CL spreads

RedSun said:
One secret of the spread trading is the financial/physical convergence. Since the CL inventory is at close to historical record, there is no shortage of crude. When the front contract expires, financial contract and the physical crude oil converge. Then you have the front to 2nd contract roll. So near expiration, the front spread somehow disappears. This happened at least the two previous two months. This is going to happen again and again.

In another word, the $0.76 premium of Jun over July should drop or disappear. In general, it is a profitable trading opportunity to short this spread. You can do it again and again, with wider spread ($0.90 etc...).

There is some risk, but small....
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Everything you said there is completely false. That is just not how the market works. And the excess storage is not why the spread is there. There are serious supply constraints that dictate the basis. Having oil in storage is not going to help you if you can't move it.
 
That is fine bud. You the smart genius. Make your own $$ :D:D I take $ from someone's pocket. Being a sharp genius here does not make me rich.
 
RedSun said:
That is fine bud. You the smart genius. Make your own $$ :D:D I take $ from someone's pocket. Being a sharp genius here does not make me rich.
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A few weeks ago you didn't even know there was an ICE financial contract. Yeah you're welcome for that. Now you've got it all figured out. Just please don't start a thread on here asking why the CME/ICE spread blew out $3 in your face at expiration because most of us here are probably not going to want to go through the explanation for ya.
 
Haha, why do you get so emotional? You losing $$ now? :D:D

I asked because I was just curious and I do not trade ICE...

If you want to prove you are a genius, just not here. You do not make $ by bashing other people :eek:
 
Talk is cheap. Show me the $$?

5-8-20142-19-17PM_zpsd5f573a7.jpg
 
Hi,

here is my list of spread positions in energies:

Buy CL V/Q at -2
Buy RB M-N at 0.019
Buy HO X-U at -0.013 (I'm ready to exit once market don't break resistance at 0)

Seasonal windows ends in late May for all these spreads.

SeasonAlgo-CLV14-CLQ14_builder_zpsc642c848.png
SeasonAlgo-HOX14-HOU14_builder_zpsfa4e833f.png
SeasonAlgo-RBM14-RBN14_builder_zps6db9703f.png
 
If you have access to a Bloomberg Professional terminal, the "Crude Netbacks" page is very good for the seasonal refining run switches.
 
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