Enter the Dragon: 8 China and Emerging Markets Plays
OptionsZone Experts, June 5, 2009
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4. United States Natural Gas Fund (UNG)
By Michael Shulman
The belief in the growth of China and emerging markets is fueling—pardon the pun—overall speculation in oil and natural gas, as well as other commodities. The emerging markets trade is also putting pressure on the U.S. dollar, which, when it falls, also pushes the price of oil up. So you want to play commodities as part of your emerging market trade—and the one with the best fundamentals right now is natural gas.
Natural gas, due to high inventories, is trading at near historic lows compared to oil. This environmentally friendly fuel will grow in value over time, so look at the United States Natural Gas Fund (UNG), the exchange-traded fund (ETF) for natural gas. The short-term trade is a call option on the UNG; longer term, this ETF is a classic buy and hold.
UNG is one of the Top 10 Summer Stocks that will heat up your portfolio.
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