Investing in Natural Gas Futures on Commodity Exchanges

The most direct method of investing in natural gas is by trading futures contracts on one of the designated commodities exchanges. On the New York Mercantile Exchange (NYMEX), the preeminent exchange for energy products, you can buy and sell natural gas futures and options.


The natural gas (Nat Gas) futures contract is the second most popular energy contract right behind crude oil. Traded under the ticker symbol NG, it trades in increments of 10,000 MMBTU (1 MMBTU is equal to one million BTU). You can trade it during all the calendar months, to periods up to 72 months after the current month.


The NYMEX offers a mini version of this contract for individual hedgers and speculators. Check out the Nat Gas section of the NYMEX Web site for more on this contract.


Trading natural gas futures contracts and options is not for the faint hearted. Even by commodities standards, natural gas is a notoriously volatile commodity subject to wild price fluctuations. If you’re not an aggressive investor willing to withstand the financial equivalent of a wild roller coaster ride, then natural gas futures may not be for you.




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Source:http://www.dummies.com/how-to/content/investing-in-natural-gas-futures-on-commodity-exch.html

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