Pair trading futures

You need to model these spreads and try to quantify this "drift" you speak of. I still dont know exactly what you are referring to as drift, could mean lots of things.
 
Quote from spd:

You need to model these spreads and try to quantify this "drift" you speak of. I still dont know exactly what you are referring to as drift, could mean lots of things.
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What I mean is when two futures do not converge. This happens allot with index futures.

What are ways to measure this before it happens?

My bad for stupid questions.....
 
Quote from vincentvega:

You really can't figure this out, can you?

One ES tick is $12.50/0.25. One dow tick is $5/1. These numbers don't change regardless of what price the ES or YM are at. I'll let you figure the rest out and come back when you have it. Just private message it to me so I can keep this thread open to real pair traders. :) cheers
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bump Have you finally figured out that ES vs YM at 1:1 is not neutral? Or as you call it "perfect" ?

otherwise, Is the Dow still drifting?
 
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