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