Commodity futures is not my specialty but I looked into the lagging quotes from leveraged natural gas ETFs and from natural gas producers. It's well known that

Commodity futures is not my specialty but I looked into the lagging quotes from leveraged natural gas ETFs and from natural gas producers. It's well known that tracking index for gold (GLD) correlates to the tracking index of gold producers (GDX) and they diverge and converge. People would do pair-trading on GLD-GDX pairs to bet on convergence. Given that there's a binary catalyst event for natural gas, I wonder if there's a viable strategy to identify the thinly traded natural gas producers and exploit the stale quotes by market-makers (if the laggards are not responding as actively as the more liquid traded natural gas companies like CHK). On the other side, I wonder if in a highly volatile event where a lot of punters would bid up leveraged natural gas ETF (GASL) above its intrinsic value, and you can take the other side of that trade and hedge with more liquidly traded UNG or FCX options or futures market. Just food for thought. EDIT: Also I wonder if there's a spread between IV in UNG options and in the futures market to do a calendar or ratio spread.