Hello guys, I’m new to the trading world and I wanted to know in this case what do you guys do, so let’s say a day-trader bought 3 Futures contracts, with different expiration date : the first one expires within 30 days, the second one expires within a week and the last one expires in 3 days,
So the trader is gonna use different trading strategies on each one of them or not ?

zak010 

Hello guys, I’m new to the trading world and I wanted to know in this case what do you guys do, so let’s say a day-trader bought 3 Futures contracts, with different expiration date : the first one expires within 30 days, the second one expires within a week and the last one expires in 3 days, So the trader is gonna use different trading strategies on each one of them or not ?

First at all, there can not be such a situation because of expiration, because Crude Oil contracts expire every month (most of the time around the 22th). Retail-traders normally trade the front-month (this is the contract with the most volume), but of course there are also strategies, where traders are spreading like buy May and sell June, but this is just to bring the risk down if you hold overnight or before news or similar situations

tr8er 

First at all, there can not be such a situation because of expiration, because Crude Oil contracts expire every month (most of the time around the 22th). Retail-traders normally trade the front-month (this is the contract with the most volume), but of course there are also strategies, where traders are spreading like buy May and sell June, but this is just to bring the risk down if you hold overnight or before news or similar situations

Thanks you some much for your respond, but I didn't know how to ask proporllay my question since my lack of knowlage but let me ask again so if a day-trader bought today a CLH23,CLJ23 and CLK23 he will use the same strategie to trade them, if so why?

zak010 

Thanks you some much for your respond, but I didn't know how to ask proporllay my question since my lack of knowlage but let me ask again so if a day-trader bought today a CLH23,CLJ23 and CLK23 he will use the same strategie to trade them, if so why?

Yes I understood your question, but I cannot see any logic in this strategy, I would buy 3 CLJ3 contracts instead, I've no idea why to buy CLH3 and CLK3, because they will move exact the same way. I'm a daytrader (no overnight position), but if you want to hold longer, maybe it is the better idea to buy i.e. the Dec contract, but as daytrader just the front-month makes sense. This is just my personal opinion, but I've no idea why you want to buy a contract which expires in 1, 2 days???

tr8er 

Yes I understood your question, but I cannot see any logic in this strategy, I would buy 3 CLJ3 contracts instead, I've no idea why to buy CLH3 and CLK3, because they will move exact the same way. I'm a daytrader (no overnight position), but if you want to hold longer, maybe it is the better idea to buy i.e. the Dec contract, but as daytrader just the front-month makes sense. This is just my personal opinion, but I've no idea why you want to buy a contract which expires in 1, 2 days???

Okay, I get it now but why would buy 3 CLJ3 and not CLK23? and thank you so much again

zak010 

Okay, I get it now but why would buy 3 CLJ3 and not CLK23? and thank you so much again

because CLJ3 is the front-month (the contract with the most volume)

As @tr8er said you'll generally want to trade the contract with the most volume. One reason you may want to trade a different contract is if you have an opinion on the time structure, and in that case you would probably trade a time spread, ie Buy April and Sell May. Then you would make money based upon how the spread moved and not based upon whether the market goes up or down. Crude has contracts going out 10 years, although past 18 months, the only contracts that trade are the Decembers. If you read much of this thread you might see that one of the things I trade are butterflies. So I might buy the Dec24-Dec25-Dec26 Butterfly. Meaning I buy 1 Dec24, sell 2 Dec25 and buy 1 Dec26. If I were to do this I make money if the Dec24-Dec25 spread outperforms the Dec25-Dec26 spread. But now I'm probably just confusing you!

does the Micro crude oil and E-mini crude oil futures track the full crude oil contract?
And The brokerage fees are the same for the 3 of them ? and what's the best crude oil contract to trade as a day trader ?

zak010 

does the Micro crude oil and E-mini crude oil futures track the full crude oil contract? And The brokerage fees are the same for the 3 of them ? and what's the best crude oil contract to trade as a day trader ?

Nearly all of the Micro's are completely fungible with the full size contracts. If you are long 10 MGC (or MES) and short 1 GC (or ES) you can instruct your broker to offset the positions. The big exception to this is Crude. CL is physical delivery and MCL is financial so they are NOT fungible, although from a risk standpoint you do get a full margin offset. So if you are long 10 MCL and short 1 CL, the MCL will expire/settle financially the day before CL expires, so unless you unwind your CL position at settle on penultimate you will have a position on the last day.

As far as I know most of the Mini's are also NOT fungible with the full size contracts, as most commodity Mini's are also financial settlement while the main contract is physical delivery.

Do Micro's track the full size contracts? Yes. Algorithmic traders will keep these in line, tick for tick. As explained most micro's are fully fungible, and even crude, the Micro contract settles based upon the full size.

Are the brokerage fees the same?No. The Micro's are cheaper per trade per contract, but since they are so much smaller, they are more expensive to trade over all. The worst case I know of is the Micro Ether. The Full size Ether contract (50 Ether) has an exchange fee of $4 while the Micro (0.1 Ether) costs $0.20. Sine the Full size is 500x times the size of the Micro, but only costs 20x times as much to trade, the Micro is 25x more expensive to trade! (500*.2/4). When you factor in broker/FCM fees I'm sure its even worse.

You can find all the CME exchange fees here. Remember the fee you pay is Exchange Fee + Broker Clearing Fee + NFA Fee (2c). This sheet only covers the Exchange Fee.

Hello everyone, i was searching for brokerage fees of WTI crude oil and i couldn't find it , could you help me please ?