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Natural Gas Industry
The United States natural gas market has increase in production and experience substantial financial growth in the market. While natural gas has been successful at the retail level growth in the futures and options has been an effective way to deal with volatility in the market. In early years, natural gas didn't compete in the financial market as it is doing now. Conversion of the industry has introduced financial instruments derived from natural gas.
Natural gas is a universal product that is recognized no matter the location of the market. This description justifies why natural gas is sold as a commodity. Many changes in price occur in the natural gas market. The increase in the usage of natural gas has created its attractiveness as a consistently traded commodity.
There are large amounts of natural gas reserves available in the United States to meet the demand. Other benefits of natural gas are that it burns clean, and it is considered a safe fuel as far as environmental risks are associated. Besides the physical benefits of natural gas, there are a few other factors that have affected the growth of natural gas. For example, the Clean Air Act created an opportunity for increased use of nature gas because of the acid rain reduction. By using natural gas, acid rain is reduced when compared to high-sulfur fuels. The high demand for electricity is another factor that has boosted the significance of natural gas.
Hedging Natural Gas
Financial instruments are derived for natural gas such as future contract and options. The instruments are traded on the stock exchanges. Natural gas is bought and sold in two different markets. The markets include the spot market and future market. The spot market is the going price for natural gas at the exact moment. The spot price ultimately depends on the market condition at a particular time of the

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