NEW YORK ( TheStreet) -- Don Dion posts his current insights on the stock, bond, commodity and currency markets in his RealMoney blog, anticipating which ETFs will be in play next. Here are three of his blog posts from the past week:
An Opportunity in Natural Gas
Published 4/7/2011 2:50 p.m. EDT Look past today's natural gas supply report and toward new legislation that could rapidly transform the industry. If you don't have exposure to natural gas companies such as Noble Energy ( NBL), PetroQuest ( PQ) and Stone Energy ( SGY), today is the day to pick up the First Trust ISE-Revere Natural Gas Index Fund ( FCG). While higher-than-expected supply levels have sent natural gas prices plunging in the short-term, $108-per-barrel oil is still a force to be reckoned with. The pressure of prices at the pump is causing politicians and investors alike to look for alternatives. According to NewsOK (a news source in Oklahoma) a bipartisan effort is under way to get the gears turning on a bill that would increase the nation's supply of vehicles fueled by natural gas. This short-term supply blip is a good entry point for a longer-term natural gas run if the bill keeps gaining momentum. > > Bull or Bear? Vote in Our Poll FCG offers exposure to a well-balanced portfolio of natural gas companies that would benefit from the natural gas initiatives that continue to be pushed forward by certain politicians. While the idea of these new vehicles may seem far-flung to some, gas prices are roaring and it's a good idea to get early exposure to tomorrow's alternative.
Investors in First Trust ISE-Revere Natural Gas Index Fund saw new options begin trading this week, for the September 18th expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 240 days until expiration the newly trading contracts represent a possible opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration.