“Option volume is heavier than usual today on United States Natural Gas Fund, LP (NYSE:UNG), with activity rising to twice the daily average. Puts are outpacing their call counterparts so far; as we head toward midday, roughly 42,000 puts and 36,000 calls have changed hands on this commodity-based exchange-traded fund (ETF),” Elizabeth Harrow Reports From Schaeffers Research.

Harrow goes on to say, “Taking a closer look at today’s volume, one speculator opted to scoop up both calls and puts on UNG. Shortly after the open, a trader bought to open 5,500 contracts of the ETF’s June 7 put, and simultaneously bought to open 5,500 June 7 calls. In this long straddle spread, the trader is looking for the shares to make a drastic move higher or lower during the next month. The direction of the move doesn’t matter, only its magnitude.”

“Since this at-the-money straddle was opened for a net debit of $0.64 per pair of contracts, the trader needs UNG to rally beyond $7.64 (the call strike plus the net debit) or fall below $6.36 (the put strike minus the net debit) prior to June expiration. With UNG lingering near $7.25 at the time this spread was initiated, the straddle has a slight bullish bias,” Harrow Reports.

We have put together some more details on the United States Natural Gas ETF (NYSE:UNG) including a snapshot of the options activity mentioned.

The United States Natural Gas Fund, LP (NYSE:UNG) is a new way for investors and hedgers to manage their exposure to energy. The United States Natural Gas Fund LP (NYSE:UNG) is an exchange traded security that is designed to track in percentage terms the movements of natural gas prices. UNG issues units that may be purchased and sold on the NYSE Arca.

The investment objective of UNG is for the changes in percentage terms of the units’ net asset value to reflect the changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the price of the futures contract on natural gas traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire, less UNG’s expenses.

Call Options

Expire at close Friday, June 18, 2010

Strike Symbol Last Chg Bid Ask Vol Open Int 3.00 UNG100619C00003000 4.00 0.00 4.15 4.25 0 4 4.00 UNG100619C00004000 3.40 0.00 3.20 3.25 0 304 5.00 UNG100619C00005000 2.30 0.23 2.20 2.23 8 445 6.00 UNG100619C00006000 1.20 0.09 1.22 1.25 335 3,703 7.00 UNG100619C00007000 0.41 0.06 0.41 0.42 12,960 38,678 8.00 UNG100619C00008000 0.08 0.01 0.07 0.08 13,545 40,531 9.00 UNG100619C00009000 0.02 0.00 0.01 0.02 2,657 8,040 10.00 UNG100619C00010000 0.01 0.00 N/A 0.01 55 4,637 11.00 UNG100619C00011000 0.01 0.00 N/A 0.01 0 1,048 12.00 UNG100619C00012000 0.01 0.00 N/A 0.01 0 59

Put Options

Expire at close Friday, June 18, 2010

Strike Symbol Last Chg Bid Ask Vol Open Int 4.00 UNG100619P00004000 0.02 0.00 N/A 0.01 0 231 5.00 UNG100619P00005000 0.02 0.00 N/A 0.01 0 1,839 6.00 UNG100619P00006000 0.03 0.01 0.02 0.03 187 12,111 7.00 UNG100619P00007000 0.20 0.07 0.21 0.22 12,804 19,743 8.00 UNG100619P00008000 0.89 0.10 0.86 0.88 201 8,692 9.00 UNG100619P00009000 2.10 0.00 1.79 1.82 12 1,338 10.00 UNG100619P00010000 2.75 0.01 2.78 2.82 10 295 11.00 UNG100619P00011000 3.85 0.00 3.75 3.80 0 167 12.00 UNG100619P00012000 4.80 0.00 4.75 4.85 0 1

as of 05/25/2010, subject to change

Security	Quantity	Price	Market Value
Natural Gas Futures and Other Natural Gas Interests
Total Return Swaps*			$1,300,434,591.00
NYM Nat.Gas Future NG JUL10	10,863	$4.114	$446,903,820.00
ICE LOT Nat.Gas Clrd Swap JUL10	56,627	$4.114	$582,408,695.00
NYM Nat.Gas Future NN JUL10	30,978	$4.114	$318,608,730.00
US Treasurys
US T BILL ZCP 07/08/10	250,000,000	$99.98	$249,955,208.00
Cash
US DOLLARS	2,525,559,562	$1.00	$2,525,559,561.55

UNG Facts
as of 05/25/2010
NAV	$7.01
4PM Bid/Ask Midpoint	$7.05
Last Trade Price	$7.04
Units Outstanding	377,600,000
Total Net Assets	$2,647,975,004.00
Estimated Yield on Cash Holdings1	0.06%
Estimated Manangement Expenses2	0.60%
Total Expense Ratio	1.16%

ETFs offer an easy way to play Natural Gas and there are many options available besides the most popular US Natural Gas ETF (NYSE: UNG).  We have listed some options for investors to look at and compare to one another below.  Note that we have listed some industry related ETFs as well as direct Natural Gas exposure plays excluding any leveraged ETFs.        

United States Natural Gas Fund (NYSE:UNG)          

The United States Natural Gas Fund, LP (NYSE:UNG) is a new way for investors and hedgers to manage their exposure to energy. The United States Natural Gas Fund LP (NYSE: UNG) is an exchange traded security that is designed to track in percentage terms the movements of natural gas prices. UNG issues units that may be purchased and sold on the NYSE Arca. The investment objective of UNG is for the changes in percentage terms of the units’ net asset value to reflect the changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the price of the futures contract on natural gas traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire, less UNG’s expenses.          

United States 12 Month Natural Gas (NYSE:UNL)          

The investment seeks to reflect the changes, net of expenses, of the spot price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the average of the prices of 12 futures contracts on natural gas traded on the NYMEX. The fund will consist of the near month contact to expire and the contracts for the following eleven months, for a total of 12 consecutive months contracts, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire and the contracts for the following eleven consecutive months.          

iPath DJ-UBS Natural Gas TR Sub-Idx ETN (NYSE:GAZ)          

The investment seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones-UBS Natural Gas Total Return Sub-Index. The note is designed to reflect the performance of natural gas. The index is composed of the Henry Hub Natural Gas futures contract traded on the New York Mercantile Exchange.          

First Trust ISE-Revere Natural Gas Idx (NYSE:FCG)          

The investment seeks to replicate, net of expenses, the ISE-REVERE Natural Gas index. The fund invests at least 90% of assets in common stocks that comprise the index. The index is an equal-weighted index that consists of exchange-listed companies that derive a substantial portion of their revenue from the exploration and production of natural gas. The fund is nondiversified.          

iShares Dow Jones US Oil Equipment Index (NYSE:IEZ)          

The investment seeks results that correspond generally to the price and yield performance of the Dow Jones U.S. Select Oil Equipment & Services index. The fund generally invests at least 90% of assets in securities of the Underlying index and depositary receipts representing securities of the Underlying index. It may invest the remainder of assets in securities not included in the Underlying index but which BGFA believes will help the fund track Underlying index, and in futures contracts, options on futures contracts, options and swaps as well as cash and cash equivalents, including shares of money market funds advised by BGFA. It is nondiversified.          

Jefferies | TR/J CRB Wildcatters Exploration & Production Equity ETF (NYSE:WCAT)          

The investment seeks investment results that replicate as closely as possible, before fees and expenses, the price and yield performance of the Thomson Reuters/Jefferies CRB Wildcatters Energy E&P Equity index. The fund normally invests at least 80% of total assets in the equity securities that comprise the underlying index and depositary receipts based on the securities in index. The index is designed to track the overall performance of a universe of listed U.S. and Canadian small and mid-capitalization companies engaged in the exploration and production of oil and natural gas. The fund is nondiversified.

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3. Natural Gas Prices: Why It’s Time To Load Up On Natural Gas (UNG, FCG, DVN, CHK, GAZ)
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UNG