They just keep moving apart. Look at the first graph shown in the first few seconds. Oil is an international commodity and natural gas a local US energy source pumped to mid western factories and northeastern homes.
He mentions two trades:
- 1) Buy natural gas futures and sell oil futures. Not recommended since the divergence can last longer.
2) Sell integrated oil companies, XOM, etc.. in your portfolio and buy natural gas companies like Chesapeake.
I would edit the above to include:
- Buy natural gas ETF LEAPs and sell Oil ETF LEAPs
Sell short integrated oil and buy natural gas companies as a pair trade.
Worth listening to.
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