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I haven't posted number line confirmations in a while: we currently have confirms in ES, CL and GC and we recently re-set in Bonds and Natty.

Akin goes over this in detail on his Stirs book but the goal with "implieds", and the implied spread is the replication vs the quoted exchange traded spread, is to capture the tick ahead of the exchange traded market. Most guys doing that simply want to earn that tick or in most cases, half a...

Oh, you meant in the book. I thought you referring maybe to this thread. Yeah that is something different then that what I was referring to. He was saying something about looking at the score 30 days before as an indication of what might happen today. Honestly I have never used that before...

I'm not sure what you mean by minus page 49 and 50. I use to run 5 day look forwards on the 30 days and found them to be moderately effective. It gave you the chance to sort of "front run" confirmations. But I found that often times price stopped there and reversed. But the 5 day forward...

I don't track RIG. Sorry about that.

Good article. It had a few holes in it. But he brought up some good data to look at it and put things in perspective.

Well, we do have 1400 pages of content here and growing. I guess you can blame Baron in part for this problem right. Books were how ideas were shared before we had blogs, message boards, twitter, facebook and all other interactive media. It's hard for a book to compete with that today. I...

You can read more about them here: http://en.wikipedia.org/wiki/Real_options_valuation http://www.investopedia.com/terms/r/realoption.asp

He said he was bidding and as long as at least 1000 contracts traded, he would be filled implying that was the size of his position. I think he had a much smaller position initially and when he went back in, he pushed all his chips to the middle of the table.

Wait a minute. Am I doing the math right. He is short 1000 cars? At $400 a cent and it's limit up at 3 cents higher. He dropped 1.2 million on the open?

These things can go limit for days. There is no out unless you want to pay up for the synthetic which I'm sure is much higher now. These types of trades can literally relieve both a trader and his clearing firm of their assets.

\ Yes that was for equities, not for gas. For gas the optionality is priced into the actual spreads. I'm not even referring to nat gas options but you can trade options on the actual spreads themselves. In this case with gas we are not even dealing with soft or hard deltas, we are dealing...

Well, ideally you don't want to be short a peak month unless prices are favorable to do so. The example I gave was for simplicity purposes. Contangos are hard to sustain in gas because you give the incentive for a physical player to just come in and buy Jan, store the gas and sell it in Feb...

Convexity refers to any non linear movement along a price curve in this example. This means there is a second derivative driving price, not first. For example y=x^2 is the 2nd derivative to y=2x. Plug in values for x and graph it. y=2x -------- x=1 y=2 x=2 y=4 x=3 y=6 You get a straight...

Going down? Shiiiiiiiiiiiit dawg. That ain't gonna happen. :) The issue is not whether price is or can go down, it's the fact that all the "convexity" is on one side of the bet. That's point one. Point two, based on what I said earlier about the forward curve, let's say dec 2016 gas...

Dude, you've been saying this for the last 400 handles. How priceless is that. Go back and read the timestamps of the first post you tried to peg a top on me with. It was about 400 handles lower. You should have taken the long kid. You could have quit your Jimmy Johns job if you had. :)

Ivan come on man. Just stop already. This was cute 3 years ago or 4 years ago whenever this started. But this charade is actually hurting the integrity of the board as the moderators for some reason choose not to move it to chit chat. Not that ET is the bastion of integrity. But even...

It's a little more complicated then that. Think about it this way. The forward curve has a propensity to trade at a discount because there is a steep economic cost for the producer to store gas. The cost is implicit, not explicit. Meaning it's not an actual dollar figure per day that is...

A competent option trader should be able to calculate his deltas in his head. While we had slabs on the floor to use, they were of no use in fast markets when your trades weren't even entered in yet. Traders today are really handicapped by the fact they rely so much on software to do things...

It's the optionality embedded in the spreads. The way to understand this better is to pretend you are a producer that has gas in underground storage which itself is a synthetic option. The producer via the forward curve can optimize his storage levels in the future based on his cost to store...