I like this trade a lot.
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Nat Spreads
- Thread starter PAPA ROACH
- Start date
I like this trade a lot.
Quote from Rtrader2525:
He isn't out $6250 a spread though, that is just the difference.
"out of pocket" was an unfortunate choice of phrases. That's the cost of the spread. Given the availability of margin he'd be literally "out of pocket" only a precentage of that.
I guess if you do it with a swap (not futures) you can avoid the up front margin. I didn't know swaps were available to the retail investor.
MArgin on a natty spread is around 1000 bucks. That is the beauty of spreads man, extremely low margin versus outrights. RBOB spreads vcost me 250 to put on which is humorous considering corn spreads cost the same thing.
Roach is that you offering 120 lots on v/x all day?
Quote from texrex2002:
Just to be sure I know what you're talking about: -v/+x means you're selling October (4.629) and buying November (5.254)? You're .625/MMBTu (or $6250) out of pocket for every pair of contracts you have on.
So you're anticipating that the v/x spread will widen as we get closer??? Otherwise it's a loser...
I'm just using the prices from the Nymex page.
So it looks like the spread widened half a penny from what I wrote up, but narrowed half a penny relative to when Papa Roach put his position on.
(not pointing at anyoneâs MtM here, just typing it out because I want to understand)
Layered in to my first of 3 possible tranches of N/Q. +N/-Q at .145 today, hoping it moves out further. Will add more at .155 and .165 if given the chance. I think this spread will be similiar to last month and move in to -.09ish, which is my initial target.
Quote from texrex2002:
So it looks like the spread widened half a penny from what I wrote up, but narrowed half a penny relative to when Papa Roach put his position on.
(not pointing at anyoneâs MtM here, just typing it out because I want to understand)
I put that spread on at .635, at .66 I have a .025 profit, at .60 i am at a .035 loss.
I am targeting .735 for now, a dime target.
Bill Perkins was just on Fast Money ( I don't usually watch, but lucked out). Isn't he a trader under John Arnold? He said NG has a long way down to go.
^ yes, he is. Someone edited Wikipedia for him:
When Enron collapsed in 2002, he [John Arnold] founded Centaurus with his previous year's bonus. His company now has as much as $3 billion in assets under management.[2] His employees include several big name energy traders including ex-Enron CEO Greg Whalley,[1] as well as Bill Perkins (although overrated), Jeffrey Welch and Conrad Goerl, previously of MotherRock
the "(although overrated)" is not my spurious addition. lol
When Enron collapsed in 2002, he [John Arnold] founded Centaurus with his previous year's bonus. His company now has as much as $3 billion in assets under management.[2] His employees include several big name energy traders including ex-Enron CEO Greg Whalley,[1] as well as Bill Perkins (although overrated), Jeffrey Welch and Conrad Goerl, previously of MotherRock
the "(although overrated)" is not my spurious addition. lol