Your desire to be long oil is reflected in the contango.
May '20 crude futures = $20, June '20 crude futures = $28
- Thread starter SteveM
- Start date
Your desire to be long oil is reflected in the contango.
I never really trade oil. So Contango means everyone knows demand collapse is short term thus the further out months are 30% more. That means if you buy further months out contracts your probably not going to make much money unless spot oil sky's. Its like buying a 13 vix 5 months out. Everyone knows at some pt the vix will sky so they keep the far out calls super expensive . Just like when the vix was 84. Everyone knew its impossible for the ix to stay at 84 so the 50 vix puts are crazy expensive . As far as i can tell the only way to play oil is get lucky with the cl close in month or buy oil stocks which are already 50% off their lows in 3 weeks.
Energy in particular is a Spread Traders wet dream. Tons of opportunities - thousands of Inter and Intra product spread combinations.
really ? can you give me a "wet dream"-like example of crude oil spread trading opportunity right now ?
is it ? it's about 6.30 now, high was a bit above 7 yesterday and below 6 the day before. Looks pretty stable to me.
FYI: That spread went the opposite way from the rest of the series during the drop today. It would have been very frustrating.
Front Month is crazy. You are probably competing with guys who have real-time pricing for storage across the nation and wherewithal to take delivery (just to burn your arse).
Front Month is crazy. You are probably competing with guys who have real-time pricing for storage across the nation and wherewithal to take delivery (just to burn your arse).