From FT Alphaville:
The United States Natural Gas Fund (UNG) exchange-traded continues to mystify, this time by cutting positions over the last few days just when you would expect it not t0: that is, the day that natural gas futures soared by 8.43 per cent (see below chart).
Since about May the fund has grown exponentially — from occupying some 40,000 natural-gas derivative contracts on May 20 to about 90,000 contracts just last week.
The fund has also become one of the most actively traded ETFs in the commodity sphere. This comes despite some erratic rather than inspiring price movements in the underlying contract, as can be seen below:
What’s more, all this growth has come amidst a contango in the natural gas curve, a market situation which sees the fund register regular losses due to negative rolls month on month, irrespective of price gains in the underlying asset....MUCH MORE