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One of my favourite spreads
One of the spreads which I always follow with great interest and that provides good trading opportunities every year is CL-B, that is, WTI crude oil – Brent crude. Crude oil is one of the most highly traded
Hello David, thanks a lot for your nice suggestion. I haven´t understood anyway the following point: “So, I do not find it useful, for example, to compare the current spread with previous spreads” Why? Is it not what are you doing anyway? Thanks.
Hi Gherardo,
yes partly I did but first I went to check the situation in the past (but only for 2018) when the futures were around the current prices. I mean I don’t find it useful to simply compare the current chart with past charts as I do in normal analysis. If I did so I wouldn’t open any trades and the spread would be judged to be at a normal price (which it is not). A new detail comes into play here: knowing the past prices of individual futures when we make the comparison. This is because the higher the price of the futures the greater the spread can be. A spread of -$9 is quite normal with WTI at $90, but it’s impossible (or at least it would be a big anomaly) if WTI is at $20. So if you don’t know the price of the two futures in each of the past years, it’s useless to compare the charts because what you get is worthless because an important benchmark is missing. I hope I have been clear in my explanation.
Have a nice day!
David
Dear David, thanks a lot for your nice explanation. I got the point. Let’s see what happens.. 🙂
Have a nice day. Bye.