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Nat-Gas ETF Grows Again

By Don Dion

About this article:
The United States Natural Gas ETF stepped into the over-the-counter bilateral swap market last week to deal with position limits in the commodity markets. Bilateral swaps are made off the market with a specific counterparty and are not subject to the position limits of futures and exchange-traded swaps. The fund also said that it is not responsible for rising prices, and the evidence is clearly in its favor, as the massive rise in UNG accompanied a drop in natural gas prices. However, the fund is also at the point where it is forced into the unregulated and illiquid market of bilateral swaps. Commodities futures markets are not like equity markets, and the UNG saga is a case in point. Natural gas prices are falling, but investors keep buying UNG. Maybe the market will turn around, but it won't be due to investor buying. More on U.S....

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