We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What are the Best Tips for Natural Gas Investing?

By Patrick Lynch
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Natural gas investing is becoming a popular method of earning a second income. Tips when investing include considering Exchange Traded Funds (ETFs) because this involves buying shares in several different companies at once. Purchasing blue chip stock, another alternative, is expensive but shareholders usually earn a quarterly bonus in the form of a dividend. The volatile commodities market can also be explored without having to own shares; Contracts For Difference (CFDs) and spread betting are available for this purpose. These forms of investing are not legal everywhere; the U.S. and some other countries outlaw such practices.

There are a myriad of ways to engage in natural gas investing. In order to reduce the risk, invest in ETFs. Many ETFs have several gas stocks built into the price so a trader’s investment is not dependent on just one or two stocks. Spreading the risk means that even if one or two stocks fail, the others should remain in reasonable shape, thus protecting the investment.

Natural gas investing does not have to involve ownership of shares. CFDs, for example, enable traders to invest in natural gas without actually purchasing the stock of any company. A CFD involves a trader agreeing to invest in a market against a brokerage company. Both parties agree to settle the difference between the trader’s opening and closing position.

The process of leveraging on CFDs can seriously increase the profits made from natural gas investing. This essentially allows a trader to control up to 100 times his or her investment. This can lead to spectacular gains but traders should be aware that massive losses are also possible.

Leveraging also makes it possible to invest in blue chip companies that would normally be beyond the average trader’s budget. The definition of a blue chip company is one listed in the world’s major stock markets such as the U.S Dow Jones or the United Kingdom’s FTSE 100. These large companies generally pay shareholders a quarterly dividend, although those who invest through CFDs or any other non-ownership method are ineligible for such a payment.

Commodities such as natural gas are notorious for being volatile. This means investors have to be careful when choosing a company in which to invest. Small companies are more affordable but are far more likely to go bankrupt due to the unpredictable nature of the market.

Another method of natural gas investing involves spread betting. The broker takes the role of bookmaker by setting a price for the trader to buy or sell. A stock may be worth 100 points, for example, with the broker setting the spread at 95-105.

If the trader believes natural gas stock will rise in value, he or she will purchase the stock at 105 points a share and hope it rises. Likewise, traders who think the stock is due to fall can buy at 95 points and expect a decrease. Spread betting and CFDs are illegal in certain countries such as the U.S.; ensure this form of investing is permissible in your jurisdiction before attempting it.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.