I have been looking at UNG stock as a possible speculative play and was under the impression that UNG basically just uses money to buy and hold massive stocks of NG and thus they were very well capitalized and collateralized but I have this creeping suspicion it might be something a wee bit closer to a ponzi scheme than I first imagined, or not imagined.

So is it safe to invest in ung stock or can the stock just go poof! at any time? I know NG prices are pretty low right now but how much lower can they go and exactly how much can one lose with UNG stock worse case scenario?

Also are there any other decent instruments that can be used to speculate on NG prices either with UNG stock or any other related stock such as GAZ. Are UNG and GAZ options generally safer than pure stock? How about SSFs?

Or should I open a forex account and trade NG like a commodity?

Answer
It trades in financial derivatives: futures contracts on natural gas.

It does not physically hold or store the commodity.

As such it is highly speculative and subject to potentially enormous variability.

It can go poof at any time, in other words. Although it is professionally managed by experts and insured, so it isn't going to go poof do to hanky-panky...just the price of gas crashing to the ground.

What are some of the riskiest investments that you can invest in? What gets the most on returns and the least?

Answer
I have to agree with the 1st responder. Commodities are extremely risky. The reason they are is because they are purchased as futures on very low margin requirements--10%. And such events as a droubt or a freeze in Florida or Russia buying up the entire soy bean crop can cause prices to advance dramatically. Or in the recent case of oil and natural gas, prices can fall dramatically. In either case if one is caught on the wrong side of a position, the results can be catistropic, as a hedge fund recently discovered with their natural gas positions. Currency trading on the Forex falls also into that category as margin requirements are similar.

Similarly commodities and currencies and also yield the highest returns. Anyone who shorted oil back in June made a ton of money. In fact could have easily become a millionaire overnight. Similarly anyone who had shorted the dollar 3 years ago would also have done very well or bought gold contracts.

Someone mentioned selling naked calls as being very risky. That is a common belief but is not supported by the facts. There are instances, very few instances, where that strategy does yield large losses but in general it is a very rewarding strategy, yielding good returns about 85% of the time.

T-bills yield about the least returns of the sophisticated investments. Savings accounts by far yield the least returns of the un-sophisticated investments. And perhaps whole life policies. And social security contributions. ROI on social security contributions is about a negative 5 to 25%.