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looking for spread traders
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looking for spread traders

  #51 (permalink)
Elite Member
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coffee

@KubaK

Did you do any coffee trades last year?

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  #52 (permalink)
Elite Member
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copper


KubaK View Post
Yesterday I bought one contract of HGN14-HGH14 (Copper july-march). This year's price has fallen down as it also did in 2011, 2006 and 1995. Those years started recovering with the beggining of january and so it seems this year might too. It is most similiar to year 2011. My entry was after the pattern 1-2-3 low and I don't want to see the price fall down below the low. If it did, I would trigger the exit button :-) Profit target is open but mainly I would like to exit at circa 2 or 2 days before FND, we'll see what will be quicker.

I had a quick look at your copper spread.
hope you don't mind me crunching some numbers.

the low was at 31 dec, -0,023 (x25000 big point value) = $-575
during july-oct it was pretty flat around +0,01722 (x25000) = $+414

not sure where you entered but let me guess, after the dip, so around $-400 (??)
so your risk is $175 (lets round it to $200) and your profit target is about $800
that is a nice ratio (1:4)

do you have any fundamental data, or more info on what caused the spread drop?
you mentioned 1995,2006 & 2011, i haven't looked at previous years yet but the only concern I have is what happened in those other years? But I guess that can be looked up.

Regards.

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  #53 (permalink)
Trading Apprentice
Prague, Czech Republic
 
Futures Experience: Intermediate
Platform: SeasonAlgo(.com)
Favorite Futures: futures spreads
 
Posts: 1 since Jan 2013
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Hey folks,

I am sorry for that "toho much of SeasonAlgo" post. I was wondering myself when I was submitting it if it wasn't too much :-D Apparently it was. Nevermind, it was caused by my enthusiasm about this great service.

As I wrote in that post, I don't have much time nowadays so I can't join the discussion properly. But as soon I'll have some free time I'll be here.

Just quickly: When analyzing that HG spread I picked up those specific years because those are ones which felt down the same way this year did. And they started recovering with the beggining of new year. So I speculate the same could happen this year. I entered at -1.4 with stoploss below the low and PT at 1.7+ (will see how quick it'll recover).

Successful trades!

Jakub

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  #54 (permalink)
Trading Apprentice
USA / Lithuania
 
Futures Experience: Advanced
Platform: CQG Trader, NinjaTrader, SierraChart
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Spreads synthetic/exchange

Hi, everyone! Can someone explain the difference to me between exchange spreads and synthetic? I know exchange spreads offer lower exchange-recognised margins, but, bloody hell, for the sake of me I cannot understand what a synthetic spread is. Is this basically a spread but with no special margins, i.e. a 'fake' spread?

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  #55 (permalink)
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MoscowOnHudson View Post
Hi, everyone! Can someone explain the difference to me between exchange spreads and synthetic? I know exchange spreads offer lower exchange-recognised margins, but, bloody hell, for the sake of me I cannot understand what a synthetic spread is. Is this basically a spread but with no special margins, i.e. a 'fake' spread?

Hi MoscowOnHudson,

From what i googled (and i agree, very little to find on synthetic spreads) I found that a synthetic spread is something like:

-1 x SPM11 ( Big S&P 500) against 5 x ESM11 ( E mini S&P 500)
-or YM vs. ES

So 2 very similar or supposed to be the same(very high correlated) instruments.
At least that makes the most sense to me.
And I suppose low margin can be offered since the risk of above is low.


The Barchart site has a ‘synthetic spread’ tab but it seem to me simple calander spreads. Link below simply mentions various Corn spreads and the same results are shown under synthetic spreads and future spreads.
Barchart.com - Futures | Spread Quotes | Corn (P)


But from further reading I also get the feeling that the term was never clearly stated and now is used for various more exotic spreading techniques like different/multiple markets and variable ratios.
Eg. here is a BM thread where a synthetic product is discussed (in my opinion a normal spread)
https://futures.io/commodities-futures-trading/29337-synthetic-commodities-market.html

For a definition of Synthetic Futures Contract (not spreads) see:
Synthetic Futures Contract Definition | Investopedia
What is Synthetic Futures Contract? definition and meaning

hopes this helps.

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  #56 (permalink)
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Georgia, US
 
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MoscowOnHudson View Post
Hi, everyone! Can someone explain the difference to me between exchange spreads and synthetic? I know exchange spreads offer lower exchange-recognised margins, but, bloody hell, for the sake of me I cannot understand what a synthetic spread is. Is this basically a spread but with no special margins, i.e. a 'fake' spread?

From your perspective, the customer/trader, an exchange-traded spread involves a single transaction with one product. The CME has defined, for example, an exchange-traded NOB spread. This means that if you want to trade the NOB and you have access to these quotes, then you open up your software, look up a single symbol, and buy and it and sell it like it's any other futures contract. Intrinsic to the exchange-traded spread will be the ratio of the underlying products which are being spread. CME used to have spread quotes on their web site but now charge separately for them.

Synthetic basically means "artificial" or "not natural." Without the use of an exchange-traded spread, if you want to trade a spread such as a NOB, then you have to, on your own, without an exchange-listed single symbol, buy and sell the correct combination of individual products to achieve the spread you want to trade. So instead of buying 1 exchange-listed NOB, you would have to buy 2 ZN and sell 1 ZB. Some trading software can automate the process so that you define your own spread, and trade it just as if it were an exchange spread; but it will still usually incur two separate transactions. If you had a spread with three legs, like the crack, then a synthetic spread will involve 3 transactions, etc, and hence an exchange-traded spread in this case becomes even more attractive.

You can create any synthetic instrument by combining anything you want. For example, you can create a spread and call it "GOOGSOFT" ... buy 1 GOOG and sell 30 MSFT, for a relatively dollar-neutral approach anyway. A synthetic spread is just a way for you to create a spread on your own, if there is no exchange spread available for what you're trying to accomplish.

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  #57 (permalink)
Market Wizard
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MeanBean View Post
Where to learn to spread trade? Can anybody recommend resources to learn spread trading? Not looking for "guru" but simple resource that explains the mechanics. thanks.

I saw A Guide to Spread Trading Futures (ebook) by Rajen Kapadia discussed on this forum somewhere. It's an ebook available several places (eg Amazon) for about $3! If you really know very little (or nothing) about futures spreads, futures butterflied then this will get you started. It explains poisitioning sizing, spread ratio's etc etc. The writer obviously uses TTs XTrader as many of the screen shots are from that software. It's not going to make you a spread trading expert but for $3 it's decent value.

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  #58 (permalink)
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SMCJB View Post
I saw A Guide to Spread Trading Futures (ebook) by Rajen Kapadia discussed on this forum somewhere. It's an ebook available several places (eg Amazon) for about $3! If you really know very little (or nothing) about futures spreads, futures butterflied then this will get you started. It explains poisitioning sizing, spread ratio's etc etc. The writer obviously uses TTs XTrader as many of the screen shots are from that software. It's not going to make you a spread trading expert but for $3 it's decent value.

Thanks SMCJB looks interesting, I like books that are done by traders.
Interesting to see those low cost ebooks/pdf’s pop up more and more.

i found a short youtube book promotion movie done by the author, for those who want more info.
Ebook Overview: A guide to spread trading futures - YouTube

the price i see from amazon is $6.39 but perhaps because I’m in Europe (?)
There is another link next to the video where you can buy the pdf for $4,29
https://payhip.com/b/bNTE

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  #59 (permalink)
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Here the Andy Jordan/Joe Ross free email i got today with a spread trade setup.
So instead of the normal seasonals he now goes for a (spread) swing trade.
In my personal oppinion a lot of "if's" and "maybe's" but interesting to see how this works out.


Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

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  #60 (permalink)
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hi,

anybody know this book?
i read somewhere its (partly) about spread trading

What I Learned Losing a Million Dollars
by Jim Paul


What I Learned Losing a Million Dollars (Columbia Business School Publishing): Jim Paul, Brendan Moynihan, Jack Schwager: 9780231164689: Amazon.com: Books

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