Why Futures Oil Calendars showing as negative.

[ShadowHunter]

On IB.

CL Dec 21 47.81 (last price)
CL Dec 22 46.36 (last price)

CL Dec 21 - CL Dec 22 (12m calendar) -1.41 (last price)

Now correct me if I am wrong but I always thought big number minus small number = positive number not a negative number lol

should be the calendar be +1.41 not -1.41.

Can anyone enlighten me on why this is?

cheers.

 

[maxinger]

CL dec 21 - CL dec 22 = +1.41


check your platform and see if it is

CL dec 21 - CL dec 22 or

- ( CL dec 21 - CL dec 22 )

 

[ShadowHunter]

definitely no minus sign there. I am expecting IB to come back to me and say 'thats just the way we do it at IB' lol.

 

[eastern_warrior]

The further out future is at a discount, if you buy the spread you are buying Dec 22 and selling Dec 21 - hence negative is correct. If in doubt, right click on the order to see the details of the combo.

 

[maxinger]

Different brokers/ trading platforms use different ways of computing spread.
it is a headache if we have many brokers and trading platforms.


some take near month minus far away month.

some take far away month minus near month.


definitely
CL dec 21 - CL dec 22 = +1.41 NOT -1.41

 

[ShadowHunter]

thanks chaps all the firms/brokers I have traded at in the past have a calendar as near month minus far month. I guess IB do it the other way around to be awkward sods. Somehow I knew this would come back to 'this is just how we do it at IB'.

I guess it is going to be the same with margining a fly with them 'thats just how we do it at IB'.