settlement pricing
Posted: Sun Feb 06, 2022 2:45 pm
here is a chart of settlement prices to settle hedges written using NYMEX as the index
https://mecny.com/nymex-natural-gas-mon ... t-pricing/
Note: Feb NG closed at 6.26!!!! It's not the average of the month, it's point in time! So CRK and others will have to write a huge check for what they "hedged" difference between 6.26 less the swap price 2 say 2.56 (6.26-2.56)= 3.70 per MBTU.. If they only averaged 3.76 for the month they got ZERO FOR THEIR PRODUCTION.
AEGIS wrote:
Maybe you faced this problem in February, where losses on NYMEX hedges caused you to write a big check to the bank, but you will not receive an equivalently higher cash price for your gas during February.
https://aegis-hedging.com/insights/why- ... n-february
The key is to have basis swaps. Without them, writers of hedges were screwed blue and tattooed
The fact that AEGIS took time to do a special report says someone said WTF and has a problem.
https://aegis-hedging.com/insights/why- ... n-february
https://mecny.com/nymex-natural-gas-mon ... t-pricing/
Note: Feb NG closed at 6.26!!!! It's not the average of the month, it's point in time! So CRK and others will have to write a huge check for what they "hedged" difference between 6.26 less the swap price 2 say 2.56 (6.26-2.56)= 3.70 per MBTU.. If they only averaged 3.76 for the month they got ZERO FOR THEIR PRODUCTION.
AEGIS wrote:
Maybe you faced this problem in February, where losses on NYMEX hedges caused you to write a big check to the bank, but you will not receive an equivalently higher cash price for your gas during February.
https://aegis-hedging.com/insights/why- ... n-february
The key is to have basis swaps. Without them, writers of hedges were screwed blue and tattooed
The fact that AEGIS took time to do a special report says someone said WTF and has a problem.
https://aegis-hedging.com/insights/why- ... n-february