There is a lot of stuff in the archives on options. I use options a lot (both hard and soft deltas). I use hard deltas for equity stuff and soft deltas for future stuff.
The ACD Method
- Thread starter sbrowne126
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There is a lot of stuff in the archives on options. I use options a lot (both hard and soft deltas). I use hard deltas for equity stuff and soft deltas for future stuff.
Crude oil failing at the monthly and quarterly A up. WTI/Brent spread getting awfully close to parity again.
I'm going to post a quiz question and I'll provide the answer after the market close. In the above sentence I provided some useful info. Based on your knowledge and the info I posted above, give me what you think is an optimal trade setup and why? No googling for the answer. Use only your notes from the previous 1400 pages of this thread. The answer is in there.
Just wanted to follow up on this quiz. From April 11th we saw that had you shorted CL outright you possibly could have been stopped out on the trade as we were toying with a confirmation. The spread on the other hand offered no such heat and came in nicely from the $3 level to around $9 now (we rolled to new contracts since the post so I'm using current month contracts). Just wanted to demonstrate the process of "optimizing" a trade.
Mav, you track ACD for BZ or just watch the spread and CL?
Follow up question, the spreads you showed, would you be trading native exchange quoted spreads or implied spreads based on pricing of individual legs?
Mav, an interesting timeline;
11th April - You posted quiz question, ie trade opportunity identified.
13th April - You posted answer = ET followers of this thread knew of the trade.
23rd April - This was mailed out mentioning the STRONG WIDENING of the Brent/WTI spread in the last 24 hours, = as of 22nd April.
http://www.futuresmag.com/2014/04/2...a108000133&ref=hp&utm_source=DailyMarketFocus
Damn, they took a long time to get on the bandwagon.
Great job man, more than just the technicalities but the decision process in spotting the trade.
11th April - You posted quiz question, ie trade opportunity identified.
13th April - You posted answer = ET followers of this thread knew of the trade.
23rd April - This was mailed out mentioning the STRONG WIDENING of the Brent/WTI spread in the last 24 hours, = as of 22nd April.
http://www.futuresmag.com/2014/04/2...a108000133&ref=hp&utm_source=DailyMarketFocus
Damn, they took a long time to get on the bandwagon.
Great job man, more than just the technicalities but the decision process in spotting the trade.
I track the spread.
I try to always trade exchange quoted spreads because you usually get lower margin. I'm not really worried about missing prices on an implied spread though since I'm not daytrading these.
Mav, an interesting timeline;
11th April - You posted quiz question, ie trade opportunity identified.
13th April - You posted answer = ET followers of this thread knew of the trade.
23rd April - This was mailed out mentioning the STRONG WIDENING of the Brent/WTI spread in the last 24 hours, = as of 22nd April.
http://www.futuresmag.com/2014/04/2...a108000133&ref=hp&utm_source=DailyMarketFocus
Damn, they took a long time to get on the bandwagon.
Great job man, more than just the technicalities but the decision process in spotting the trade.
Thanks. I'm really trying to put a focus more on the process rather then the "trade calling". Everyone on ET "calls out" trades it seems and I find little value in that. The value is in the process. One needs to know "why" they are making the trade. And "why" the trade is working or "why" it's not working. Too many people on ET get caught up in the simple binary result without ever understanding the process that generated that binary result.
âAny fool can know. The point is to understand.â
â Albert Einstein