Questions Regarding QM & CL

P

PFWinkler

Hi Everyone,

I have successfully traded equity options (intraday) for a few years now (broker is IB). I am looking to dabble into the oil market in a few weeks or so, and any advice is needed.
Questions 1) How much is 1 contract of QM, and what are the ticks worth?---How does a $1 move in crude affect the price of QM. 2) What are margin levels—What is the minimum amount of capital I can start trading with?

Generally speaking, what do you normally set your stops @ (ie, how many pennies until you get stopped out)

Thank you

PFWIII
 
QM is worth $500 per point, CL $1000 per point. Tick size on QM is .025 and it's worth $12.50. I'm not 100% sure on this but I think tick size on CL is .01 and it's worth $10. Never traded the CL. I prefer the QM because leverage is lower. Margin levels vary by broker but I think Global's are in the area of $1200 per contract.

The Oil contracts are VERY noisy. The noise has quietened down a lot since the price has come down but it's still very noisy. For that reason I never use a hard stop on Oil. I only trade it with mental stops and I don't ever take a full position with 1 trigger. You have to be well capitalized to trade this contract and you need to trade it very small, relative to your account size. There are definitely easier contracts to trade.

An observation......the QM/CL tends to move in waves of 4 on the 5-min chart. If you find a 4th wave has completed there is a high probability it will reverse. If you see a 5th wave the probability is even higher. If you like to let trades run this is a terrific contract because when you catch a move you can make BANK! Not for the faint of heart though. I'd strongly recommend you trade it on a simulator to get a feel for how it moves. Lots and lots of whip!

Quote from PFWinkler:

Hi Everyone,

I have successfully traded equity options (intraday) for a few years now (broker is IB). I am looking to dabble into the oil market in a few weeks or so, and any advice is needed.
Questions 1) How much is 1 contract of QM, and what are the ticks worth?---How does a $1 move in crude affect the price of QM. 2) What are margin levels—What is the minimum amount of capital I can start trading with?

Generally speaking, what do you normally set your stops @ (ie, how many pennies until you get stopped out)

Thank you

PFWIII
More...
 
Do a search for "QM vs CL on this site. This referenced thread explained the difference in deatil between the 2 mentioned above.

good luck
 
Agreed. I'd definitely not recommend having a dabble in oil. If you're successfully trading options, then you're clearly not stupid, but just be careful mate!
 
I traded these two contracts back when it ran from 70 to 120, then stopped. Too wild. I preferred trading CL over QM. The tick size bugged me, and watching CL while trading QM was frustrating. Especially when you would get stopped out on QM in a level CL didn't hit. It didn't happen very often, but enough to make me stay away from QM. I would switch between contracts for one week CL and then QM etc. My CL trades outperformed my QM trades. During this period you could get away with .20 stops and market orders with minimal slippagge on CL, with .075 to .125 on QM. This was short term trading, if your time frame is longer then QM should be fine. Even though it's back at the same levels I was trading, it's much more volatile now.
 
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