Brent/WTI Spread

rosy2 · Dec 9, 2011

Quote from bone:

Spreads will rock your world. Then you will get really pissed off that you didn't go down this road a long time ago. Fight through the regrets and make the best of the future.

.

agreed. most people start trading thinking they are a market wizard picking direction when in reality 99.999999% of people who make a living doing this are spreaders of one kind or another

amsterdam · Dec 20, 2011

a little off topic, but does anyone know how i can make a spread chart on Bloomberg....say a xlf/spy spread chart?

FrankSlaughtery · Dec 21, 2011

Quote from amsterdam:

a little off topic, but does anyone know how i can make a spread chart on Bloomberg....say a xlf/spy spread chart?

try this...

XLF<EQUITY>SPY<EQUITY><GO>

FrankSlaughtery · Dec 21, 2011

Quote from FrankSlaughtery:

try this...

XLF<EQUITY>SPY<EQUITY><GO>

so ET doesn't allow certain keys i guess so here's the format you need to compare two symbols

ticker 1 equity ticker 2 equity go

amsterdam · Dec 21, 2011

thank you

amsterdam · Dec 21, 2011

so i'm a real noob at bloomberg and i'd like to do some spread charts

I typed xlfspy but terminal gives me nada...anyone have a clue where i need to go in order to get these charts plotted.

Rodney King · Dec 21, 2011

Simplest is, XLF equity SPY equity GR go, then click tabs 51, 52, 53 at bottom left as desired.

Marsupilami · Dec 27, 2011

Quote from rosy2:

agreed. most people start trading thinking they are a market wizard picking direction when in reality 99.999999% of people who make a living doing this are spreaders of one kind or another

Well, what else is a WTI-Brent spread trader doing other than picking a direction before he enters a trade ?

The spread can go up or down, just like the WTI/USD ("outright") trade.

So what's the benefit ? Does the spread trend more smoothly ?

Is there less chopp ? Or are you better protected against sudden, unexpected market movements ?

I can see how one would enter a spread trade for seasonal or fundamental reasons ( brent becoming more expensive than WTI because of fundamental reason x) but to a technical trader, price action is price action, no matter whether you are trading the Google/Corn spread or the ES outright.

Would love to hear your reasons for spread trading.

Maverick74 · Dec 27, 2011

Quote from Marsupilami:

Well, what else is a WTI-Brent spread trader doing other than picking a direction before he enters a trade ?

The spread can go up or down, just like the WTI/USD ("outright") trade.

So what's the benefit ? Does the spread trend more smoothly ?

Is there less chopp ? Or are you better protected against sudden, unexpected market movements ?

I can see how one would enter a spread trade for seasonal or fundamental reasons ( brent becoming more expensive than WTI because of fundamental reason x) but to a technical trader, price action is price action, no matter whether you are trading the Google/Corn spread or the ES outright.

Would love to hear your reasons for spread trading.

There real fundamental drivers driving the WTI/Brent spread. There is a lot of noise in outright crude trading. The fundamental drivers create much smoother trends and the spread market is 10 times more liquid then the outrights. Most people that buy or sell Crude are really just making another bet on the S&P vs the WTI/Brent spread.

dptrading · Feb 13, 2012

With the brent/crude spread sitting around $18.50 again, I'm short it, looking for $10 tops.

A great fundamental overview of why the spread has occured is here: http://ourfiniteworld.com/2011/02/19/why-are-wti-and-brent-prices-so-different/