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Look Out For Nat Gas ETN Premium
February 08, 2012
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Holders of the iPath Dow Jones UBS Natural Gas Sub-Index Total Return ETN (NYSEArca: GAZ) may face troubles in the near future as its premium reached close to 15.5 last Friday, according to an article on The Street. With such a high premium, it becomes difficult for investors to predict the movement of the fund, according to the article. For example, the United States Natural Gas Fund (NYSEArca: UNG) fell 1.5 percent and GAZ rose 2 percent on Friday, yet both are designed to follow the performance of natural gas futures, the report said. As GAZ’s premium continues to grow disconnected from its underlying net asset value, investors may lose out big if the ETN’s price quickly snaps back to its NAV, according to The Street. Go to TheStreet.com for more information.
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JP Morgan & ETN Credit Risk
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