Natural Gas Futures Trading Basics

Natural Gas futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of natural gas (eg. 10000 mmbtus) at a predetermined price on a future delivery date.

Natural Gas Futures Exchanges

You can trade Natural Gas futures at New York Mercantile Exchange (NYMEX).

NYMEX Natural Gas futures prices are quoted in dollars and cents per mmBtu and are traded in lot sizes of 10000 mmBtus .

Exchange & Product NameSymbolContract SizeInitial Margin
NYMEX Natural Gas Futures
(Price Quotes)
NG10000 mmBtus
(Full Contract Spec)
USD 8,775 (approx. 16%)
(Latest Margin Info)

Natural Gas Futures Trading Basics

Consumers and producers of natural gas can manage natural gas price risk by purchasing and selling natural gas futures. Natural Gas producers can employ a short hedge to lock in a selling price for the natural gas they produce while businesses that require natural gas can utilize a long hedge to secure a purchase price for the commodity they need.

Natural Gas futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable natural gas price movement. Speculators buy natural gas futures when they believe that natural gas prices will go up. Conversely, they will sell natural gas futures when they think that natural gas prices will fall.

Learn More About Natural Gas Futures & Options Trading

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