As Natural Gas Cools, Trading Sizzles Research Paper

As Natural Gas Cools, Trading Sizzles - Research Paper Example The discussion explains this characteristic by use of the laws of demand and supply in relation to price. The discussion winds up by looking keenly into the words of Wall Street journal reports on the trade benefits if gas prices drop in the short term only to rise in the long term. Increased Trading and Investing Over the past 3 months, the prices in the natural gas have fallen by 53%, hence, revenues for the investors who had invested heavily then are very low. Surprisingly, with the fall in price, the industry has experienced more interest from traders of the commodity than it had witnessed last year at any one point. This has been explained by the fact that as prices have been falling; the transaction costs of the commodity have proportionately been falling too. Many of those investing today are basing their decision on the future expected increases volume in trading expected at 31% increase. The number of new contracts being signed went up to 2.53 million contracts representing a rise of 20% when compared to the same period last year (Cui And Dicolo). Explanation/ Analysis Some investors are investing in the value and the trend in the industry. As the prices continue falling, it is expected that the demand of the natural gas will go up and since the market is far from saturation, the investors want to heavily invest at least in the short run as trading continues plummeting. On the other side, some traders expect that this is the lowest price that the commodity can be traded and that soon, in the long term, the prices will go up and they can in the long run continue trading at the normal or even at a higher price (Cui and Dicolo). Therefore, this is bullish and a bearish market with benefits for both investors. The supplier has flooded the market especially with the newfound shale gas discovery. Since the demand of the natural gas was static with new discovery, the supply outstripped this demand lowering the prices. At 2 dollar’s range, many of the i nvestors who are entering the market expect that with this rock-bottom state in the prices, they can continue trading at a loss or at least minimal returns on their investments because the prices will soon go up. However, analysts are warning that this may not be the rock bottom in essence. Last year, many investors speculated that then the prices were at their lowest only to be surprised that they dipped even lower this year. As Hyland explained, â€Å"just because the price of natural gas is trading at 2 dollars it should not automatically mean that they cannot go lower.† These words came true to one Mr. McLane the president of an asset management company who invested in the industry in the hope that the prices were at their lowest only for them to continue on a free-fall this year and he then had to close his position (Lowenstein 14). On the idea of trading on volatility, managers know that it may be profitable to ride in this wave of anxiety. More people are willing to in vest in this anxiety than those who are quitting the market. Hence, with various guarantees, some firms are lending out funds to those who are willing to risk in the hope that future prices will go up. To them, it is not about how the bet will go only that whichever way it goes, they will reap their capital and the interest rates that they are lending at. These are the benefits that the capital markets are making out of this volatility. Just like every other

Benefit Plan Assignment Example | Topics and Well Written Essays - 750 words

Benefit Plan - Assignment Example They should have completed 1000 hours of service with the company which usually occurs around one year after joining the company to be eligible for the benefits. The basic benefit plan of Blue Rose includes Retirement plans and Life Insurance plans. Senior engineers and the management staff get paid vacations and sick leave. All employees are entitled to get basic benefits like workers compensation and Federal Family and Medical Leave. FICA taxes will be deducted from every employee’s salary. The normal retirement age is 65. The benefit is determined based on the annual compensation package. Normal retirement rate benefit will be equivalent to 10% of the actual compensation earned by the employee annually. Pension benefits can be gained from the date of completing service. This is applicable to voluntary retirement, employment termination and quitting due to disability. The company requires every employee who had completed a year with them to contribute 10% of their salary towards life insurance. The company gives coverage up to 10 times the actual amount stored in the employee’s insurance account in cases of medical emergencies, death or disability. They employees who had completed 5 years of working in Blue Rose are eligible to take a loan on their insurance savings. Senior engineers and management staff who have completed 8 years in Blue Rose and are permanent employees of the company can get paid leave up to 15 days a year for vacation or medical emergencies. They are also entitled to get travel allowance for in-country vacations and free accommodation in company guest houses in certain locations. The benefits given by Blue Rose are quite lenient considering the size and profit of the company. But, certain basic additions like medical and dental coverage and paid sick leave for all employees are required. The junior employees will benefit a lot from such plans. 1. A basic