It's traded out to a 1.50 to 1.75. I would say at these prices the expected spike would be .50 to .75 at an extreme. Don't look at it like a trading range. The spread is an option with slow decay. It's value will eventually trade to the marginal cost of storage in march which will be roughly -.03 to -.05.
The ACD Method
- Thread starter sbrowne126
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It's traded out to a 1.50 to 1.75. I would say at these prices the expected spike would be .50 to .75 at an extreme. Don't look at it like a trading range. The spread is an option with slow decay. It's value will eventually trade to the marginal cost of storage in march which will be roughly -.03 to -.05.
Hi Mav,
Sounds really interesting and would be great to see a post on it. You seem to have a talent in dumbing serious subjects down so that they can be understood.
Thanks.
Sounds really interesting and would be great to see a post on it. You seem to have a talent in dumbing serious subjects down so that they can be understood.
Thanks.
Sorry guys...the convexity commentary will have to wait for next weekend. I'm knee deep in re-building some models for the coming week. Thanks i960 for posting the above chart.
Look forward to it Mav. Thank you
Kyle Bass will be interviewed on Power Lunch today on CNBC. Just a heads up...
WTI front spread trading at -.24! That is nuts. Nice squeeze going into delivery.
Mark Fisher will be on power lunch tomorrow on CNBC. I'm bid for size that he will be bullish on oil. I don't think he has ever been bearish. LOL.