Commodity Spread Trading – Take Advantage of the Seasonality

What makes commodity spread trading so different from other forms of trading?

Remember Trading Places, the classic Christmas comedy starring Dan Aykroyd and Eddie Murphy? The pork bellies trade, the orange juice crop report and the unforgettable revenge on the Duke brothers. Behind the comedy lies a fascinating reality: commodities are traded every day, and their prices are influenced by forces that many traders overlook.

Wheat, coffee, orange juice and countless other commodities follow recurring patterns shaped by supply and demand, weather, production cycles and seasonality. Understanding these relationships opens the door to an area of financial markets where opportunities extend far beyond simply predicting whether prices will rise or fall.

Commodity Spread Trading – Take Advantage of the Seasonality is the first volume in the Commodity Spread Trading series. Drawing on more than 30 years of financial market experience, including his work as a fund manager, David Carli introduces you to the essential concepts, characteristics and analytical tools of commodity spread trading.

You will discover how to:

• Learn what commodity spreads are and why trading price relationships can be an advantage.
• Recognise seasonal tendencies and understand their underlying causes.
• Explore analytical tools such as Moore Research, SeasonAlgo and SpreadCharts.
• Interpret fundamental reports, term structures, contango and backwardation.
• Understand First Notice Day, Last Trading Day and the importance of Crop Year.
• Explore multi-leg and intermarket spreads, subjective probability and Value-at-Risk.

Throughout the book, you will discover how the commodity markets work, why seasonal relationships develop and which factors deserve attention before considering a trade.

Whether you are approaching commodities for the first time or looking to broaden your financial knowledge, this volume provides the foundations needed to understand the world of commodity spread trading.

First understand the markets, their seasonal behaviour and the tools used to analyse them. The practical trading method is developed in the second volume of the series.

Read the first 4 chapters for free