn't that bad.
Good call. And by the way, are you the one loading up on the May 7.50 calls? I thought those were a little rich, considering you'll have about 40 cents of royalties until expiry. Or is my math off?
Yeah, covered my puts when it was there as well. Don't think the distribution was much lower than people were expecting though. I mean production declined slightly but that's not new. I'll probably be buying around 7.25-ish
Unless you are 10 years old (which by some of your logic I would guess is not too far off), try to answer my question instead of using offensive language.
You have probably never traded futures before. The very concept of mark-to-market renders the term "paper loss" meaningless. Look it up.
I would suggest that you question the very idea of being short a thinly-traded, commodity price driven security that can move against you 10% in a day, and then another 10% if the arbitration announcement is positive. But it's your money...spend it as you wish.
Define the technical term "just a paper loss" for me. Did you use Monopoly money to establish you short position? Does your broker let you use Zimbabwean dollars to trade?
Is the value of your short position now lower in REAL MONEY terms than it was when you strapped it on?
I find your logic amusing. Have you heard of the concept of marking to market? Your loss on your short position is not "real" only in your mind. What if HGT doesn't lose the arbitration?