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Fast Money DisclaimerFast Money BiosAbout Fast MoneyRapid RecapFast Money Home
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Sep.30
3:57 PM ET
Tuesday, 30 Sep 2008
Cold Winter, Hot Trade?

As the calendar flips over to October many traders become eager to get long natural gas ahead of winter. It’s a popular seasonal trade but lately 'nat gas' has been a widow maker.

Is this a good time to get long nat gas? Dylan Ratigan had a few concerns. They follow.

-----------------------------

Concern #1: If the economy is slowing, does it reduce the demand for natural gas?

Terranova’s Reply: Natural gas is more of an industrial fuel used for power generation as opposed to oil which is a consumer fuel. Demand should not slow.

-----------------------------

Concern #2: How important are the credit markets to nat gas companies?

Terranova’s Reply: Access to credit is very important for these companies to acquire things like rigs etc. However, right now there’s no indication that these companies have any problems accessing those lines of credits. It’s business as usual.

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Concern #3: Can you play nat gas in a way that you're less exposed to the risk?

Terranova’s Reply: Yes, Look at the United States Natural Gas Fund ETF [UNG  Loading...      ()   ].

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And if you want to play stocks in the space Terranova likes EOG [EOG  Loading...      ()   ]Apache [APA  Loading...      ()   ] and Chesapeake [CHK  Loading...      ()   ].

“Those are four good ways to gain access to the natural gas trade,” Terranova concludes.

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CNBC.com with wires

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