jokertrader 

spread(CLES12Z7-CLES12Z8-CLES12Z8+CLES12Z9) chart

Dropped to -40, lower end of the last 6 month range while z890-z901 at -7 is at the higher end of the last 5 month range.

This is 16 contracts round trip so thats almost 40 bucks for me.. will think seriously about it..
what will cause this to go down more or go up?
Just want to see how you would analyse this to enter or exit
any thoughts?

jokertrader 

This is 16 contracts round trip so thats almost 40 bucks for me.. will think seriously about it..

Considerably lower for me, but still expensive, and not really viable. Single rolls are only 8 legs though and 789vs890 has had over a 60c range in the last 6-7 weeks, and a $1.20 range over the last 6 months. 890vs901 only about half that though.

jokertrader 

what will cause this to go down more or go up? Just want to see how you would analyse this to enter or exit any thoughts?

For me I'm short 901 from several months back and long other flys against it, so rolling flys back and forward as they reach the edge of the ranges just optimizes my hedges.

It's definitely not big $ but this is one of those trades for me, that if I can make $Z a day on it, 250 days a year thats 250Z a year. If I then have say 4 strategies like that, that becomes 1000Z a year. Obviously $Z doesnt have to be that big before that starts adding up.

now this reminds me of options
apologize for such a novice question

Ok you are short the 901 fly.. fine

1) Can you give an example of
"so rolling flys back and forward as they reach the edge of the ranges just optimizes my hedges"

2) Same example can u tell how you made money as an example
"I can make $Z a day on it"

why does this remind me of an option adjustment? if i am reading this right.. i have a core position.. then add flys to hedge.. when prices are low.. maybe take out the call.. leaving a short put.. when price goes back up.. take off the put.. etc
Not sure if im thinking correctly.. thus an example would help

thanks much

jokertrader 

1) Can you give an example of "so rolling flys back and forward as they reach the edge of the ranges just optimizes my hedges"

Imagine your long z890 vs short z901. (In this case I truely believe z901 was the fly out of whack, but I really don't care because its all relative values).

On 23rd March, the z789/z890 roll drops to -66c so lets assume you move some of your z890 length to z789.

Then on 10th April, the z789/z890 roll rebounds to -1c so you move your z789 length back into z890.

You have the same position on but by optimizing your hedges you've added 65c ($650) in profit.

(Obviously for illustration purposes I picked the extreme high and low, I'm not claiming to have captured the prices illustrated.)

jokertrader 

2) Same example can u tell how you made money as an example "I can make $Z a day on it"

In the example above you made $650 over 12 days = 54/day per lot and this is just optimizing your hedges.
Your core position - the z890/z901 spread - has also been moving your way the entire month.

jokertrader 

why does this remind me of an option adjustment? if i am reading this right.. i have a core position.. then add flys to hedge.. when prices are low.. maybe take out the call.. leaving a short put.. when price goes back up.. take off the put.. etc Not sure if im thinking correctly.. thus an example would help

Think of portfolio optimization rather than managing individual trades. My goal is to continually be buying things that I think, well that my models say are under valued and selling things over valued. Today that might be A & B, tomorrow it might be B & C, and the next day A & D leaving me with say C & D. As long as I can keep doing that, and avoid over concentration in any one position, in the long run it adds up nicely (assuming my models are right).

Interesting EiA piece discussing the efficiency of the US car fleet, and how vehicle classification hides potential fuel efficiencies.

Fuel economy improvements projected to reduce future gasoline use despite recent changes in vehicle sales mix
https://www.eia.gov/petroleum/weekly/archive/2017/170510/includes/analysis_print.php

I've also wondered how the move to autonomous driving will effect consumption. Anybody with an instantaneous mpg reading in their car will know had radically different mpg rates are accelerating vs cruising. With a computer in control rather than a heavy footed human will there be a significant fuel efficiency impact? Of course that's many years away.

SMCJB 

I've also wondered how the move to autonomous driving will effect consumption. Anybody with an instantaneous mpg reading in their car will know had radically different mpg rates are accelerating vs cruising. With a computer in control rather than a heavy footed human will there be a significant fuel efficiency impact? Of course that's many years away.

I suppose it also depends how much more people use self-driving cars. To add some musings:

In cities - if people stop owning cars and taking a taxi/uber becomes a lot cheaper due to them being self-driving then will more people use these vehicles rather than public transport?

What about if driving a semi-long distance becomes a much more enjoyable experience? For example if on a 4 hour drive you can relax and watch a movie in reclined seats, sit around a table and play cards/games and just generally travel in a new relaxed, safe way, then perhaps people will choose to drive over taking a coach/train/plane for certain journeys?

In addition to this, perhaps larger cars will be preferable outside of cities as people want comfort for their journeys and this will lead to higher fuel use despite better fuel efficiency.

Excellent points @CobblersAwls

CobblersAwls 

I suppose it also depends how much more people use self-driving cars. To add some musings: In cities - if people stop owning cars and taking a taxi/uber becomes a lot cheaper due to them being self-driving then will more people use these vehicles rather than public transport? What about if driving a semi-long distance becomes a much more enjoyable experience? For example if on a 4 hour drive you can relax and watch a movie in reclined seats, sit around a table and play cards/games and just generally travel in a new relaxed, safe way, then perhaps people will choose to drive over taking a coach/train/plane for certain journeys? In addition to this, perhaps larger cars will be preferable outside of cities as people want comfort for their journeys and this will lead to higher fuel use despite better fuel efficiency.

Excellent points, thank you

However I must say, being a HOG enthusiast, I cringe at the though of self driving cars.

On the other hand with the jack asses on the road today (vs seven or so years ago) it may be an improvement

Ride safe

-William

CL vs NG :

Outrights: (U17) 2888 vs 1925

3 month calendar (U17/Z17): 308 for Cl vs 495 for NG

3 month fly: (U17/Z17/H18): 154 for Cl vs 935 for NG

$935 for a NG 3 month fly??? why so much compared to CL... i know NG 3 month is prob more volatile than Cl but SOO much more?? why?

Is it i picked the wrong months since NG in winter can move either way?

********* i dont think so *********

3 month fly in summer: March/June/Sept 18

NG: 635
vs
CL: 89 (really 89..... wow)

Of course this could increase as we get closer