Lumber futures: backwardation exceeds late penalties on physical delivery?

[ScroogeMcDuck]

$200/day * 22 business days/month / 110mbf = $40/mbf/month
But may is $120 cheaper than march
so you buy the may futures, short the march futures, pay 2 months of penalties and dropship it for a profit of $40/mbf lol.
I don't see any clause that voids the transaction after you stall for that long.

I went ahead and shorted a few contracts of march lumber and I'm hoping this gets arbed away before I cover.

 

[maxinger]

oh no. not such illiquid futures.

you might end up being a sole trader.

 

[caroy]

oh no. not such illiquid futures.

you might end up being a sole trader.

Happy to make a market on over the counter lumber options? My markets might be a little wide.

 

[bone]

Good luck.

$200/day * 22 business days/month / 110mbf = $40/mbf/month
But may is $120 cheaper than march
so you buy the may futures, short the march futures, pay 2 months of penalties and dropship it for a profit of $40/mbf lol.
I don't see any clause that voids the transaction after you stall for that long.

I went ahead and shorted a few contracts of march lumber and I'm hoping this gets arbed away before I cover.