Here is the text of my post about the price difference between DGAZ and UGAZ over time:
A case study that supports the idea of shorting NG via DGAZ.
05/20/2015 the front month contract - NGN15 (July15) - open at 3.005
DGAZ opened at 25.00 100% in July contract
UGAZ opened at 3625.00 100% in July contract
10/01/2018 the front month contract – NGX18 (Nov 18) – open at 3.007
DGAZ opened at 17.69 100% in the NOV contract
UGAZ opened at 74.43 100% in the NOV contract
Natural gas was essentially priced the same at opening on those two dates, however during the 3 1/2 years between those two dates:
DGAZ decreased in value 29.2%
UGAZ decreased in value 97.9%
Contango is your friend when you trade DGAZ
During the time period between the two dates DGAZ had one reverse split at 5:1 (MARCH 16, 2017).
UGAZ had three reverse splits:
10:1 Dec 20, 2017
25:1 March 14, 2016
5:1 Sept 10, 2015
I rechecked the value of the underlying contracts, NGN15 and NGX18, on which the value of UGAZ and DGAZ was based on those dates. They are correct. I rechecked the value of UGAZ and DGAZ at the open on the respective dates. They are correct.
Thanks for questioning my findings. I was surprised as well when I first investigated my supposition. I will be happy to send you links to the web pages showing the underlying data. I would do it now but its bed time.
