What Are Natural Gas Futures & How To Trade Them

What Are Natural Gas Futures and How Do They Work?

Natural gas futures—like all futures—are derivative products that allow traders to buy or sell standardized contracts. In this case on the CME, that represents a certain quantity of natural gas on a specific future date.

The delivery location for natural gas futures is the Henry Hub in Erath, Louisiana. When someone talks about U.S. natural gas prices, they are referring to the Henry Hub futures.

The hub is connected to eight pipelines, three intrastate pipelines, and storage hubs. This integrated infrastructure makes the Henry Hub an efficient pricing benchmark for the U.S. market.

As the expiration date approaches, the price of natural gas futures converges with the spot price. Consequently, the Henry Hub natural gas futures price effectively determines the transaction price at the hub.

Retail traders use natural gas futures to speculate on the price of the commodity, which is influenced by supply and demand, geopolitical events, and weather forecasts to name a few.

Producers and utilities trade natural gas futures to lock in prices, hedge against volatility, and manage costs.

What Natural Gas Futures Can I Trade?

Natural gas futures give traders access to one of the world’s most-traded commodities. The award-winning* tastytrade platform lets you trade several different natural gas futures.

Whether you're a seasoned trader or just beginning your journey in the futures market, we offer various natural gas futures products with different contract sizes and settlement methods to suit your needs.

Natural Gas Futures Trading Hours

Natural gas futures trade nearly 24 hours a day, six days a week. Trading for the week starts at 6:00 p.m. Eastern Time (ET) on Sunday and ends at 5:00 p.m. on Friday. There is a 60 minute break each day beginning at 5:00 p.m.

Learn more about futures trading hours

Trade Natural Gas Futures With Low Commissions

At tastytrade, commissions are competitive. Futures contracts are $1.25 to open and $1.25 to close. Micro futures contracts are $0.85 to open and $0.85 to close.

Learn more about tastytrade's commissions and fees

How to Trade Natural Gas Futures

First, open an account on tastytrade. Then, research the market to understand why prices are trading where they are. Focus on fundamentals and implied volatility to gain insights into market sentiment and potential price movements.

Decide which natural gas futures product is suitable for your risk tolerance. E-mini Natural Gas (/QG) and Micro-Henry Hub (/MNG) are available for smaller account sizes. Once you're ready, you can then open, monitor, and manage your position.

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