Do 2 Futs ES contracts for subsequent months go in same direction ?

traderwald · Nov 10, 2020

Hi guys,

Do 2 Futs ES contracts for subsequent months go in same direction ? Example ES for Dec and March - do they go in same direction and ? And have a constant price gap between them ?

Thank you

Overnight · Nov 10, 2020

traderwald said:
Hi guys,

Do 2 Futs ES contracts for subsequent months go in same direction ? Example ES for Dec and March - do they go in same direction...

Yes.

... And have a constant price gap between them ?

Not exactly such, because the forward month will have much less volume. So your forward price quote will show as the last price, but since the last price print the bid/ask could be many points above or below the last. You'll just have to pull up some charts to compare.

I know what you are thinking.

Don't get cocky with the idea of spreading the two, or trying to arb it.

TimMykes · Nov 11, 2020

If you're really fast and patient, you might make a 1/4 once a month

Millionaire · Nov 11, 2020

You can sell the expensive one and buy the cheaper one.
This will make you guaranteed profits as the price eventually gets closer together

TimMykes · Nov 11, 2020

Millionaire said:
You can sell the expensive one and buy the cheaper one.
This will make you guaranteed profits as the price eventually gets closer together

do it all the time
its one of my trade secrets

traider · Nov 12, 2020

dont encourage more competition into the highly profitable world of spread trading. Please keep this to yourselves

Amatrue · Nov 12, 2020

Millionaire said:
You can sell the expensive one and buy the cheaper one.
This will make you guaranteed profits as the price eventually gets closer together

TimMykes said:
do it all the time
its one of my trade secrets

traider said:
dont encourage more competition into the highly profitable world of spread trading. Please keep this to yourselves

traderjo · Nov 13, 2020

Millionaire said:
You can sell the expensive one and buy the cheaper one.
This will make you guaranteed profits as the price eventually gets closer together

Lets get some clarity are you talking about A) trading the spread with it's own book or B) legging in?
With B)At retail level? as a exchange traded spread you are always at the back of the Q! and never get filled on spread spikes..

Jamesstefines · Nov 19, 2020

Looks like the forward month will have comparatively less volume so you can try to look at some charts and compare them as per your understanding.

shriekpurser · Nov 23, 2020

You might want to act quickly on this if you wish to keep making money.