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Last week, I opened ZMN19-ZON19 for 175. Previous history shows 8/10 years have been profitable. Will aim to close on 01-May or earlier if profit targets are met.
Can you help answer these questions from other members on NexusFi?
Some remarks:
There are plenty of soybeans around this year. In case the China deal is moved further down the road, prices of soymeal might move south.
Some planting area might move from corn to beans which also is bearish for the soy complex.
There is an important USDA report this Friday. The March report is known for the potential of big moves.
The size of the contracts is different. I suggest to check if 1:1 is appropriate.
Another interesting Seasonal Trade that I found in the reports of MRCI:
Buy OJH - OJK, and hold the spread from early January until late February.
The trade was profitable in the most recent 14 years. The average profit was significantly larger than the maximum loss.
The spread has followed its seasonal chart quite nicely in reent months. It has come down to the lowest value for this time of the year since the early seventies (I do not have older data.)
The important thing about trading with MRCI is to check each trade for yourself. Just following every trade they suggest will give you many loosing trades.
In this thread you will find some criteria how to check their suggestions. In case of further questions, please do not hesitate to ask.
Indeed that’s what I do. Since I don’t have ICE I’m trading CME only. Then among those futures, I study beforehand the probabilities of drawdown, risk and reward and how the spread has been trading.
The non-spread trades (only one contract) I chose a few and usually place a trade with futures options vertical spread.
Did the chart follow the seasonal chart in recent months ? If not, forget the seasonal trade.
Does the COT data cooperate ? If not, forget the seasonal trade.
Has the future already run very far ? is it near its all time highs ? Forget ...
Does the seasonal trade work in most of the years ? Perfect.
Are the maximum losses in recent years smaller than thte average profit ? Good trade ...
You will take only a small part of the suggestions of MRCI, but they will work at a high percentage.
How often does it happen approximately to you (10-20%? ) that one leg of a seasonal trade can be dropped to have a better profit from the other leg from a pure futures perspectives? Just curious.
Another question related to that. Sometimes some brokers are proposing directly a combined trade (one example at Saxo CL0-Q0 (in one go buy CL April contract and sell CL August contract): is it possible to close at one point of time one leg and keep running the second leg?
Obviously at the end of the contract for the first leg, the other leg will remain opened but my question is for a voluntary closure.
I know one wouldn't know the answer for my broker but what is the answer for your broker if it is possible?
Thanks
I usually liquidate both legs of a future spread simultaniously. I do not remember any recent trade where I dropped only one leg.
My brokers allow for dropping only one leg. But the margin would rise significantly. More important, risk would rise significantly.
In case I find out that an outright position is better suited than the spread position I am holding, I would close the spread position, and consider the new outright position as a new trade (regarding size of the position, risk, target etc.)
For me, the trade is a spread from beginning to end. I analyze it as a spread (the seasonal chart and behavior) so it doesn’t matter if one of the contracts moves up or down because the difference between them is what I'm watching.
Entering the trade as a spread contract gives you the advantage of a much reduced margin. (if your broker offers it)
In my case, NGH0-NGF0 spread has around $500.00 margin compared to $2500.00 for each natural gas contract if entered individually.
