Contract Purpose
This outright contract allows market participants to:
- Gain direct exposure to the price of natural gas at Henry Hub
- Hedge against price fluctuations in the North American natural gas market
- Speculate on the future price direction of natural gas in the United States
Market Significance
- Benchmark Status: Serves as the primary pricing point for natural gas futures in North America
- Global Reference: Used as a benchmark for natural gas pricing in international LNG contracts
- Regional Indicator: Provides insights into supply and demand dynamics for natural gas in the U.S. market
Trading Benefits
- Price Discovery: Offers a transparent mechanism for determining the price of natural gas based on actual supply and demand
- Risk Management: Allows hedging against price volatility in the natural gas market
- Market Access: Provides exposure to one of the world’s largest and most liquid commodity futures contracts
This contract is particularly valuable for energy companies, utilities, industrial consumers, and commodity traders active in the natural gas market. It offers a tool for managing price risks and implementing trading strategies related to natural gas in North America, with nearly 24-hour electronic access and high liquidity.