Last Updated :
18 September 2009 at 16:50 IST
How speculators were hit in Natural Gas ETFs?
By Max Chen Speculators who got into the
Natural Gas exchange traded fund (ETF) in the hopes of capitalizing on its rolling of futures contracts got hit instead. The speculators thought that the roll would send prices down, so they shorted October gas.
United States Natural Gas (NYSEArca: UNG) rolled its October contracts and bought November contracts on Sept. 14. The roll will wrap up today, reports Asjylyn Loder for
Bloomberg. John Hyland, chief investment officer for the fund, said that the speculators had “only a random chance of being right.”
Trade commodities or equities from across the globe. Join Now Meanwhile, it was widely expected that the Commodity Futures Trading Commission (CFTC) would move in on the energy sector first, but the CFTC revoked position limit exemptions in
Wheat and
Corn for two Deutsche Bank AG PowerShares commodity funds: PowerShares DB Commodity Index Tracking (NYSEArca: DBC) and PowerShares DB Agriculture (NYSEArca: DBA), effective at the end of October, writes Nevil C. Speer for
Cattle Network.
As these new regulations are discussed, many wonder what the implications could ultimately be. Commodity related ETFs are usually “long-only” positions that focus on the buy side in the market. It is the long position that has many believing these types ETFs are helping to artificially drive up market prices. Others argue that market prices have little to do with ETFs but with fundamentals – supply and demand are seen as the real drivers of commodity prices.
If the CFTC begins regulating the industry, some believe that restrictions added could divert funds to less regulated exchanges and cause hedging business overseas to move to other markets with different regulations. In the meantime, other funds may limit issuance of new shares in the coming months, which would reduce liquidity in the markets.
The regulations imposed by the CFTC could eventually distort prices in the markets and risk management could become more difficult to handle.
(Courtesy: ETF Trends)
MCX LEADMINI 29 February 2012
contract was trading at
Rs 105.9 , up Rs. 0.6 . What's your view on it?
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