ProShares UltraShort Bloomberg Natural Gas (KOLD)
ARCA ARCA Primary 
KOLD Can Be Leveraged During Short-Term Volatility
KOLD is a 2x leveraged inverse ETF on natural gas, best suited for day trading due to its daily reset and compounding risks. Holding KOLD beyond a single day can lead to significant performance deviations, especially in volatile natural gas markets. My long-term bullish outlook on natural gas makes KOLD unattractive for buy-and-hold investors; however, exogenous events may create appealing volatility for day traders.
BOIL And KOLD: Trading Natural Gas With Leveraged ETF Products
Natural gas prices are highly volatile, with significant price swings influenced by seasonal demand, weather conditions, and inventory levels. Leveraged ETFs like ProShares Ultra Bloomberg Natural Gas ETF and ProShares UltraShort Bloomberg Natural Gas ETF offer short-term trading opportunities, providing 2x exposure to natural gas price movements but require disciplined risk management. U.S. natural gas inventories have declined significantly, supporting higher futures prices and contributing to recent market rallies.
Trading Natural Gas With The KOLD ETF Product
Natural gas prices are highly seasonal, with peaks during winter heating demand and potential rallies in summer due to air-conditioning needs. Current high inventory levels and the incoming administration's pledge to increase oil and gas output suggest limited upside for natural gas prices. The ProShares UltraShort Bloomberg Natural Gas ETF offers a leveraged bearish position on natural gas futures, suitable for short-term trades.
KOLD vs BOIL: Which is the better natural gas ETF to buy?
The ProShares Ultra Bloomberg Natural Gas ETF (BOIL) crashed by almost 9% on Monday as the natural gas prices slipped. At the same time, the ProShares UltraShort Bloomberg Natural Gas ETF (KOLD) jumped by almost 9%.
4 Best Inverse/Leveraged ETF Areas of Last Week
Wall Street was moderately upbeat last week.
Trading Natural Gas With The BOIL And KOLD ETFs
U.S. NYMEX natural gas futures experienced an +85% decline from August 2022 to March 2024, leading to an overabundance of short positions. Elevated open interest likely caused a rally in natural gas prices, followed by a decline as speculative positions were closed. Factors such as the upcoming cooling season, U.S. energy policy, and the war in Europe could lead to increased volatility in the natural gas futures market.
