We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

As Natural Gas Cools, Trading Sizzles - Research Paper Example

Comments (0)
Summary
Class: As Natural Gas Cools, Trading Sizzles Introduction The free-fall in the prices of natural gas over the last quarter of this year has had a surprise effect on its trading. For example, more investors have come in to cash on the plummeting commodity…
Download full paper
GRAB THE BEST PAPER
As Natural Gas Cools, Trading Sizzles
Read TextPreview

Extract of sample
As Natural Gas Cools, Trading Sizzles

Download file to see previous pages... The discussion explains this characteristic by use of the laws of demand and supply in relation to price. The discussion winds up by looking keenly into the words of Wall Street journal reports on the trade benefits if gas prices drop in the short term only to rise in the long term. Increased Trading and Investing Over the past 3 months, the prices in the natural gas have fallen by 53%, hence, revenues for the investors who had invested heavily then are very low. Surprisingly, with the fall in price, the industry has experienced more interest from traders of the commodity than it had witnessed last year at any one point. This has been explained by the fact that as prices have been falling; the transaction costs of the commodity have proportionately been falling too. Many of those investing today are basing their decision on the future expected increases volume in trading expected at 31% increase. The number of new contracts being signed went up to 2.53 million contracts representing a rise of 20% when compared to the same period last year (Cui And Dicolo). Explanation/ Analysis Some investors are investing in the value and the trend in the industry. As the prices continue falling, it is expected that the demand of the natural gas will go up and since the market is far from saturation, the investors want to heavily invest at least in the short run as trading continues plummeting. On the other side, some traders expect that this is the lowest price that the commodity can be traded and that soon, in the long term, the prices will go up and they can in the long run continue trading at the normal or even at a higher price (Cui and Dicolo). Therefore, this is bullish and a bearish market with benefits for both investors. The supplier has flooded the market especially with the newfound shale gas discovery. Since the demand of the natural gas was static with new discovery, the supply outstripped this demand lowering the prices. At 2 dollar’s range, many of the investors who are entering the market expect that with this rock-bottom state in the prices, they can continue trading at a loss or at least minimal returns on their investments because the prices will soon go up. However, analysts are warning that this may not be the rock bottom in essence. Last year, many investors speculated that then the prices were at their lowest only to be surprised that they dipped even lower this year. As Hyland explained, “just because the price of natural gas is trading at 2 dollars it should not automatically mean that they cannot go lower.” These words came true to one Mr. McLane the president of an asset management company who invested in the industry in the hope that the prices were at their lowest only for them to continue on a free-fall this year and he then had to close his position (Lowenstein 14). On the idea of trading on volatility, managers know that it may be profitable to ride in this wave of anxiety. More people are willing to invest in this anxiety than those who are quitting the market. Hence, with various guarantees, some firms are lending out funds to those who are willing to risk in the hope that future prices will go up. To them, it is not about how the bet will go only that whichever way it goes, they will reap their capital and the interest rates that they are lending at. These are the benefits that the capital markets are making out of this volatility. Just like every other ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Dolphin Natural Gas Project
This research focuses on the Dolphin Natural Gas Project in the Persian Gulf which is one of the most sensitive of the gas projects that exist in the region. This is due to the fact that it involves three countries namely the UAE, Qatar and Oman. During the inception, each of the three partners was tasked with a role and responsibility in the project.
14 Pages(3500 words)Research Paper
Gas price
This paper will analyze various aspects of gas prices including its relation to the price of oil and the determination of gas prices. In addition, the paper will address the causes of escalating gas prices, impact of this increase in prices and recommend some solutions to this issue.
5 Pages(1250 words)Research Paper
The Economic Impacts within the Oil and Natural Gas Industries
It provides an economical source of energy that facilitates transportation and manufacture of various goods and services. It also makes huge economic contributions to the nation. This is because the oil and natural gas industry is the largest employer in the U.S.
5 Pages(1250 words)Research Paper
Natural gas in Saudi Arabia
The main natural gases have chemical composition with the main constituent atom being carbon. During production the natural gas is separated from the oil. In the past this gas used to be treated as a mere by product that was flared up as it was only considered dangerous to try to collect.
5 Pages(1250 words)Research Paper
A particular type of energy: wind, solar, hydropower, or a fossil fuel (coal, oil, or natural gas) Address from a global or regi
This has wide ranging implications on energy conservation, in addition to providing hope to reverse decades of needless pollution taking place around the world. The reality is, however, that solar power is still rarely used when compared to other energy sources and has proved difficult to implement on massive scales in many communities.
6 Pages(1500 words)Research Paper
Exploring for Oil and Natural Gas
C2C decides the range of risk and pay off proposition. It can image and analyse the picture of seismic imaging about the underground geography. The company's expertise is in finding the presence of oil and gas. The company can image reservoirs to predict the possibility of detecting the presence of oil.
6 Pages(1500 words)Research Paper
Trading System
The most critical assumption underlying the design of this trading system is that the fund is having a risk appetite that represents a judicious mix of risk assumption and risk aversion. This implied that it is assumed that the fund would definitely be interested in riding a wave but not to the peak but obtain gains much before the peak and go short somewhere between the bottom and the peak.
10 Pages(2500 words)Research Paper
Currency trading experience
This enabled me to achieve aspects of efficiency, flexibility and effective trading. The company also offers an excellent variety of services: I had the chance to experience an economical and flexible trading
2 Pages(500 words)Research Paper
Insider Trading
Economically analyzing the situation in which an individual violates the insider trading laws can help in judging whether a penalty serves its purpose of discouraging violation of insider trading laws. An individual would commit such an act after weighing the
1 Pages(250 words)Research Paper
Currency trading simulation
The platform can provide an opportunity to practice on how to conduct market research by providing a host of tools like historical prices, performance charts and historical trading data for various industries and indexes. The technical analysis enables
3 Pages(750 words)Research Paper
Let us find you another Research Paper on topic As Natural Gas Cools, Trading Sizzles for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us