Natural gas prices have fluctuated from a low of $2.50 to over $6 this year. They are now trading around $5. When there are large ranges like that, a sharp trader may be able to profit from this.

For the investor who wants to trade natural gas, there are plenty of ways to do so. This article will touch upon several different investment vehicles that a trader can use. Your investment choices will range from investing in companies that produce natural gas, all the way to Natural Gas ETFs that trade the natural gas futures contract on NYMEX.

Why should you look at the natural gas market? With the growing concern of carbon emissions’ and carbon footprints, natural gas is a cleaner burning fuel and will used more than coal. Natural gas is also plentiful here in the Untied States so there will also be a push to use domestically found energy.

Supplies of natural gas are increasing. This is another reason to trade nat gas. With better ways of drilling for natural gas, plus new gas fields that have been discovered, you should see an increase in natural gas usage. Plus you also have Americans wanting us to use our own energy resources here at home as opposed to importing our energy needs.

Recently Billionaire T.Boone Pickens has been promoting the use of natural gas for producing electricity and using it as an alternative fuel for vehicles. And just this week Exxon has purchased XTO Energy, one of the largest natural gas companies around. If the big boys are looking at natural gas, shouldn’t you?

How to Trade Natural Gas ETFs

ETF is an Exchange Traded Fund. An ETF is similar to a mutual fund. An ETF can be made up of several stocks in that sector. An example would be the SPDR S&P Oil & Gas Exploration & Production ETF, ticker symbol XOP. This fund tries to replicate the total return performance of the S&P Oil and Gas Exploration & Production Select Industry Index. This fund holds stocks in natural gas companies that are involved in exploration and production of natural gas. Some of the stock that make up this fund are ExxonMobil, Chevron, Conocophillips, Occidental an Chesapeake Energy Corp. Please refer to the funds prospectus for the current holdings of the fund.

Currently the United States Natural Gas Fund is the largest natural gas etf. This fund trades the natural gas futures contract on the New York Mercantile Exchange. This fund purchases the front month futures contract. it hold them until 2 weeks before the contract expires.

I hope this has interested you in trading the Natural Gas ETF. Please look further into this exciting market.

There are many more ways to trade gas etf .You can read more about natural gas mutual funds Don’t reprint this exact article. Instead, reprint a free unique content version of this same article.