ProShares UltraShort Bloomberg Natural Gas (KOLD)
The Case For Trading Natural Gas With The BOIL And KOLD ETFs
I rate ProShares Ultra Bloomberg Natural Gas ETF and its bearish counterpart KOLD a Buy as tactical trading tools amid heightened volatility. U.S. natural gas prices pivot around $3/MMBtu, with volatility driven by global LNG demand and geopolitical risks in Europe and the Middle East. BOIL and KOLD are suitable only for short-term risk positions due to leverage, time decay, and high management fees; strict risk management is essential.
KOLD: A Leveraged ETF Not For Investors
ProShares UltraShort Bloomberg Natural Gas ETF is designed to deliver twice the inverse daily performance of natural gas prices. KOLD's leveraged structure makes precise timing critical. Long-term returns for KOLD are typically negative.
From KOLD To BOIL: 2X Leveraged Momentum Plays On Natural Gas Futures
ProShares Ultra Bloomberg Natural Gas ETF and its inverse ProShares UltraShort Bloomberg Natural Gas ETF, better known respectively as BOIL and KOLD, offer 2x leveraged exposure to natural gas futures, suitable only for tactical, short-term trades. Both ETFs are designed for directional momentum plays, not buy-and-hold strategies, due to amplified decay during sideways and volatile markets. Recent natural gas price spikes, driven by a polar vortex and short covering, have made BOIL attractive for leveraged upside, but reversal risk is high.
Trading With The KOLD And BOIL ETFs: Cautiously Bullish On Natural Gas
Natural gas is entering its peak demand season, with prices rallying 77% since August and futures for winter delivery trading above $4.50 per MMBtu. Bullish factors include seasonal demand, rising LNG exports, and ongoing geopolitical tensions, while high inventories and long-term trends remain bearish. ProShares Ultra Bloomberg Natural Gas ETF (bullish 2x ETF) is rated a Buy, and ProShares UltraShort Bloomberg Natural Gas ETF (bearish -2x ETF) is rated a Sell, reflecting expected winter price strength, but both are only suitable for short-term trades.
KOLD: This -2x Momentum Play Is Now Exhausted
KOLD is a 2x leveraged inverse ETF on natural gas, suitable only for short-term momentum trades, not for buy-and-hold investing. Natural gas prices are at key support levels, and seasonality data suggests a likely rebound in prices heading into September. Storage levels are elevated but not alarming, with robust U.S. production and weaker summer demand pressuring prices downward.
KOLD Can Be Leveraged During Short-Term Volatility
KOLD is a 2x leveraged inverse ETF on natural gas, best suited for day trading due to its daily reset and compounding risks. Holding KOLD beyond a single day can lead to significant performance deviations, especially in volatile natural gas markets. My long-term bullish outlook on natural gas makes KOLD unattractive for buy-and-hold investors; however, exogenous events may create appealing volatility for day traders.
Natural Gas Is Moving - BOIL And KOLD Magnify Price Moves
Natural gas futures have been highly volatile in 2025, offering frequent double-digit trading opportunities for disciplined, active traders. BOIL (bullish) and KOLD (bearish) leveraged ETFs provide amplified exposure to natural gas price swings but come with high risk and time decay. Current natural gas inventories are lower than last year, supporting prices, but seasonal demand remains subdued, impacting short-term price action.
BOIL And KOLD: Trading Natural Gas With Leveraged ETF Products
Natural gas prices are highly volatile, with significant price swings influenced by seasonal demand, weather conditions, and inventory levels. Leveraged ETFs like ProShares Ultra Bloomberg Natural Gas ETF and ProShares UltraShort Bloomberg Natural Gas ETF offer short-term trading opportunities, providing 2x exposure to natural gas price movements but require disciplined risk management. U.S. natural gas inventories have declined significantly, supporting higher futures prices and contributing to recent market rallies.
Trading Natural Gas With The KOLD ETF Product
Natural gas prices are highly seasonal, with peaks during winter heating demand and potential rallies in summer due to air-conditioning needs. Current high inventory levels and the incoming administration's pledge to increase oil and gas output suggest limited upside for natural gas prices. The ProShares UltraShort Bloomberg Natural Gas ETF offers a leveraged bearish position on natural gas futures, suitable for short-term trades.
KOLD vs BOIL: Which is the better natural gas ETF to buy?
The ProShares Ultra Bloomberg Natural Gas ETF (BOIL) crashed by almost 9% on Monday as the natural gas prices slipped. At the same time, the ProShares UltraShort Bloomberg Natural Gas ETF (KOLD) jumped by almost 9%.
4 Best Inverse/Leveraged ETF Areas of Last Week
Wall Street was moderately upbeat last week.
Trading Natural Gas With The BOIL And KOLD ETFs
U.S. NYMEX natural gas futures experienced an +85% decline from August 2022 to March 2024, leading to an overabundance of short positions. Elevated open interest likely caused a rally in natural gas prices, followed by a decline as speculative positions were closed. Factors such as the upcoming cooling season, U.S. energy policy, and the war in Europe could lead to increased volatility in the natural gas futures market.
Top Performing Leveraged/Inverse ETFs: 03/31/2024
These were last week's top performing leveraged and inverse ETFs. Note that because of leverage, these kinds of funds can move quickly.
KOLD: Don't Warm Up To It
ProShares UltraShort Bloomberg Natural Gas ETF is an inverse fund that provides exposure to declining natural gas prices. The bear case for natural gas includes factors such as economic downturns, renewable energy shift, and oversupply issues. The KOLD ETF carries potential rewards of profiting from falling natural gas prices, but also risks such as volatility decay and thus is not suitable for long-term holding.
Top Performing Leveraged/Inverse ETFs: 02/11/2024
These were last week's top performing leveraged and inverse ETFs. Note that because of leverage, these kinds of funds can move quickly.
KOLD: Time To Book Your Winnings (Rating Downgrade)
The ProShares UltraShort Bloomberg Natural Gas ETF (KOLD) has returned 122% since October 31st due to seasonal weakness in natural gas. KOLD is only suitable for short-term trading as it suffers from extreme 'volatility decay' and has poor long-term returns. Although natural gas prices have plunged due to warm weather, rising geopolitical tensions could be a wildcard that supports prices in the near term.
5 Top Inverse/Leveraged ETFs of Last Week
Wall Street delivered lackluster performances last week, mainly due to rising rate worries.
KOLD: A Speculative Short Term Tool
The ProShares UltraShort Bloomberg Natural Gas ETF aims to provide investors with -2x daily performance of the Bloomberg Natural Gas Subindex. The fund has taken advantage of the fall in natural gas prices in the U.S. this year, with a 70% gain. KOLD is a highly speculative tool with a 122% annualized volatility, and it is not recommended for buy and hold strategies.
Opportunity Today Is In Energy, Especially Oil And Gas - Chris DeMuth Jr.
Chris DeMuth Jr. discusses his investment strategy for 2023 and the current state of the market. He expresses his preference for the energy sector, particularly oil and gas, due to mispriced equities and potential for cash returns.
KOLD: Wait Until Year-End
The ProShares UltraShort Bloomberg Natural Gas ETF is not a long-term investment due to volatility decay and poor long-term performance. Fundamentals and seasonality support higher natural gas prices, so shorting natural gas futures may not be a good bet at this time. Speculators interested in the KOLD ETF should wait until the end of the year when natural gas prices typically decline for a potential trade.