What is not known is how cold it gets and how much demand there will be in the short term. And that’s why this is such a volatile contract because it’s focused on the short term more than anything else. It’s also influenced by the futures markets, which is actually where natural gas is traded, not the CFD markets. So, you are currently trading the forward month, which is going to be focusing on colder weather than we have right now, which is why the price has elevated.

This lasts for a while, and then sometime in the middle of winter, they start pricing in spring, which means less demand and the market rolls over. Yet again, this is a cyclical trade, nothing more, nothing less. At this point in time, if we do pull back, there’s probably value to be had, but it’s not something you go all in on.

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