Velocityshares 3X Inverse Natural Gas Etn (DGAZ)

[wz9ytp]

I know...i've had many arguments about this in the past and have lost much money because of this as it applies to NG, oil (brent, WTI, and all others), gold, VIX, coffee, milk and ALL other commodities. Here's my understanding of it.

NatGas March delivery contract expires Feb 24 2017. On Feb 24 one will pay say 3.00 for NatGas delivered in 30 days and 3.10 for delivery in 60 days.

On Monday when the March contract is gone, why would he want to suddenly pay 3.10 for delivery in 30 days? Just one market day later, right? Oftentimes the price will trickle back down to the expired contract's closing price within a day or two. Dgaz or ugaz will not jump to meet the new current contract's price, it'll just remain at Feb 24th closing price and will open Monday morning at that price. BUT as NG trickles down, it'll bring U down and D up 3x that spread, thus making (or losing) money for d (u) holders.

Watch tonight 6:00pm investing.com's NatGas price open. Probably see a gap up. It won't be a gapper, it'll be a chart roll. They will be showing April contract instead of March's contract... the difference between Friday close and tonight's open will be the contango spread...

Hope this helps!

Happy trades!