Thread by @ALikhodedov

NATGAS FUTURES AND ETFs (#BOIL, #UNG)

With US #natgas trading at 2.5y low and wek fundamentals, there is a big growth in positions in gas ETFs: #BOIL (2x levered) and #UNG.

Is it driven by retail bottom pickers? The real story is more complicated. Here ft.com/content/b527f4…… twitter.com/i/web/status/1…

For UNG and BOIL we can also see the increase in the share count and market cap ahead of the roll.

What could be the motive for a professional fund to short ETF, instead of doing the same trade via futures?

Aside from mandates/simplicity a fund might expect the ETF doing… twitter.com/i/web/status/1…

Does it matter if the shares are created to satisfy the demand of the short sellers or on demand from bottom pickers (longs)?

I believe it may since the effect on the final futures position could be different:
•When ETF is created in response to demand from the long side (e.g.… twitter.com/i/web/status/1…