KOLD - KOLD: Don't Warm Up To It
2024-03-28 12:03:21 ET
Summary
- ProShares UltraShort Bloomberg Natural Gas ETF is an inverse fund that provides exposure to declining natural gas prices.
- The bear case for natural gas includes factors such as economic downturns, renewable energy shift, and oversupply issues.
- The KOLD ETF carries potential rewards of profiting from falling natural gas prices, but also risks such as volatility decay and thus is not suitable for long-term holding.
Let me preface this article by saying I am broadly against shorting . It doesn't work over time, has unlimited risk, and is nearly impossible to time perfectly. I'm also broadly against inverse funds. Sure - the loss potential isn't unlimited when going long an inverse fund as opposed to shorting an asset, but the problems remains the same. Having said that, I know people like to speculate with these funds, especially in fast-paced and volatile commodities markets....
KOLD: Don't Warm Up To It