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Today's Featured Article The Cold Snap Lit a Fire Under Natural Gas—3 Trades to WatchWritten by Chris Markoch. First Published: 1/27/2026. 
Article Highlights - Natural gas stocks are gaining momentum as winter storms, data center demand, and tight U.S. supply push prices higher.
- UNG and BOIL offer tactical ways for traders to capitalize on short-term natural gas volatility during extreme weather.
- Generac provides indirect exposure to cold-weather demand as power outages increase interest in backup generation.
Late January brought snow, ice, and single-digit to sub-zero temperatures across much of the United States. In the lead-up to the cold, several energy stocks rallied sharply, particularly those tied to natural gas. The part of the story that may interest traders is this: U.S. natural gas output sits near decade lows while demand (even without the recent storms) continues to rise. The former CEO of Google calls it the most important thing to happen in 500, maybe 1,000 years of human society. A former U.S. Treasury Secretary says when your great-grandchildren write the history of this period, the political headlines will be the second or third story. The first story is something none of us have seen before. The dot-com collapse, global financial crisis, and COVID-19 pandemic don't compare to what's coming next. We may be entering a period of dramatic, almost unimaginable change. See the full warning and how to prepare now. One growing source of demand is data centers. While some see nuclear as a future solution, natural gas remains the immediate answer for reliable power. That has prompted aggressive traders to target two ETFs best used as tactical tools. Winter storms can also produce power outages, which increases interest in companies that sell backup power solutions—names that often stand out during hurricane season can perform during extreme winter weather as well. Each of the stocks and funds below may have further upside. Investors looking to trade this cold snap may want to consider these three options. UNG Offers Direct Exposure to Short-Term Natural Gas Moves The United States Natural Gas Fund (NYSEARCA: UNG) gives traders direct exposure to movements in the spot price of natural gas through near-dated futures contracts. With U.S. production near decade lows and demand rising from power generation and data centers, UNG is a way for nimble traders to express a short-term bullish view during extreme winter weather. The UNG ETF is up nearly 20% in 2026 as many investors bet on a worsening supply-demand imbalance. Cold weather can tighten supply further, supporting prices. However, the fund remains well below the all-time highs it reached in 2022–2023 after Russia invaded Ukraine. Following that spike, UNG dropped sharply and struggled for much of the next three years; it is down more than 61% over the last five years. BOIL Offers 2x Leveraged Exposure to Natural Gas Futures The ProShares Ultra Bloomberg Natural Gas ETF (NYSEARCA: BOIL) amplifies volatility by offering 2x leveraged exposure to daily natural gas futures returns. That leverage can make BOIL especially attractive during rapid price surges tied to cold weather, infrastructure constraints, or sudden demand spikes. For aggressive traders, BOIL can magnify gains when natural gas rallies over short periods. For example, the BOIL ETF is up nearly 38% year-to-date, roughly double UNG’s YTD gain. But the same leverage that boosts upside also magnifies losses. Over the last five years, BOIL is down about 99%, nearly double UNG's decline. That makes timing critical. BOIL is best suited for experienced traders who can actively manage positions and capitalize on short-lived momentum, rather than investors seeking a long-term natural gas exposure. Generac: A Power Outage Play That Isn’t Just for Hurricane Season Generac Holdings Inc. (NYSE: GNRC) isn’t a natural gas producer, but winter storms can make it a compelling cold-weather trade. Extreme weather raises the risk of power outages, boosting demand for backup generators from residential and commercial customers. Many of Generac’s generators run on natural gas, aligning the company with growing interest in gas-fired backup power as grid reliability comes into question. While Generac is often associated with hurricane season, severe winter storms can produce similar demand surges. If outages persist or grid stress increases, Generac could attract renewed investor attention. GNRC stock is up more than 22% in 2026. Yet it still trades about 16.7% below the consensus price target, and those targets have been rising. While Generac appears expensive at a trailing P/E near 31x, its forward P/E is closer to 20x—making forward multiples more digestible. Why These Trades Require Careful Timing What goes up can come down just as quickly. Both BOIL and UNG are tied directly to natural gas futures, one of the market’s most volatile commodities. Leverage, daily resets, and futures roll costs can quickly erode returns if prices move sideways or reverse. Weather-driven rallies can fade fast if forecasts change or supply rebounds. Generac faces different risks, including slowing demand if outages are limited or weather normalizes. Investors should treat these ideas as short-term, tactical opportunities—not long-term core holdings—and manage risk accordingly.
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