Crude Oil (CL Large Contract) Spread Trading

[futuretrader]

experimenting with Crude Oil Spread trading...got a demo trade on:

Long Feb10/March10 spread

Short Jan10/Feb10 spread

probably will only begin trading one outright...or noticed you could "spread the spreads"...like I am doing via demo trading...

[moneymaker]

Can you offer some reasoning for those positions? All your positions seem rather random. It seems to me that you jump from strategy to strategy (YM-ES spreads, ags, etc) but seem a little lost, and you're putting on spreads for the sake of spreading. What will you conclude if the spread makes money? That going long a spread is profitable? Either that or you're just looking for attention

[sprofiter]

Can you offer some reasoning for those positions? All your positions seem rather random. It seems to me that you jump from strategy to strategy (YM-ES spreads, ags, etc) but seem a little lost, and you're putting on spreads for the sake of spreading. What will you conclude if the spread makes money? That going long a spread is profitable? Either that or you're just looking for attention

[futuretrader]

Originally Posted by moneymaker

Can you offer some reasoning for those positions? All your positions seem rather random. It seems to me that you jump from strategy to strategy (YM-ES spreads, ags, etc) but seem a little lost, and you're putting on spreads for the sake of spreading. What will you conclude if the spread makes money? That going long a spread is profitable? Either that or you're just looking for attention

it is simply an honest learning process...I always believe the best way to learn is to "simply see the trade"...for right now, that means "Seeing it via demo platform"...yea, totally serious here...for me and my schedule, spread trading seems to offer what I need most:

1-less time at the computer terminal needed to actually trade
2-minimized risk
3-profit potential

...really aftert the ability to place only 1 to 5 trades per week to meet my trading $$$ goals...what is your take on spread trading?...ever placed a real spread trade?

[moneymaker]

Originally Posted by futuretrader

it is simply an honest learning process...I always believe the best way to learn is to "simply see the trade"...for right now, that means "Seeing it via demo platform"...yea, totally serious here...for me and my schedule, spread trading seems to offer what I need most:

1-less time at the computer terminal needed to actually trade
2-minimized risk
3-profit potential

...really aftert the ability to place only 1 to 5 trades per week to meet my trading $$$ goals...what is your take on spread trading?...ever placed a real spread trade?

I just don't understand on WHY you placed that particular trade or the YM-ES one in the other thread, not the benefits of spread trading. It seems to me that it is a random entry and not based on any type of statistical analysis or anything along those lines. If you are serious, I think you will NOT benefit by putting on random demo trades and looking at outcomes, as you won't be able to draw any conclusions from those outcomes.

Since you asked, I don't trade spreads as you describe them, I do trade option spreads though.

[johnab]

You need to think about the position that you have on. In that trade you are basically trading the front outright. Sure this isn't going to move as much but yesterday the FG Cl was up and down 40 ticks while the second spread was up and down 20. There is also a situations with the roll and the contango.

[futuretrader]

Originally Posted by johnab

You need to think about the position that you have on. In that trade you are basically trading the front outright. Sure this isn't going to move as much but yesterday the FG Cl was up and down 40 ticks while the second spread was up and down 20. There is also a situations with the roll and the contango.

exactly...that is why I am learning here via demo...have you traded CL spreads before?...please share any insight...thanks,,,

[futuretrader]

one of the things I like about trading spread futures is that it is kinda like a "mini CL contract" in that you got the per tick value/tight spread but it is not gonna hit you with the huge loss like the CL normal contract might...

[moneymaker]

The liquidity of CL options is pretty crappy. I have used spreads and found them tough to unwind efficiently. Spread trading seems like it would have been great 5 weeks ago as vol was declining but I doubt vol will continue to stay as low as it has. I'm no expert when but the sensitivity to theta and imp volatility seems much greater compared to the ES. To me spread trading the CL doesn't seem like it's worth the risk, so many factors have to have to work in your favor it seems like it's just easier to trade what you see. It is great to learn many different strategies but sometimes I think it's a marketing scam by brokers to generate higher commissions by enticing us to learning elaborate option strategies. For me buy, sell and stop is hard enough

[futuretrader]

Originally Posted by moneymaker

The liquidity of CL options is pretty crappy. I have used spreads and found them tough to unwind efficiently. Spread trading seems like it would have been great 5 weeks ago as vol was declining but I doubt vol will continue to stay as low as it has. I'm no expert when but the sensitivity to theta and imp volatility seems much greater compared to the ES. To me spread trading the CL doesn't seem like it's worth the risk, so many factors have to have to work in your favor it seems like it's just easier to trade what you see. It is great to learn many different strategies but sometimes I think it's a marketing scam by brokers to generate higher commissions by enticing us to learning elaborate option strategies. For me buy, sell and stop is hard enough

I've been talking about Futures spread trading and not futures options spread trading at all...nothing to do with futures options here