Natural Gas is one of the best commodities to trade on the market right now. However, being a natural resource, it can be subject to many unpredictable changes. Changes that can affect it's pricing at a dangerous level. Besides, it is not renewable, which would make it even more expensive down the line.
All of this requires a lot of research and attentiveness from the side of traders. Which means that only the most dedicated ones opt for Natural Gas while leaving more casual traders to a less time-consuming commodity.
Unfortunately, there have been many red-flags for the future of Natural Gas, in terms of new ways to utilize renewable energy and make it eco-friendly. All of this could lead to the severe price fall of the commodity before it reaches its peak scarcity. But, as of now, there is nothing to worry about.
Best Times to trade Natural Gas
The demand for Natural Gas always increases during winter. The reason behind it is pretty simple. More heating technology will be activated in homes and therefore more Natural Gas will be consumed, racking the price up.
Most of the times traders don't need to worry about this as their brokers regularly update them with signals. For example, if you visit this CFD Broker Finq.com review here to learn more you'll find out that regular signals are key to customer satisfaction and massive gains. So based on that information if you are a holder of Natural Gas futures you will most likely receive signals about its price volatility between December and February. So it's best to keep your head up.
It is quite astonishing how much a single producer or a trader can impact the pricing of natural gas through futures purchases. For example, producers use a short hedge in order to specify a selling price of their product, while businesses use hong hedges to buy natural gas at an acceptable price.
Natural gas price movements are quite volatile, because of how susceptible they are to nature. This ultimately gives speculators to trade natural gas futures in order to assume the price risk of hedgers and turn a quick buck. If you decide to speculate, its common to buy when reports come in about a potential price increase and sell during downfall times.
The main attraction for CFDs is their availability pretty much everywhere in addition to their trading simplicity. The CFD dealers have various requirements for their margins, sometimes as low as 3% with no commission, making them irresistible for most traders. Oil CFDs are definitely the leaders of the industry, however, suffer a lot more price fluctuations than natural gas CFDs, making the more risk-easy customer base to start switching. Natural gas CFDs can mostly be found on the futures market rather than the spot market. The primary reason why you could opt for CFDs is that they offer a way better margin than futures, therefore making them a lot more profitable and safe. Not only that, but both on the UK and US market you'll have access to flexible strategies to trade diversify your assets with CFDs.
Natural gas ETFs can be referred to as commodity ETFs. Their purpose is to track a commodity index which is generally made up of asset-guaranteed contracts and futures. Physical asset owning is a huge rarity in commodity trading, therefore most of the times you'll be purchasing contracts backed by the commodity when trading natural gas ETFs. With ETFs, you will have the ability to access Natural gas futures with more liquidity for hedging and speculative formats. Small time frames are not advised when trading natural gas with ETFs, however long and medium-term contracts have shown to bring profits on a much larger scale.