This post was just published on ZYX Short Change Alert.
This trade is only for experienced investors. Natural gas is spiking because of the weather forecast and is at $5.38 as of this writing. The logic behind this trade is that we know for sure that it is not going to stay as cold forever, however it is important to note that in a short squeeze natural gas can easily jump to about $5.80. Only those who can handle a short squeeze may consider short selling a 10% tranche in the zone of $5.30 to $5.45 and add another 10% tranche if it spikes over $5.60. Due to high volatility, it is best not to use stops but control the risk with small quantities.
An ETF is UNG. The short zone on UNG is $26.35 to $27.35. It is trading as $26.55 as of this writing. An alternative ETF is BOIL but it is not recommended for most investors because it is leveraged and can move wildly.
An inverse ETF is DGAZ. Consider this ETF only if you have past familiarity with this ETF. Otherwise consider using this opportunity to become familiar with this ETF.
