Lol you're right. For OP, I did a spread trade in intc and amd, long intc. I can see you getting crushed but that's where stop losses come in
Spread Trading
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Lol you're right. For OP, I did a spread trade in intc and amd, long intc. I can see you getting crushed but that's where stop losses come in
after re reading my post i realized you also pulled 1 line from it and twisted it. if you comprehend my example it was talking about getting legged in oil and not options so once again you were just playing around. i have a lot of good stuff i could add to this forum but if my first post is challenged this easily then i see nothing that elite about it. ill cut my loss here quickly. Noob try adding something positive to the post and start a journal if you want to express your successes
Congrats.
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https://oilprice.com/Energy/Energy-...ade-To-Take-Advantage-Of-Current-Turmoil.html
By Michael McDonald - Mar 10, 2016, 1:17 PM CST
One of the oldest statistical arbitrage techniques on Wall Street is the pairs trade. The concept behind the strategy is simple – find two stocks that have historically moved together and then when they diverge, take a long/short set of positions and wait for the correlations to reassert themselves.
While pairs trading is conceptually simple, it has a long history of being successfully used by Wall Street firms, hedge funds, and many other institutional investors. The only real barrier to entry on the strategy is being able to identify the relevant correlation in the first place.
Pairs trading is a simple and effective strategy, but it works better under some market conditions than others. The current environment of market volatility is exactly when pairs trading is ideal. Given the low barriers to entry around the strategy, it’s not surprising that pairs trading works best in times of market turmoil since microstructure differences are more likely to cause trading imbalances and distortions in these cases.
One good opportunity in the energy space right now is a long position in Frank’s International and a short position in W&T Offshore. W&T Offshore (WTI) is an oil and gas E&P firm with holdings primarily in the Gulf of Mexico and the Permian Basin. The firm is struggling mightily against a tide of negative economics that are hammering its business. WTI has dropped from around $17 a share in mid-2014 to less than $2 a share until last week. S&P cut the ratings on WTI and a number of other E&P firms to distressed levels last month, reflecting the tough environment that WTI faces. Related: Court Decision Threatens Midstream Sector
In contrast, Franks International, while suffering, is holding up relatively well. Frank’s provides tubular services for offshore firms and it is in a global duopoly with Weatherford in that market. Franks also has an onshore business, but that market is much more competitive. The offshore market has long been the bread and butter of Frank’s operations, but offshore drilling has been absolutely destroyed by the current downturn.
Nearly every OFS company out there is in big trouble and several firms have already declared bankruptcy. In contrast, Franks is a relatively stable player – it has no meaningful debt, limited competition in its core market, and a solid reputation in the industry. In better times, Franks is exactly the kind of firm that might be scooped up by a bigger player like Schlumberger or a private equity firm. Instead Franks has suffered like the rest of the industry. The firm has fallen from around $25 a share in mid-2014 to roughly $15 a share today – a steep drop, but a reasonable one given the distress in the offshore sector overall. Related: Oil Prices Up In Spite Of Crude Inventory Build
WTI is one of the most heavily shorted stocks in the market, and that short interest caused a squeeze recently as W&T Offshore rocketed higher. Franks also moved higher with both stocks benefiting from the recent upswing in oil prices, but WTI’s move was much more violent and likely driven by internal market mechanics rather than fundamental changes in valuation. This creates an opportunity for investors to capitalize on this mispricing and wait for fundamentals to reassert themselves. The chart below illustrates this, showing Franks in blue and W&T in purple.
(Click to enlarge)
Given the distress in the oil sector overall, some investors might wonder why one should bother with either a long position in Franks or W&T Offshore. The answer of course is that it’s impossible to say when oil will begin to recover, and ignoring the energy sector ignores a major value investing opportunity. By taking a long position in FI, and a short position in WTI, investors are poised to capitalize on a market mispricing driven by liquidity needs and short covering.
By Michael McDonald of Oilprice.com
not bad. but even if you find your golden ratio you are never fully hedged and the mkt changes daily and when you have outrights trending amd bringing in 23% and you stick to your tried and true methods and with dbl slippage dbl fees you will never beat the index. hence why hedge funds are having so much trouble lately. these are advanced strategies for computerized systems that are monitored by teams and reams of data. nothing in trading especially trading is ever as easy as it seems or everyone who bought a MA cross would be rich. no reason in these current conditions to start searching again. you dont even need 1 goodbtrade you just need to find 1 good move thats it. 1 good move and exploit that move until it stops working with gobs of volume. theen when you notice over time its not working you find 1 more good move and then you rinse and repeat. like a hidden predator you wait you wait you wait then you kill and you are done for the day. while waiting you can look for new moves or the same move in different markets. if you trade 5 mins a day thats enough to be rich very quickly if it works..1 good move. thats it.
While I am not familiar with the energy complex, in the agri-space, spreads are mainly fundamental but can also be sometimes technical. Technical in the sense of a short term shortage in the front months. Fundamental factors can be the time within crop cycle, inventory levels (commercial and exchange stocks), stocks/usage ratio, season of surplus or deficit for example. On technical factors you have little visibility unless you're a physical player in that market.
Would simply disagreeing without substantiating constitute challenging?
1- me like spreads.
2- me hear of thing called leaning on bids and offers to leg into spreads.
3- me like spreads.
4- me like oil spreads, me get to use word crack, word crack always make me laugh.
Slippage? Use limit orders.
Huge losses? Don't trade multi-lots and keep your margin requirements in check.
Spreads are filled on the exchange together so you are never legged into or out of a spread (unless you leg in yourself).
This has been a waste of time reading. In order to make myself feel better I found this book to help you with your spelling mistakes.
trustedsource is the latest account of this retard actualfuturestrader, REDP1800.
Apparently, you have to troll this forum with your retarded trash talking (under a new alias) every time you embarrass yourself. The guy doesn't know shit about spreads. He's just too dumb.
The entire concept of risk-adjusting exposures and relative value is beyond him. lol
This is Dunning-Kruger maxed out. It is no surprise at all that you failed as a spread trader. Just a complete idiot. He has to hide behind claims of success because he is a moron.
Here are a few of the gems from this retards post history. Later guys.
You've been outed before. Just give it up.
Apparently, you have to troll this forum with your retarded trash talking (under a new alias) every time you embarrass yourself. The guy doesn't know shit about spreads. He's just too dumb.
The entire concept of risk-adjusting exposures and relative value is beyond him. lol
This is Dunning-Kruger maxed out. It is no surprise at all that you failed as a spread trader. Just a complete idiot. He has to hide behind claims of success because he is a moron.
Here are a few of the gems from this retards post history. Later guys.
You've been outed before. Just give it up.
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First of all this one thread explains what this site is about and the stench of money kosers permeates every pixel no matter if its 8k or 4k. Gaussian its clear you have never heard the word synthetic except when it comes to your demo acct which is synthetic along with Real Money who is probably just like 90% of all the fake users here who are part of the masquerade just to keep ad revenues flowing. personally any entity that advertises on this site is someone you should steer clear of and this guy bone who charges 7k for a spread class.lmfao. it aint rocket science and thats a steep tuition price. believe what you want but 90% of the jamokes on this site are not even real people. Its admins with fake accounts to stir up controversy to get you to interact more on the site. Good luck. like i said. i cut losers trading and in real life faster than a fpga