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Commodity ETF UNG Halted to issue new shares
UNG, the equity ETF symbol that is the largest holder of NG contracts by size, had its symbol halted today, while they issued new units.
The halt lasted longer then expected as the number of new units to be issues is larger then most would expect.
What is interesting is the CFTC is now reviewing USO and UNG for exceeding their limits. In the case of USO, it was over 20% of the front month of the CL market. Market rules are going to have to be adjusted, or changes in how speculation is monitored or controlled is coming.
ETFs have grown larger than expected, and now by the rules of the system, will have to be adjusted for. How that happens is not yet decided.
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Thanks I had no idea. Geee this has been such a loser I am shocked more units are in demand. I think smart money is long futures and short UNG till it doesn't work
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NG on its way to 2bucks. With all the supply out there, I don't know why there would even be a 4-5 dollar value to NG.
GLD ETF is a materially different structure from USO or UNG which are essentially securitized commodity pools (CPOs). GLD is technically neither a security or a futures, read: http://www.wcl.american.edu/blb/01/3ritter.pdf
"...gold ETFs do not appear to satisfy the definitional element relating to delivery* in that the trust underlying the ETFs shares actually owns the underlying gold."
*to determine whether gold ETFs are futures
To Anonymous #5744, this is material news...
First, take a look at DAG and see what happened to agricultural commodities circa June 2008 when DAG hit position limits. Second, research ongoing futures-spot convergence issues in grain markets: http://www.cftc.gov/newsroom/generalpressreleases/2009/pr5651-09.html. Many industry participants (ie, commercial bona fide hedgers) believe there is a connection between index funds and dysfunctionality in futures-spot relationship in commodities.
congress could care less abt gold... has nothing to do with consumers' out-of-pocket expenses, compared to energy or food (ags, meat, softs, etc.).
central banks and IMF will be doing more than their share of limiting the rise of gold...or will they....!
but i doubt limits will come into play here.
P.S., replying to my own post, i wish i'd registered the name Aaron_Burr.
appreciate the bloomberg snapshot... I read an article on this as well. Makes you wonder about limits on GLD Etf as well.
i have no clue why this is important news