Nat Gas Up 16% On Lack Of Speculative Squeeze

Tyler Durden's picture

The CFTC and the SEC are both having lunch with Optiver right now, as all other speculators have been definitively driven out of the market.

No comment on the chart below.

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Sardonicus's picture

looks like global warming got debunked at 7:30 am and now an ice-age is predicted.

JohnKing's picture

Looks like hi-freak algo testing with commodities, did someone just open up a front running switch?

curbyourrisk's picture

And awwwwaaaaayyyyy we......go!

lizzy36's picture

14% of natt gas mrkt is producers (long short)

86% is speculators.

rally started last week with someone taking off a large oct/nov spread.  massive short covering when it hit $3 and $3.05. roll starts monday.

lizzy36's picture

no idea.  mostly because they have been trading almost mutually exclusive of one another, such that theprior relationship has almost been nullified (just mho)

Anonymous's picture

UNG's roll should push the market down. With a $1.00 spread between Oct and Nov, they will need to sell a lot more Oct contracts than they will buy for Nov.

max2205's picture



SEC Probing Market Manipulation by ‘Advanced Trading Systems’

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By David Scheer

Sept. 10 (Bloomberg) -- The U.S. Securities and Exchange Commission is “rigorously” investigating whether traders are using technology to manipulate markets, the agency’s enforcement and inspections chiefs said today.

The regulator is probing suspected “market manipulation based on complex use of technology and advanced trading systems,” said SEC Enforcement Director Robert Khuzami and acting examinations director John Walsh in testimony prepared for a Senate Banking Committee hearing. They mentioned the inquiry among a list of pending cases, also including unspecified Ponzi schemes, hedge-fund abuses and insider trading.

SEC spokesman Kevin Callahan said he couldn’t immediately comment beyond the testimony.

To contact the reporter on this story: David Scheer in New York at

economessed's picture

Ever wax nostalgic for open outcry?

So much money and resources poured into exploiting weakness in the electronic trading landscape in the name of untethered greed, yet we can't figure out how to educate 30% of our kids about subjects like basic math.

Our priorities are 180 degrees out of phase with what we need to do to survive as a society.

Anonymous's picture

Let's look at your reply from the perspective of incentives. Incentives for teaching kids subjects like basic math vs. incentives of exploiting weakness in the trading market. One makes you a lot of money, the other makes you a great teacher. Pick one.

KeyserSöze's picture

Fast Forward one year later:

SEC revists Program Trading investigation still open seeking input


Anonymous's picture

Does EIA report show a big draw down of Nat Gas stockpile?

Anonymous's picture

WEEEEEEEEEE!!!!! Up 27% since July when I switched brokers, and not 1$ in the US$. This investing stuff is easy! If Canada didn't have some somewhat goofy gun laws, and had better weather, maybe I'd move... hmmmfff.. Maybe Norway.

Anonymous's picture

Maybe the SEC can get Madoff to advise them on how to regulate this problem. He has some free time, apparently.

Anonymous's picture

This is hardly rampant upward speculation. After today's 16% rise, the October gas future still has 32% to go just to get back to its early-August price and 30% to go to catch up with the November future.

lizzy36's picture

What would you call the biggest one day percentage gain in almost 5 years?

Demand destruction continues (see MON) and storage is 20% above 5 year average heading towards full for the first time ever. 

So this must be slow value investing, right?

Anonymous's picture

How low can NGAS go?

Could the price have already factored this high level of inventory?

Seemed like we reached capitulation with record numbers of shorts and the way the price slided into last week.

Anonymous's picture

How low can natural gas go?

Could the high level of inventory already be priced in, it has been talked about for a while.

It seemed to me we reached capitulation last week with the price slide and the record volume of shorts.

Anonymous's picture

Bloomberg shows that the spot price actually went down. From my calculation, UNG has approx 0.5B of cash on hand and they've been switching out of swaps into physical contracts. They are propping up the market before their roll.

Anonymous's picture

gaz dropped a bit below a long term trend lind at 12.00. this was the third touch and every thing happens in three.

the money flow was really low the week about a week before, and the the RSI gve the buy signal last friday. Now I don't

tyler you yourself have mentioned that the olic to nat gas ratio was at a six sigma event.

With how much the markets have moved up this was the onl play bound to make real money esp as heating season gets closer.

I wish I had made my buying and selling a bit bettter, but such is life as I am a novice.

You look for low money flow, then try and get confirmation a bit later by rsi as usually money flow is a bit early on pulling the trigger.

I think natural gas was the best play out there to park some money.

Anonymous's picture

Been waiting for ENCANA to have a 6% yield........

Anonymous's picture

Some people forget that the spot (next day gas) rallied from below 2.000 at Henry to 2.800 in less than a week. This market is supply and demand driven and it rallied way more over a few days.

Natural's picture


Hmm lets only talk about the rallies and ignore that it sold off almost the whole way back the next day....

100 vol? take em.   def a buyer at that level. 


Natural's picture

And since when does Optiver trade nat gas size?   riiiigghht... thats a pretty funny comment.  Good info.