Traders looking to buck the trend can utilize inverse or bearish ETF options to hedge bets in the coming months. For instance, the VelocityShares Daily 3x Inverse Natural Gas ETN (NYSEArca: DGAZ) seeks to provide the daily inverse 3x, or -300%, performance of the NYMEX natural gas futures. The ProShares UltraShort Bloomberg Natural Gas (NYSEArca: KOLD) provides the daily inverse 2x, or -200%, performance.
“Investors should note that while UNG has a high correlation to the daily moves of natural gas futures, the costs of “rolling” from one futures contract to the next exact a serious toll on long-term holders of the ETF. For instance, while continually rolled natural gas futures (the most commonly viewed chart) are up 14 percent over the past year, the UNG is down 29 percent,” according to CNBC.
For more information on the natgas market, visit our natural gas category.