Playing around crude oil and nat gas
Who's up for this trade ? Long WTI, Short NatGas...
We're looking at the spread (or ratio actually) WTI/NatGas.
So this is a pure opportunistic trade, based on nothing more than historical volatility.
Of course, talking energy in these unprecedented times is risky... but hey, that's what trading is all about.
We all know what's happening in Europe, we all know Europe desperately needs natural gas...
We know the US is there to send LNG to Europe and elsewhere...
And then there is, as always, the global economic outlook, the Fed... which all seem to lead to lower demand in the near future, hence lower oil prices.
So why the heck going long WTI/Natgas ???
Anyways, let's take a look at this WTI/Natgas ratio. It's around 10 at the moment.
This article from CME is really interesting, enabling us to understand the relationship between crude oil and nat gas :
https://www.cmegroup.com/education/articles-and-reports/are-crude-oil-natural-gas-prices-linked.html
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