The energy market is a fast-paced, evolving arena. And it’s one that an increasing number of traders have discovered. Physical natural gas trading offers an excellent chance to take full advantage of a captive market. Traders can enjoy an exciting, profitable experience.
Building up your knowledge in the natural gas sector has several benefits. It not only allows you to achieve your full potential but also makes sure industry experts take you seriously. Trading courses can be a great way to boost your understanding and increase your confidence. They also offer the status and authority you need to head to the top of your career.
At DTN, we want to help you grow your marketability so that you can pursue bigger and better opportunities. Our high-quality courses can take you from a novice trader to an in-demand expert. Reach out today to see if our industry training and certifications are right for you.
What Is Natural Gas Trading?
The trading of natural gas and other energy resources as a commodity is a fairly recent phenomenon. It gained momentum and strength throughout the 1990s. Natural gas used to be merely a byproduct of oil production, but now it is a valuable item in its own right.
As the cleanest-burning fossil fuel, natural gas is commanding more and more of the energy market. It provides about one-fourth of the United States’ energy use, so it makes sense that investors have taken note.
Natural gas trading works in much the same way as trading any other commodity, such as gold, silver, or corn. The primary markets for natural gas are:
- Industrial Complexes
- Domestic Heating
- Power Generation
For energy commodities, the weather plays a significant role. This fact is especially true of natural gas because of its role in heating homes throughout the country.
Physical Natural Gas vs. Financial Trading
When it comes to gas trading, there are two main areas to consider:
- Physical sale of natural gas as a commodity
- Financial trade of natural gas derivatives
As the name suggests, physical natural gas marketing involves buying, selling, and trading the actual commodity. That is, it involves physical delivery of the product to the buyer. It is one of the most volatile products on the market, which makes education that much more crucial.
However, with financial trading, there is no exchange of a physical product between the buyer and seller. Instead, the focus is on speculating what the market will do.
Learn the Physical Market
Understanding the logistics involved in the physical natural gas market makes you highly desirable to many companies. If you’d rather work solo, physical natural gas trading courses help you navigate the ins and outs of this commodity.
For those wanting to work in the natural gas market, there are a lot of opportunities once you complete courses or a training program. Classes can help you secure jobs in sales, transportation, and accounting within the energy sector.
One critical piece of knowledge that you need to learn to work in the industry is how the various contracts work. Remember, in physical trading, the product changes hands through an agreement between a buyer and a seller.
There are typically three types of physical contracts:
- Swing Contract – This flexible agreement is also known as an interruptible contract. Neither party has a legal obligation to deliver or receive an exact amount of gas.
- Baseload Contract – This contract also offers some leeway. Both parties agree to make their ‘best effort’ to receive or deliver natural gas. In a baseload contract, both sides generally agree not to end the contract due to movements in the market price.
- Firm Contract – As the name indicates, this contract is set in stone. This is a legally binding agreement between the buyer and seller.
If you pursue courses and training in the physical natural gas industry, you will receive a thorough understanding of how these contracts work.
Is Physical Gas Trading Risky?
All trading on the stock market carries risk. Every commodity trade, from corn to copper, carries risk. The potential consequences, good or bad, are what make this career exciting for many people.
Natural gas trading is a volatile market. But with high-quality training and the proper tools, you can learn how to work profitably in this sector.
The fundamental forces behind the physical natural gas market are the same as in any other commodity: supply and demand. When you know your way around the industry, you will be able to use consumer habits to your full advantage.
What Are Physical Natural Gas Trading Courses?
Coming to grips with the energy industry can be a challenge, especially if you are relatively new to the business. A physical natural gas trading course will offer the education you need to take the first steps in the industry. It provides a secure, stable foundation upon which to build your career and be taken seriously as a trader.
Energy Trading Certification
In addition to stand-alone classes, you may want to pursue certification. Becoming a Certified Energy Trading Professional (CETP) allows you to enter your new career with confidence.
You receive support and education based on the newest tools and research. Starting from a strong background means you can hit the ground running and make the most of every opportunity.
To improve your marketability, look for courses and certifications that:
- Provide an overview of the physical gas markets.
- Explain different methods in trading physical natural gas.
- Develop your understanding of price risk.
- Develop your management of market exposure.
- Provide time to learn about various pricing structures.
- Explain physical natural gas logistics and operations.
- Compare and contrast physical and financial trading.
Do I Need Training?
Many workers in the industry benefit from a physical natural gas trading course. This type of training prepares you to understand the market as a whole. With the education you receive, even if you’re not the one trading, you’ll learn how better to support those who are.
These classes benefit anyone working in natural gas in the following capacities:
- Gas Trading
- Transportation, Supply, and Operations
- Risk management
- Marketing and Sales
- Energy Purchasing
- Accounting and Management
- Strategic Planning
Why Choose DTN?
As the popularity of energy trading has grown, certification and training programs have become more valuable. The DTN instructors have the skills, experience, and expertise you need to succeed in the energy trading market.
Getting started in trading physical natural gas can unlock a lucrative new career with plenty of potential. Reach out today, and see how we can help you take those first steps.