A spread trading question...

A

andrasnm

A typical bullish spread the speculator would initiate by being long the nearest month and sell a further out month.
A typical bear market the speculator would initiate by being short the nearest and buy the more distant month.

Now I have an old book by Tom Kallard where he states that for gold the bull spread is selling the nearby and buying a further month. Is that a typo or gold is a special beast? Anyone care to comment.
 
Hi
Since nearby contracts generally gain on distant contracts in a bull market and lose in a bear market, a bull spread consist of being long the nearby contract and short the defferred contract;
a bear spread is long the far contract and short the near contract.
BUT...this terminology is not used in all markets.
There are some commodities where
-the reverse is true( Platinum, Gold, Silver, etc )
or
-where there is no relationship
What is called a bear spread in most commodities is a bull spread in these commodities.
Bull markets in the precious metals are (particularly) because of a change of the demand, not because of a tightness of supply. There are huges worldwide stocks of these metals.

Trading futures spreads is great, but only for well trained traders. It is not very simple and the loss can be huge for uninformed traders.
Need more info? Have a good trading.
 
Howard Abell has authored a book entitled "Spread Trading Low-Risk Strategies for Profiting from Market Relationships". I found the book well written, easy to read and easy to understand.

Good Luck
Louie
 
Tom Kallard

You are probably referring to

Fortune Building Commodity Spreads
by Thomas Kallard (Hardcover).

0930233476.01.TZZZZZZZ.jpg
That is one of the books on my Amazon Listmania list!

“ Seasonal Spread Traders Library,”

By GoldTrader_, Seasonal Spread Trader

How did you like it? Did it give you insight to any successful trades? How do you rate it?

How about a book report?

Do you want to sell it?
 
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