The primary objective of UGAZ (VelocityShares 3x Long Natural Gas) is to amplify the daily performance of UNG by three times or 300%. In other words, if UNG price raises 1%, UGAZ will generally show a daily gain of 3%. You should think about trading UGAZ when you have a bullish sentiment on UNG.
More about ugaz:
Like most geared inverse products, nysearcaugaz stock news at https://www.webull.com/quote/nysearca-ugaz is designed to be used as a tactical trading tool, not as a buy-and-hold investment. The note promises to provide 3x exposure to its reference index—the S&P GSCI Natural Gas Excess Return Index—for a one-day holding period. The daily reset function means investors holding UGAZ for periods of longer than one trading day will be exposed to the effects of compounding and could see returns vary greatly from the headline 3x exposure. Since UGAZ tracks an excess return version of the S&P GSCI Natural Gas Index, returns will reflect the changes in the price of natural gas and returns from rolling futures contracts, but not any income from collateral. The ETN wrapper provides tax efficiency with no K-1. Although its fee is extremely high, trading costs are of greater importance, since the fund is designed for intraday round-trip trades.
Ugaz and Dgaz
The primary target of DGAZ (VelocityShares 3x Inverse Natural Gas) is to generate profits from the losses in the UNG fund. DGAZ will tend to amplify the losses by three times or 300% inversely. Thus, if UNG price falls by 1%, DGAZ should bring you a profit of 3%. Accordingly, you would consider this leveraged ETF when you have a bearish sentiment on the UNG fund. As you could note, both UGAZ and DGAZ have 3:1 leverage, which can significantly increase your potential profit.
That said, the profit potential is directly proportional to the risks assumed. However, whether I’m trading stocks or ETFs, I use to trade options to place my bets strategically. Moreover, it doesn’t pay dividends, which is another serious drawback that investors should know about. The main reason for this is because UNG doesn’t keep stocks representing a sector but uses future contracts and OTC swaps to catch and mimic the natural gas price. Even if UNG is not a good investment per se, speculating with UGAZ and DGAZ may be suitable. The short-term volatility is not affected by the long-term drop of the UNG fund, and you are not interested in dividends when keeping positions for up to several days. You can also check Nyse rht news at https://www.webull.com/quote/nyse-rht .