Frequently Asked Questions

• 1.  

  What is natural gas trading?

  Natural gas trading means the buying and selling of the product with the aim to make profit from the difference in price.

  Natural gas is considered a commodity, and as it is the case with other commodity trading, there are several ways to invest in it.

  • You can invest in natural gas by selling and buying it in its physical shape
  • You can invest in natural gas through natural gas futures and natural gas CFDs.
  • You can invest in the stock of natural gas producing companies.
  • You can invest in funds that track natural gas prices or companies involved in natural gas production and distribution.
  • You can invest in professionally managed funds that hold shares in natural gas companies.
  • You can invest in energy infrastructure companies transporting, storing, or processing natural gas.

  If you are wondering which way is the best, you should know that there are no fixed answers for that. Choosing the best way to invest in natural gas depends on your level of experience, your risk tolerance and your financial goals.

  It is often advisable to have a variety of ways of investing. In this way, you can find out which one works best for you and set a more balanced portfolio: Losses from one way can be offset from wins from another.

  2.  

  What are natural gas futures?

  Standardized Contracts: Each contract specifies the quantity (e.g., 10,000 MMBtu on NYMEX, 1,250 MMBtu on MCX).

  Leverage: Traders can control large positions with a fraction of the total contract value.

  Hedging & Speculation: Used by businesses to hedge against price fluctuations and by traders to profit from price movements.

  Expiration & Settlement: Futures contracts have a fixed expiration date, and they can be settled physically or closed before expiration for a cash settlement.

• 3.  

  How can I invest in natural gas?

  As it has been mentioned before, you can invest in natural gas in a variety of ways, ranging from physical trading, futures, and CFDs.

  However, the first step for natural gas investing is to study the market and have a full image about the factors that can influence the price of natural gas.

  After that, create a strategy that is based on your capital, your risk tolerance, and your financial goals: Are you aiming for long term investment or a short term investment?

  If you decide to go for futures or CFD trading, it is important to find a trust broker who offers competitive trading conditions ranging from tight spread, fast execution, multiple account types, fast withdrawal and excellent support.

  After you compare the brokers and find the perfect fit for your financial goal, you can open a demo account and start testing out your strategy.

  When you develop enough confidence in your skills, shift to a live account and place your first orders.

  4.  

  What is the lot size for natural gas contracts on MCX?

  The Multi Commodity Exchange of India (MCX) is the largest commodity derivatives exchange in India,

  On the Multi Commodity Exchange (MCX), the lot size for natural gas futures contracts is 1,250 MMBtu (Million British Thermal Units).

  Contract Specifications for Natural Gas on MCX:
  Lot Size: 1,250 MMBtu
  Tick Size: ₹0.10 per MMBtu

  Margin Requirement: Varies based on volatility and exchange regulations

  Expiry: Monthly contracts, typically expiring on the last business day of the contract month

  Traders use this lot size to determine the total contract value and margin requirements when trading natural gas futures on MCX.

• 5.  

  What are the trading hours for natural gas futures?

  The trading hours for natural gas futures vary depending on the exchange. Here are the trading hours for major exchanges:

  • 1. Multi Commodity Exchange (MCX) – India
    Monday to Friday:
    Normal Session: 9:00 AM – 11:30 PM (IST) (up to 11:55 PM during daylight saving in the U.S.)
  • 2. New York Mercantile Exchange (NYMEX) – U.S. (CME Group)
    Sunday to Friday:
    Electronic Trading (Globex): 6:00 PM – 5:00 PM (ET) (with a 60-minute break from 5:00 PM to 6:00 PM)

  These hours allow traders to access the market almost 24 hours a day, making natural gas one of the most actively traded commodities worldwide.

  6.  

  What factors influence natural gas prices?

  • Supply and Demand
    A higher supply of natural gas can lead to lower prices as the supply can suffice the demand around the world. Additionally, The amount of natural gas stored in reserves affects availability and pricing, especially before winter.
  • Weather conditions
    Sunday to Friday:
    Natural gas is used mainly for heating purposes so the colder the winters get, the higher the demand is. If the supply is disturbed while the demand is getting higher, the prices might spike.
  • Economic and Market conditions
    Additionally, conflicts happening in the areas where natural gas is produced can also affect the price as they disturb the productions, and limit the supply. Environmental policies, taxation, and energy regulations can impact natural gas production and costs.
• 7.  

  What are some common natural gas trading strategies?

  • Trending following
    You have most probably heard the quote: the trend is your friend. This trading strategy is actually putting that saying into action. Using indicators, traders identify long-term and short-term trends.
  • Range trading
    Near support level, traders buy the asset. Near resistance, they sell. The aim is to take advantage of fluctuation in price within a set range.
  • Breakout trading
    Once the price of natural gas breaks above resistance, or below support, level, traders enter a trade.
  • News-based trading
    Traders wait for the breaking news that has a huge impact on the prices of natural gas and react according to the changes.
  • Spread trading
    Inter-Commodity Spread: Trading natural gas against crude oil or heating oil to exploit price correlations.

  Intra-Commodity Spread: Trading different contract months (e.g., buying summer contracts, selling winter contracts).

  8.  

  Where can I find live natural gas futures prices?

  You can find live quotes that are regularly updated on the prestigious financial websites such as:

  • Investing.com – www.investing.com
  • TradingView – www.tradingview.com
  • Bloomberg – www.bloomberg.com
  • MarketWatch – www.marketwatch.com

  Moreover, you can find natural gas prices on the platforms offered by the online broker. STARTRADER for example offers:

  • Daily analysis from Trading Central.
  • Regular and live natural gas prices on their different platforms like: MT4, MT5, Copy Trade and App.
  • STARTRADER app also offers live updates and alters to ensure that you never miss a chance.

  Finally, U.S. Energy Information Administration (EIA) – www.eia.gov publishes weekly natural gas storage reports and market trends

• 9.  

  How can I start trading natural gas?

  To start trading natural gas, you first need to find a trusted broker. Here is checklist you can follow to find the best fit:

  • Regulations: a regulated broker means that your capital is safer as regulated brokers abide by the rules set by the regulatory bodies.
  • Trading conditions: it is important to choose a broker that offers competitive spreads, and fast execution as those can increase your potential growth. High flexible leverage is also a good option, but you need to be careful of the risks that come with this one.
  • Trading accounts: Most brokers offer a demo account that allows you to test your skills with virtual money. After that, you can choose between STP, and ECN based on your goals and experience.
  • Support: If you face a problem, you need to be able to address it right away. A broker that offers support around the clock in multiple languages will make your trading journey much smoother.

  Risk management: Opt for a broker who offers

  • Stop-Loss & Take-Profit Orders: They allow automatic closure of trades at predetermined levels to limit losses and secure profits.
  • Negative Balance Protection: It prevents your account from going into a negative balance due to high volatility.
  • Guaranteed Stop-Loss Orders (GSLOs): It ensures a trade closes exactly at the stop-loss price, even during extreme market movements (usually with a small fee).
  • Slippage Control: It helps minimize price gaps that can lead to unexpected losses during fast market movements.
  • Margin Call Alerts: it notifies you when your margin level is low to prevent forced liquidation.

  After you choose a good fit broker, open your demo account, and study the natural gas market in detail. Set up a strategy and test it on your demo account.

  Open your live account when you gain enough confidence in your skill. Do not forget to monitor your trades and set stop-loss orders.