/NG-/HH spread trading
- Thread starter heispark
- Start date
I find it interesting when someone has underestimated that they are talking with a guy who fills the wings! LAYMANS TERM..EXCHANGE SUPPORTED SPREAD .Actual term is an implied spread with an implied book genius where its still fifo priority except in the bonds where you will get jumped trying to fill by bonafide market makers which is known as pro rata! Do i know about implied spreads...yeah. I like how this loose term spreader..is like the hipster thing to say. yeah i know em
lol. omg. abbot n costello!!
that
thats a spread reference by the way.
Naturally!
CannonTrading_Ilan
Sponsor
Asked my colleague, Mark O'Brien, who focuses on spreads for some feedback, hope this helps!
The NYMEX / Henry Hub Natural Gas spread (using the January contracts in this example) is primarily used as a hedge against price disparities between the two contracts, rather than a directional play, so it’s not prominently traded among speculative traders who typically employ spreads to take a directional approach in a given market or sector. Even inter-market spreads, i.e. ↑RBOB / ↓USLD, or ↑RBOB / ↓ Crude Oil benefit or lose based on both contracts’ similar movement up or down, just as a typical calendar spread would, i.e. ↑ Jan. NG / ↓ April NG.
Good general article by Mark at:
https://www.cannontrading.com/tools/the-seasons-of-the-futures-market
The NYMEX / Henry Hub Natural Gas spread (using the January contracts in this example) is primarily used as a hedge against price disparities between the two contracts, rather than a directional play, so it’s not prominently traded among speculative traders who typically employ spreads to take a directional approach in a given market or sector. Even inter-market spreads, i.e. ↑RBOB / ↓USLD, or ↑RBOB / ↓ Crude Oil benefit or lose based on both contracts’ similar movement up or down, just as a typical calendar spread would, i.e. ↑ Jan. NG / ↓ April NG.
Good general article by Mark at:
https://www.cannontrading.com/tools/the-seasons-of-the-futures-market
I do not trade spreads because it is double slippage and double the fees and a limit order does not guarantee no slippage becuse if end up not getting filled and miss the trade then i would consider that massive slippage and you might even lose of only one side is executed and you end up with an OUTRIGHT full on risk position so for me with retail fees and retail colocation at TT and cqg and sierra and rithmic etc. they are all co located for retail. so my point is that the risk in too great when i can make just as much if not more in the outright mkt
many people dont really undertand the true risk in spreads and most enormous blow outs are in bad spreads because it is difficult to exit and enter quickly when there is a liquidity event.
many people dont really undertand the true risk in spreads and most enormous blow outs are in bad spreads because it is difficult to exit and enter quickly when there is a liquidity event.