I'm researching the new NG contracts traded on Globex. Information on the
NYMEX website describes the two contracts:
Two financially-settled natural gas (HH & HP) contracts
are available for trading on the CME Globex® system. The HH
contract settles on the same date as the physically-delivered NG
contract and HP is a penultimate contract. Both contracts are
listed for 72
months.
- HP: Trading terminates at the close of business four business days prior
to the first calendar day of the delivery month.
- HH: Trading terminates at the close of business three business days
prior to the first calendar day of the delivery month.
I don't understand why there are two contracts which settle a day a part
nor do I understand which will have the greatest liquidity. "Penultimate" is
defined on M-W as "next to the last". I'd like to understand what I'm trading
and I'm confused. Can anyone here help?
Earl