The other major avenue to trade natural gas is to trade futures contracts. To trade futures, you must open an account with a registered commodity futures broker. Futures trading allows traders to take leveraged positions in a particular commodity and the resulting gains or losses can be significant in relation to the required margin deposit per futures contract. There is a large number of natural gas futures contracts, each based on delivery dates and locations. Traders focus on the most active contracts, which are the Henry Hub natural gas futures, symbol NG, and the e-mini natural gas futures, symbol QG.
Futures traders focus on the value of a "tick" or minimum price change per contract. For the NG futures contract each tick is 1/10 of a cent on the price of natural gas and for QG, a tick is 1/2 of a cent. In both contracts a tick change is worth $10. If the price of natural gas changes by 10 cents, the value of an NG contract will change by $1,000 and the QG contract will gain or lose $250.
A futures trade can be opened in either direction: long or short positions. A long position profits from a rising gas value and a short position is taken if the price of gas is expected to decline. For each contract in a trade, a trader must have on deposit a minimum margin amount, which will be restricted in the trading account. Currently the initial margin deposit for a NG contract is $4,050 and a QG contract requires a deposit of $1,013.
Natural gas futures contracts are available with monthly expirations for the upcoming year and annually out to five years. Traders focus on the near month contract where the majority of volume and pricing action occurs